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TMI Blog2012 (8) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT Kalyan Jyoti Sengupta, J. In this appeal the order of the learned company judge dated February 26, 2010, is questioned. The learned trial judge by impugned judgment and order has permanently stayed the said winding up application and the appellant has been given liberty to establish the claim in appropriate proceedings. 2. The facts are summarised hereunder on which the winding up of the company was prayed for. 3. Pursuant to purchase orders placed by the respondent herein namely the above company, during the period on and from May 24, 2008, till February 5, 2009, the appellant-petitioning creditor agreed to manufacture, sell and supply and did supply substantial quantity of Heat Resistant Cast Iron Castings (hereinafter in short "HRCI") for construction, erection and installation of Rotary Hearth Furnace. The aforesaid agreement for purchase and sale and supply of the said materials were embodied in the number of the purchase orders themselves. The relevant terms and conditions for sale and supply are as follows : ( i ) The said materials must conform to the stipulated percentage of metallic composition namely copper and chromium, ( ii ) Cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the representatives of the said company and on furnishing of test certificates at their instance in between May 24, 2008 to March 16, 2009, the same was received and thereafter at their instance the same were sent to the factory site of ISMT Company and after delivery of the said good the petitioning-creditor/appellant duly raised bills and the same were received and substantial payment was made leaving balance sum of Rs. 26,13,870 after adjusting the advance payment. After delivery of the said goods in or about March 6, 2009, the company intimated by an e-mail to the petitioning-creditor that some of the casting materials were not conforming to the standard as per as the metallic composition are concerned and the said customer ISMT on test being carried out in the independent laboratory rejected part of the goods. It appears from the records that the appellant-petitioning creditor accepted such rejection but agreed to replace the same if same are returned in terms of the guarantee clause. The goods were not returned and it is lying at the factory site of the ISMT. 6. Now it is the contention of the petitioning-creditor/appellant that on account of rejection of their customer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd their failure is sought to be imputed to the petitioning-creditor. 12. Mr. Gupta, learned counsel appearing for the respondent contends that the learned trial judge is perfectly justified in passing order impugned which does not call for any interference. It will appear from the records that the goods were not of standard quality of stipulation as it was found by the independent expert after delivery was effected. It is true at the time of delivery of the materials his client relied bona fide on the test certificate furnished by the petitioning-creditor. The company did not doubt bona fide as to quality and the acceptance was made based on visual inspection of the size of the materials. Truth revealed only when the said materials were tested by their customer company at Pune in fact the substandard quality of material has been accepted by the petitioning-creditor. Hence the company-appellant in order to maintain its reputation and to retain its customer had to purchase hurriedly for the commissioning of the furnace which was time bound otherwise his client should have faced serious loss and damages. Indeed by this time the company had incurred expenses of more than Rs. 30 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the condition and stipulation contained in the general purchase orders make the thing clear that once it is found inferior quality and further does not conform to the specification goods must be returned and chance should be given to replace within reasonable time and in case of failure thereafter the purchase from outside is permissible. 17. In this case admittedly we notice that after rejection of inferior quality there was no demand for replacement of the same by return. On the contrary the company without returning the goods and waiting for a reasonable time for replacement has hurriedly purchased the same and is said to have incurred expenses of Rs. 30 lakhs and odd. The company is not disputing payability of the balance amount of Rs. 24 lakhs and odd to the appellant. 18. In these circumstances whether the dispute of this nature can be said to be bona fide to resist winding up petition. We are of the considered opinion that the relationship between the company and its customer has nothing to do with the petitioning-creditor once it is accepted upon compliance of the terms and conditions. Of course, the petitioning-creditor cannot be relieved of the liability arising ..... X X X X Extracts X X X X X X X X Extracts X X X X
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