9911796707
TMI Blog1994 (4) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The first order that was placed on the petitioner on March 3, 1987 was for detailed engineering and consultancy services for the project of Bar and Section Rolling Mill Complex valuing ₹ 45 lacs (hereinafter called 'the first contract'). Another order was placed on March 4, 1987 for the supply of equipment and initial spare pans for the Bar and Section Mill valuing ₹ 2,93,50,000/-(referred to hereinafter as 'the second contract'). ₹ 284.5 lacs was the contract price and the spare parts to be supplied were worth ₹ 9 lacs. The scope of work under the first contract was to cover (a) rendering detailed engineering and consultancy services for the aforesaid project as per the details mentioned in the order and (b) supervision of erection and commissioning at site of the mechanical equipment for the Bar and Section Mill Project. It may be mentioned that a mini steel plant was being set up by the company at its works in village Ram Banjaran District Sirmour (HP). The time schedule for the completion of the project was to be furnished by the petitioner within two months from the date of the order and that was to extend over a period of 18 months f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice under Sections 433 and 434 of the Act was sent to the Company for the release of the pending amounts. Despite the notice the Company failed and neglected to make the payment and it is alleged that the company raised frivolous counter claims against the petitioner which were never brought to the notice of the petitioner during the execution of the contracts. The total amount claimed by the petitioner from the company under both the contracts comes to ₹ 52,80,413;-. Hence, the present petition for the winding up of the company on the ground that it has failed/ neglected to meet its admitted liability. 4. The company in its written statement has controverted the allegations made by the petitioner. It is stated that the petitioner committed so many irregularties like delayed supply of material, the material being defective and the same being not of proper rating. According to the company it had been making payments to the petitioner regularly though supply was being made after a great delay. The stand taken by the company is that its project had not only been delayed but the plant as set up cannot produce Rounds & Squares and Hats of the sizes beyond 63 mm thickness as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the minutes of Meeting held on 11-5-90. 13.00 - Cost of Motor, Gear Box of underrated capacity which are to be changed. 18.00 -Cost of Rolls of Wrong Specifications which are of no use. 3.50 - Improper requirement of Cables. 1.15 - Liquidity damages for delay in supply of equipment. 21.34 56.99 Amount already paid by SSL 295.26 352.25 Thus, you will observe that we have already made excess payment of TDL. You will appreciate that SSL had agreed to pay bonus to TDL for timely completion of the schedule and there was no limit for the earning of the bonus. I may bring to your kind notice that commissioning of the mill has been delayed by 21 months and the delay has resulted in increase of interest charges by ₹ 144.00 Lakhs in addition to the increase in cost of operative expenses and production losses. SSL has always helped TDL in financing purchases of the equipments from their suppliers and even after making such payments, the timely delivery of the equipments was not made and your kind intervention was sought. It has never been our intention to withhold any payment SSL has been put to great loss by TDL which has jeopardised our liquidity position and endangered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obviously an excess payment of ₹ 11.18 lacs as alleged by it has been made. However, if the deduction of this amount is not called (or as alleged by the petitioner than a large sum of money would certainly be due to it which the company can be said to be disputing without any justification. There are five items of deductions and I will deal with each of them separately: (i) Cost of modification made by SSL as agreed by TDL in the Minutes of Meeting held on 11-5-1990. 6. A sum of ₹ 13 lacs is sought to be deducted on this account. It appears that the company had to make some modifications of the cooling bed when 80% of the job had been completed and the balance was in progress. A new cooling bed was fabricated and in a meeting of the representatives of the petitioner and the company held at site on May 11, 1990 the petitioner agreed that the entire cost of revamping of the cooling bed will be borne by the petitioner and that the company will give the complete break up of the cost. Proceedings of this meeting were recorded and duly signed by the parties and a copy thereof is Annexure R2 with the written statement. Again, in his letter dated 6-1-199I ( Annexure R5 with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 am informed that the petitioner has already filed a civil suit after the recovery of the amount claimed by it and the trial Court will obviously decide the issue on the basis of the evidence that will be led before it. 9. The only item that now remains to be considered is (ii) -- (Cost of Motor, Gear Box of under-rated capacity which are to be changed). A sum of ₹ 18 lacs is being withheld as the cost of motor/gear box of under-rated capacity which are to be changed. This was the most seriously contested item of deduction and if the petitioner succeeds in showing that the Company had no basis to deduct this amount, it would be entitled to a winding up order since the Company is claiming an excess payment of ₹ 11.18 lacs only. What is contended by the petitioner is that at the time of placing orders the requirement of the Company of product-mix for its Hot Bar and Section Mill was such so as to produce Rounds & Squares and Flats of thickness varying from 25 mm. to 100 mm. size and again 80 x 11 to 120 x 16 mm. size. Keeping this requirement in view the petitioner had suggested the installation of the motor of requisite capacity and after the same had been installed, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fications at the time of giving the contracts. Again, in the meeting of the representatives of the parties held on 5-6th February, 1990 (Annexure R3 with the written statement) it was brought to the notice of the petitioner that finishing mill motor gets overloaded while rolling 63 mm. size Rounds and the current exceeds the maximum current it can take and it was agreed between the parties that the petitioner will depute its experts and design engineer to set this problem right. In view of these meetings between the parties the proceedings of which were recorded and duly signed by their representatives , the only Irresistible inference is that the Company had given its requirement to the petitioner at the time when the contracts were awarded but the petitioner advised the capacity of a motor which turned out to be under-rated as a result whereof the Company is unable to roll 63 mm. thickness size Rounds and above. The plant is functional after it was commissioned but Rounds .& Flats of smaller thickness alone can be rolled which is below the requirement of the Company as was originally agreed upon if the company is to roll the Rounds and Flats of the required thickness it has to in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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