9911796707
TMI Blog2007 (6) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to blasting followed by fresh water washing etc. of Rig known as Pride Pennsylvania by virtue of two work orders dated 6-12-2003 and an agreement dated 1-1-2004. 3. By virtue of the first work order the petitioner was assigned an area of 11,055 sq. meters at an estimated cost of Rs. 41,45,625 and by the second work order an area of 15090 sq. meters estimated at Rs. 45,27,000. The date of completion of work was stipulated as 28-2-2004 but the petitioner s work was completed on 19-4-2004 and the petitioner raised the bill dated 20-4-2004. Admittedly, the petitioner completed the work to the extent of only 12,158 sq. meters as against allotted work of 26,145 sq. meters and the balance work was got done by the respondent through M/s. Palongi and Company and regarding which the petitioner has raised no dispute and this prima facie shows that all was not well with the work being carried out by the petitioner pursuant to the said two work orders and the agreement. 4. The petitioner called upon the respondent by notice dated 7-6-2005 to pay the said amount of Rs. 41,48,696.95 and thereafter it appears that there were meetings between the representatives of both the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in P. G. Bhatia Co. v. Softsule (P.) Ltd. [1977] 47 Comp. Cas. 438 (Mum.) and of the Supreme Court in Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 wherein it has been held that if a debt is bona fide disputed there cannot be "neglect to pay" within the meaning of section 434(1)( a ) of the Companies Act, 1956 and if there is no neglect, the deeming provision does not come into play, and the ground of winding-up, namely, that the company is unable to pay its debt, is not substantiated. 6. As per the respondent, the bill as per Work Completion Certificate dated 19-4-2004 has been paid to the petitioner after carrying out verification and damages as stipulated in the terms of the agreement and the work purchase orders. As per the respondent, they are entitled to a sum of Rs. 10,58,696.95 which they have deducted from the outstanding bills for damages for breach of the agreement, for workmanship and delay in completing the job and that they had by letter dated 12-3-2004 warned the petitioner of the said damages for failure to complete the quartz blasting and painting within the stipulated time. The respondent has also de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , default, delay, damages or penalties whatsoever. It is not the case of the petitioner, at least in the petition, that they had not used any excess or unjustified consumables or for that matter they had submitted a certificate as required by clause 3 of the agreement. On behalf of the petitioner, it is contended that no reference was made on Work Completion Certificate of the excess consumables used by the petitioner. Similarly, it is contended that consumption of consumables in excess is not reflected in letter dated 4-12-2004. It is further contended that it was for the respondent to prove that the petitioner had used consumables in excess for which the petitioner was bound to pay and therefore it cannot be said that the deduction is bona fide . The contentions cannot be accepted. The fact that respondent made no mention in this letter about the consumables used by the petitioner is no indication that no consumables were used by the petitioner either of standard quantities or in excess for which it is the petitioner who was required to give a Certificate. In any event, it must be stated that this dispute would require a detailed investigation to be done and therefore cannot bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded without final blast inspection clearance either from them or from Pride International and that no stripe coating of all edges and welds and corroded surface profiles was carried out prior to the spray coat. It was also stated that the resulting paint application was poor, with many of the difficult to access areas still showing corrosion through either newly applied paint or no paint in these areas (holidays). It also mentioned that great efforts were needed to ensure the contractor lifts his game before they could release more tank work to this contractor and that reasonable results could be achieved if the right combination of skill, dedication and equipment are in place. In other words, this letter prima facie shows that the work carried out by the petitioner was not at all satisfactory. By another letter dated 6-2-2004, the respondent was informed on behalf of Pride Pennsylvania that the contractor was not strong and was struggling to complete the work which was also the observation of the supervisors of the respondent and that the petitioner was holding up the progress of all subsequent work on the port aft side and the petitioner needed to be replaced if they were to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent as well as the owners of Pride Pennsylvania as regards delay and unsatisfactory completion of work for which the respondent has deducted the said sum of Rs. 10,58,696. Prima facie, they would be justified in doing so as demonstrated by them by the correspondence produced. In any event, it must be stated that the petitioner s bill as per completion certificate was not accepted by the respondent at any time and even prior to the first notice dated 7-6-2005 the respondent by his letter dated 4-12-2004 had clearly indicated to the petitioner that the respondent did not owe them any money than what was paid to them and as already stated the notice dated 7-6-2005 came to be sent only thereafter and presumably to pressurize the respondent to pay to the petitioner the amount claimed, part of which has not been pressed for. Whether the petitioner would be entitled to the said two sums of money could be decided only if detailed investigations are made which cannot be done in this summary proceedings. The respondent s claim for deductions of the said two sums against the bill presented by the petitioner appears to be prima facie bona fide. In ITC Ltd. v. Fomento Resorts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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