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TMI Blog2016 (4) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, the respondent company had placed the Purchase Order with regard to CT and had been supplied the material worth ₹ 3,20,64,210/-, but owing to the non-supply of CP, the company had purchased the material from other source at a higher price, for which the civil suit is pending and the same shall be proved in those proceedings and the petitioner company shall have a right to rebut the same. In view, at this stage, the petitioner company cannot be permitted to continue, much less seek winding up order of admission. - Company Petition No.25 of 2012 (O&M) - - - Dated:- 18-3-2016 - MR. AMIT RAWAL, JUDGE, J. For The Petitioner : Mr.Anand Chhibbar, Senior Advocate with Mr.Lalit Thakur, Advocate, Mr.Gaurav Mankotia, Advocate and Mr.Vaibhav Sahni, Advocate For The Respondent : Mr.Atul V. Sood, Advocate AMIT RAWAL, J. The Rules for maintaining a winding up petition are well settled as per the ratio decidendi culled out by the Hon'ble Supreme Court in Madhusudan Gordhandas and Co. Versus Madhu Woolen Industries Private Ltd., AIR 1971 (SC) 2600. In the said judgment, it has been held that where a debt is bonafidely disputed and defence is substantial one, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent company suffered a loss to the tune of ₹ 3.30 crores due to nonsupply of the aforementioned product and the company had to arrange the same material from a different source at a much higher rate and, therefore, the aforementioned amount has been set-off/adjusted/forfeited. It has further been stated that since the aforementioned liability has been admitted by seeking forfeiture/setting-off, the present case squarely falls within the parameters of Section 434 of the Companies Act, 1956 (for short 1956 Act ). There was no concluded contract between the petitioner company and the respondent company for supply of CP product. It has been stated that prior to sending of the legal notice, respondent company had sent a legal notice dated 28.9.2010 (Annexure P-14) stating therein that it has faced the loss to the tune of ₹ 10.00 crores on account of non-supply of CP product. The said legal notice was replied vide letter dated 22.10.2010 (Annexure P- 17) denying the existence of any binding contract between the parties, much less the liability. It has been further stated that the petitioner company had duly informed the respondent company vide e-mail dated 11.8.2010 (Annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . For the sake of brevity, Para 16 of the legal notice (Annexure P-13) reads thus:- 16. That in the circumstances, my clients have adjusted/forfeited the sum of ₹ 3,20,64,210/- and the same is not payable to you. On the contrary, my clients have suffered a direct loss of ₹ 3,30,00,000/- on account of the difference in price of material not supplied by your clients despite various reminders by my clients and assurances by your clients'. Therefore, my clients dispute and deny the claims raised in the notice under reply. He further submits that in pursuance to the order dated 24.2.2012 of this Court, the petitioner company was directed to file a specific affidavit as to whether the Purchase Order dated 17.8.2010 for supply of CP @ ₹ 12,250/- per Kg. was ever received from the respondent company and if yes, what was the reply sent and in compliance of the aforementioned order, an affidavit dated 21.3.2012 (at page 172 of the paper book) has been filed, wherein it has been stated that various e-mails dated 26.7.2010, 27.7.2010, 29.7.2010, 2.8.2010 and 10.8.2010 were exchanged between the petitioner company and the respondent company for supply of CP, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delivery: As per schedule Cefpodoxime-3000 Kgs Basic Rate @ ₹ 12750/- Kg+ED 10.30%+CST 2% against form Rs. C' Delivery: As per schedule Payment: 60 days The order to be put in the name of M/s. Hetero Drugs Ltd., Vizag Officer valid till 7 days Please confirm Regards Chetan Gulati From: Renuka [email protected]. To: Chetan Gulati [email protected] ; Aarti Chauhan [email protected] ; Sandeep Chawan [email protected] Cc: Amit Ujagare [email protected] Sent: Tuesday, July 27, 2010 7:06 PM Subject: Re: inquiry Dear Mr.Chetan, As per my discussion with Mr.Sandeep, please note that it won't be possible for us to offer less than given quote. Pls.confirm Regards, Renuka Bhintade Hetero Drugs Ltd. 3) Vide e-mail dated 30.7.2010, the petitioner company had offered CP @ ₹ 9700/- per Kg. Cefpodoxime @ ₹ 12,500/- per Kg. The e-mail reads thus:- Chetan Gulati From: Renuka [email protected]. To: Chetan Gulati [email protected] ; Aarti Chauhan aart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . MINIMUM ASSAY SHOULD NOT BE LESS THAN OUR IN HOUSE SPECS. 4. ALL MATERIAL IS REQUIRED IN MICRONISED 6000 KGS PAYMENT TERMS CONDITIONS: Price Basis : FOR Our Works Packing Forwarding : Nil Insurance : To be arrange by you Excise : @ 10.30% Extra Sales Tax : @ 2% Extra against form C Delivery : Before 30.9.2010 Payment Terms : 60 Days Credit PRICE ESCALATION The price mentioned in the order is fixed and firm for all the purposes and no escalation whatsoever will be allowed till the execution of this order. JURISDICTION It may be noted that any disputes arising out of this order shall fall under the jurisdiction of Chandigarh judicial courts. You are requested to dispatch the material a the earliest at our plant as following address: M/S NECTAR LIFESCIENCES LTD., UNIT-II VILLAGE SAIDPURA, BARWALA ROAD DERABASSI, DISTT.MOHALI (PUNJAB) Billing must be done at above-mentioned address, our excise details is as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate maximum quantity as possible. Regards, Renuka He further submits that the aforementioned correspondences leave no manner of doubt of concluded contract and since the petitioner company did not supply the agreed material, the respondent company suffered losses and for that, it had purchased the material from other source at a higher price and for that, a civil suit claiming recovery/damages of ₹ 3.30 crores has been filed by forfeiting the amount of ₹ 3.30 crores and, therefore, the liability is disputed and cannot be adjudicated in a summary manner. He further submits that as per the reply dated 22.10.2010 submitted in response to the legal notice dated 28.9.2010, the petitioner company, for the first time, raised the dispute of not conveying its acceptance. In fact, they volte-faced from the previous stand as noticed above and in this regard, he has drawn the attention of this Court to the contents of the reply dated 22.10.2010 and urges this Court for dismissal of the petition. In support of his contentions, he has relied upon the following judgments to contend that in a winding up petition, set-off is permissible, in essence, it is permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to come to a conclusion that the summary proceedings under section 433 be initiated to admit the petition for winding up. Paras 9 and 13 of Judgment No.2: 9. As noted hereinbefore, as far back as 22.4.2015, i.e., almost one year before the filing of this winding up petition, the respondent has raised a serious issue on the alleged failure of the petitioner to secure visa for its Managing Director. The petitioner has not even responded to the said letter for more than four months before it has denied any failure or liability on its part. Be that as it may, as the respondent has raised the dispute much before the contemplation of the Company Petition, it cannot be said that the denial of debt by it is not bona fide and the same is intended to evade the legally payable debt. 13. Following the legal position which emerged from the above-mentioned judgments, I am of the opinion that the claim for set-off or adjustment is made by the respondent towards the alleged damages against the amount payable by it, for the limited purpose of adjudicating the winding up petition, this Court cannot treat such a claim for set-off or adjustment as lacking bonafides whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent company is bonafide and not malafide. The reproduction of the e-mails, ibid, leaves no manner of doubt that the respondent company had placed the Purchase Order vis-a-vis CP 6 MT at the rate of ₹ 12,250/-, Kg. whereas the petitioner company had offered the rate at the rate of ₹ 12,750/- and ultimately agreed for ₹ 12,250/- Kg., but the schedule of payment was deferred month-wise owing to the shortage of BF3 gas, in essence, they have agreed to supply 1 MT spanning over six months. The affidavit filed in pursuance to the order of this Court in view of the correspondences is not correct and rather the aforementioned correspondences leave this Court to an irresistible conclusion that there was a concluded contract for supply of CP. There is no dispute that prior to the placing of the Purchase Order dated 18.8.2010, the respondent company had placed the Purchase Order with regard to CT and had been supplied the material worth ₹ 3,20,64,210/-, but owing to the non-supply of CP, the company had purchased the material from other source at a higher price, for which the civil suit is pending and the same shall be proved in those proceedings and the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment. Regards Sandeep Chawan . Thus, there is no force in the plea of Mr.Chhibbar that there was a concluded contract for supply of 6000 MT of CP at the rate of ₹ 12,500/- per Kg. Had the aforementioned correspondences not been there, much less schedule of payment had not been submitted by the petitioner company, the defence of the respondent company would have been malafide and there would have been some force in the contention, but owing to the facts and circumstances narrated above, position is otherwise. Thus, the instant case falls within the parameters laid down in M/s. Madhusudan Gordhandas's case (supra), a landmark judgment rendered by the Hon'ble Supreme Court, holding that where the defence raised is bonafide, remedy for the creditor is not to seek the vindication of his grievance through winding up petition, but elsewhere. Since, it is a matter of record that the suit is pending and the next date fixed in the suit was 10.3.2016 for the evidence of the respondent company-plaintiff before the trial Court, both the parties shall be at liberty to prove their case in accordance with law by leading direct and cogent evidence, vis-a-vis concluded ..... 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