Calcutta High Court
Vip Buildcom P. Ltd. vs Everest Kanto Cylinder Ltd. on 17 January, 2005
Equivalent citations: 2005(2)CHN159, [2005]124COMPCAS774(CAL), [2005]64SCL368(CAL)
Author: Ashim Kumar Banerjee
Bench: Ashim Kumar Banerjee
JUDGMENT Ashim Kumar Banerjee, J.
1. The parties entered into an agreement for supply of industrial gas cylinder. Pursuant to the purchase orders placed from time to time the petitioning creditor supplied cylinders to the company. Supplies were all admitted. Part payments made by the company was also admitted as appears from the statement of account annexed to the affidavit-in-opposition filed by the company. According to the petitioner there had been an outstanding to the extent of Rs. 42,78,831 on account of balance price of the consignment as well as the sales tax amounting to Rs. 62,640 whereas according to the company they were entitled to 15 per cent. discount which would amount to Rs. 47,48,373 and they were entitled to have adjustment of the said sum against the outstanding which would result in refund of a sum of Rs. 4,69,542. The company also claimed damages for non-supply amounting to Rs. 10,50,525.
2. Statutory notice of demand although received by the company was not replied.
3. The winding up petition was contested by the company by filing affidavit. In the affidavit-in-opposition the company not only denied several reminders annexed to the petition but also denied receipt of the statutory notice of demand although xerox copy of the acknowledgment due card was annexed to the winding up petition. Learned counsel appearing for the company on instruction contended that the signature appearing therein was not of any authorised representative of the company.
4. Let me first examine the petitioner's case.
5. The petitioner annexed invoices, delivery challans which are all admitted documents. The petitioner also annexed several letters of reminder receipt of which was appearing on each of the documents although the company disputed those signatures as well as the rubber stamp. The statutory notice of demand was sent by registered post with acknowledgment due card. The acknowledgment due card was duly received back by the advocate-on-record for the petitioner which would show that somebody on behalf of the company received the same. The postal stamps are also appearing from the acknowledgment due card. Admittedly there was no reply to the statutory notice.
6. If I take into account the aforesaid facts it would be clear that the petitioner discharged their onus and the winding up petition warrants admission of the same. If I follow the usual procedure laid down in the Companies (Court) Rules I do not find any reason to refuse the order of admission. Our High Court for decades established a procedure with little departure from the usual procedure laid down in the Companies (Court) Rules in the matter of admission of winding up whereby an opportunity was given to the company prior to the order of admission. The same was done to prevent unnecessary harassment which the company might suffer because of the ex parte order of admission. Such age old practice is still being followed by this court and I do not find any reason to detract from the same.
7. Hence before admission of this winding up petition although I am fully satisfied with the case made out by the petitioner I now examine the defence put forward by the company in their affidavit.
8. In the affidavit-in-opposition the company annexed two documents, one being a copy of the letter along with its courier receipt dated May 30, 2003, and the other being a complete statement of transactions and payments pertaining to the supplies. If we look to the accounts it would appear that the claim made by the petitioner is reflected in the said account barring a claim for 50 per cent. discount amount of Rs. 47,48,373. The letter dated May 30, 2003 (receipt of which was denied by the petitioning creditor in their affidavit-in-reply) referred to a discussion between the parties. According to the company there was an agreement for giving 15 per cent. discount. According to the said letter the company could not avail of 15 per cent. discount because of non-supply and as a result suffered loss and damage to the extent of Rs. 10,50,525. In the second paragraph they asked for a refund of Rs. 4,69,542 lying in the credit on account of 15 per cent. discount. The language of the said letter being most relevant herein is quoted below :
"As per discussion that the undersigned had with your Ms. Raj you seem, not to be ready and willing to deliver 500 numbers of cylinders. You are going back on your promise. In the event the aforesaid delivery was effected by you I would have availed 15 per cent. discount as per arrangement. Since you do not wish to effect delivery I claim damages on account of loss suffered for not being able to avail the 15 per cent. discount which works out to Rs. 10,50,525. By your act, I do not wish to maintain any further business relationship with you.
You are also requested to refund the balance sum of Rs. 4,69,542 lying in your credit on account of 15 per cent. discount as discussed with you.
In the event you wish to obtain any clarification, you may contact me after my return a month later."
9. Relying on these two documents the director of the company filed the said affidavit and verified the same to be true to his knowledge. In paragraph 4 the signature appearing in the acknowledgment due card was denied, so was the service of notice. In paragraph 8 the petitioner contended :
"The petitioner herein is now with its mala fide intent in order to gain certain additional benefits is trying to claim a sum of Rs. 42,78,831 without effecting any further delivery of the aforesaid goods to the company."
10. It also stated :
"I submit it was duly agreed by and between the company and the petitioner that in the event, the order placed by the company exceeds Rs. 3 crore in a particular financial year, the company would be entitled to a discount of 15 per cent. on the total value of goods supplied by the petitioner."
11. A part of paragraph 12 being relevant herein is also quoted below :
"I submit that as per the accounts maintained by the company a sum of Rs. 4,69,542 is due and payable by the petitioner to the company on account of discount at 15 per cent. on the value of the goods supplied to the company by the petitioner as agreed to be given by the petitioner in respect of the transaction that had taken place by and between the parties apart from the compensation of Rs. 10,50,525 as damages on account of the unavailed discount for failure on the part of the petitioner to supply goods within March 31, 2003. It is submitted that from time to time between April 1, 2002 and March, 2003, the petitioner sold and delivered a total quantity of 2,260 cylinders amounting to Rs. 3,16,55,820. The company as such is and was at all material times entitled to a discount of 15 per cent. of Rs. 3,16,55,820 amounting to Rs. 47,48,373. A sum of Rs. 2,73,77,489 has already been paid by the company. No credit has been given to the company for Rs. 47,48,373. The company was under no obligation to make payment of any further amount. On the contrary the petitioner is obliged to refund the balance of Rs. 4,69,542 which has accrued in the company's favour on account of the aforesaid discount as also a sum of Rs. 10,50,525 as damages. It is submitted that such agreement with regard to providing discount was duly agreed upon by and between Ms. Raj who is one of the representatives of the petitioner and myself as one of the directors of the company. Save that the petitioner is under an obligation to make payment and/or give refund of a total sum of Rs. 4,69,542 + Rs. 10,50,525 = Rs. 15,20,067 to the company, all other allegations which are contrary thereto and/or inconsistent therewith are denied and disputed. The company has a valid counter claim against the petitioner and as such the instant petition is liable to be dismissed. The excess payment had been made by the company to the petitioner on account of advance for supply of further 500 number cylinders by the petitioner to the company which was never supplied by the petitioner to the company."
12. If one looks to the contents of the letter quoted supra and the first two averments of the affidavit quoted supra it would appear that according to the company they could not avail of the discount because of short supply and as such the company suffered loss to the extent of Rs. 10.5 lakhs. According to the company the order was placed valued at more than Rs. 3 crores. If the company supplied the last consignment of 500 numbers of cylinders that would result in an aggregate value of supply more than Rs. 3 crores. If we compare these averments with the averment quoted supra being a part of paragraph 12 it would appear that the company claimed benefit of discount at 15 per cent. by taking into account a sale amounting to Rs. 3,16,55,820 apart from a damage for Rs. 10,50,525. If that be the situation then it is not clear from the affidavit as to what was the actual stand of the company. On one hand the company says that the supply was less and as such payment was less which resulted in damages because of failure to avail of 15 per cent. discount, on the other hand company claimed 15 per cent. discount on the basis of a total supply amounting to a sum exceeding Rs. 3 crores. If the second version is correct then what for the damage was claimed is a question whose answer is not clear to me.
13. Mr. Sanjib Banerjee, learned counsel appearing for the company in his eloquent address to the court made his best effort to bring harmony between inconsistent stand taken in the affidavit as well as in the letter. Mr. Banerjee invited me to read something which was not there in the letter or the affidavit to give a harmonious construction of the stand of the company. According to Mr. Banerjee the first paragraph of the letter should be read along with the second paragraph where in fact the claim for discount was made. In an adversary proceeding the parties are given opportunities to place their case on oath taking responsibility therefor. Counsel is only to explain the same and not to bring something new which is not at all there. If we look to the statement of account annexed to the affidavit we would find that an adjustment of 15 per cent. discount amounting to Rs. 47 lakhs odd was in fact made where as the very letter specially the first paragraph says otherwise. Even if I accept Mr. Banerjee's contention that the said letter was not happily drafted the affidavit filed by the company presumably under legal advice and with the active support of legal expert such lacuna should have been explained and removed. What would have been the result of such improvement is not a matter to be discussed now. I am only to add that the same was not done and the reason is obvious. The company was not at all clear as to which stand they should take to evade payment of the claim of the petitioner and as such they could not also properly instruct their counsel in that regard. How much forceful the argument of Mr. Banerjee might be and the tremendous effort given by him to bring harmony in the inconsistent stand of the company I am not at all satisfied that such defence is a bona fide one.
14. In a few recent decisions of the Division Bench of this court including in the matter of SRC Steel Limited (APOT No. 398 of 2004) the Division Bench was of the view that while admitting the petition the winding up court should come to a definite conclusion as to the payability of the debt and the exact amount therefor.
15. In the instant case the amount is not in dispute. It is a case of adjustment of cross claim. When it is an adjustment of cross claim the party making such cross claim must come with a definite case that cross claim is indisputably payable. The company, in my view, miserably failed to do so in the instant case.
16. I am not going into the question as to the disputed correspondence exchanged between the parties. One says the letters of reminder annexed to the petition were not served, the other disputes the letter regarding 15 per cent. discount. If I go into this question that would invite an issue that might warrant regular trial. However, I find that without going into that question the principal issue can be resolved.
17. The last legal argument made on behalf of the company was that since no statutory notice was served upon the company, the winding up petition was not maintainable. When a notice had been sent under registered post with acknowledgment due card through the postal department being a limb of the State and the acknowledgment due card duly came back it should be presumed that the notice was served unless it was proved to the contrary. The petitioner discharged its onus by annexing the photo copy of the acknowledgment due card wherein stamps of two post offices are appearing. Hence, it should be presumed that the notice was served. Mere statement that the same was not received and the signature appearing therein was not of any one from the company, in my view, cannot rebut such presumption. If I have to accept the case of the company in this regard I have to disbelieve the postal authorities who acted in the usual course of business. I do not find any scope to arrive at such conclusion. Hence I hold that the notice was duly served upon the company. Under the statute notice was to be delivered at the registered office. This was done and the requirement of statute was duly complied with. Whether it was received by the managing director or a caretaker of the company or any one on its behalf, is immaterial herein.
18. In the course of hearing the petitioning creditor produced the letters dated May 14, 2003, September 27, 2002 and February 23, 2001, xerox copies whereof were kept on record, copies were also handed over to learned counsel appearing for the company.
19. On a careful analysis of the facts I hold that the petitioner was able to make out a case for admission of the winding up petition. The claim of the petitioner was not disputed whereas the company failed to establish their cross claim put forward by way of adjustment.
20. In the result, the winding up petition is received by this court and is admitted for a sum of Rs. 4,27,831 on account of balance price of goods sold and delivered together with interest at 6 per cent. per annum on and from September 30, 2002, being the last date of payment until payment.
The company would also be obliged to pay sales tax amounting to Rs. 62,640.
21. The petitioner would be entitled to publish advertisement once in Financial Express and once in Aajkaal. Publication in Calcutta Gazette is dispensed with. The winding up petition is made returnable six weeks from the date of publication.
22. The petitioning creditor would, however, not publish such advertisement for a period of two weeks from date.
23. There would be, however, no order as to costs.
24. Urgent xerox certified copy would be given to the parties, if applied for.