Punjab-Haryana High Court
Texcon Energies vs Euro Cotspin Limited And Others on 11 March, 1999
Equivalent citations: [1999]96COMPCAS752(P&H)
Author: Swatanter Kumar
Bench: Swatanter Kumar
JUDGMENT Swatanter Kumar, J.
1. Texcon Energies a partnership concern through its partner Smt. Anieshia Vasudeva has filed this petition under sections 433(e), 434 and 439 of the Companies Act, 1956 (hereinafter referred to as "the Act"), for winding up of Euro Cotspin Limited (hereinafter referred to as "the respondent-company") for its inability to repay its admitted debts. The respondent-company is a limited company duly incorporated under the provisions of the Act has its registered office at Chandigarh. It is stated by the petitioner that it had been supplying paper cones for a considerable period to the respondent-company and running account for the supply made and received was being maintained between the parties. The items supplied are taxable under the Sales Tax Act. The respondent-company was sending their statement of account for reconciliation of accounts throughout the periods 1996-97 and 1997-98. Lastly, on March 31, 1998, the statement duly signed by the respondent-company was duly received by the petitioner-company showing a sum of Rs. 7,68,100 payable to the petitioner. However, the petitioner had pointed out that, in fact, a sum of Rs. 8,95,553 was due and not Rs. 7,68,100 as stated by the respondent-company. These statements of account have been placed on record as annexures P-1 to P-2. The respondent-company issued a cheque for a sum of Rs. 1,00,000 on April 13, 1998, which was dishonoured on presentation and, thereafter, it has come on record that a bank draft for the said sum was issued in lieu thereof to discharge this limited liability.
2. From April 30, 1998, further material worth Rs. 3,13,560 was supplied. Copies of the bills, etc., have been placed on record. Upon the final reconciliation of the accounts and taking into consideration the payments made by the respondent-company, the petitioner-company claimed a sum of Rs. 10,48,408 on account of principal amount while Rs. 5,56,398 was claimed on account of interest. In paragraph 14 of the petition the petitioner has stated as under :
"14. That after the service of the notice the respondent-company has issued the following amounts :
(i) Dated May 2, 1998, DD of Rs. 1,00,000;
(ii) Dated may 2, 1998, credit note Rs. 1,925;
(iii) Dated May 14, 1998, cheque for Rs. 15,000.
In this manner the respondent-company paid only a sum of Rs. 1,15,000 and credit note of Rs. 1,925 credited in the account of the respondent-company and as such as on the date of the filing of the present petition, the principal amount due is Rs. 10,48,408 besides the interest, which was calculated up to April 30, 1998, as Rs. 5,56,398."
3. The petitioner-company could not recover the amount despite the service of notice under sections 433 and 434 of the Act. Hence, the petitioner-company has filed the present petition for winding up of the respondent-company. The respondent-company received the notice issued on behalf of the petitioner and sent reply dated August 10, 1998, annexure P-34 to the petition. No dispute whatsoever was raised. The said reply reads as under :
"Dear Sir, Under the instructions of my client, Euro Cotspin Ltd., Lalru Office, receipt of legal notice dated 16-5-1998, sent by you through your advocate Sh. Chetan Mittal, is acknowledge by my client. On receipt of further instructions from my client, I would revert to the subject for detailed reply.
Yours faithfully, (Abnash Singh) Advocate."
In the reply filed before this court, now the respondent-company has raised mainly two issues. Firstly, that the material supplied by the petitioner was of a poor quality and the respondent-company had informed the petitioner of this fact, vide letter dated April 21, 1998, May 4,1998, and May 9, 1998, copies of which have been placed on record as annexures R-1 to R-3. Secondly, it is pleaded that by payment of Rs. 1,00,000 the entire account was settled and another sum of Rs. 48,120 was paid in cash towards the full and final settlement of the account and, as such, nothing is due to the petitioner and the winding up petition is not maintainable. Both the issued raised in the reply are a mere afterthought and are without any merit.
4. Firstly, at no point of time, prior to the reply being filed in this petition, the respondent-company ever raised such issues. On the other hand, the India Paper Cones and Tubes Manufacturers Association, vide its letter as late as June 12, 1998, assured the petitioner-company on behalf of the respondent-company that the amounts claimed by the petitioner would be shortly paid. Vide annexure P-1, the statement of account prepared in the due course of business by the respondent-company itself, was given to the petitioner-company clearly admitting the liability to the extent of Rs. 7,68,100, which was clarified vide annexure P-2 by the petitioner. These documents clearly indicate that there was hardly any dispute raised by the respondent-company with regard to the supply and/or quality of the material during this entire period. Another factor which cannot be ignored by the court is that on April 13, 1998, admittedly the respondent-company had issued a cheque for a sum of Rs. 1 lakh drawn on Punjab and Sind Bank, Lalru, District Patiala, which was dishonoured on presentation. Thereafter, bank draft/pay order for the said amount was issued in lieu of this cheque on May 2, 1998. If the material supplied by the respondent-company was found to be defective one could hardly see any justification for making the payment to the petitioner as late as in May, 1998. Strange enough, no reference has been made either to the cheque or to the bank draft in either of the letters allegedly written by the respondent-company to the petitioner (annexures P-1 to P-3). The conduct of the respondent-company is not that of a reasonable prudent person in the normal course of things. These letters were allegedly sent by P. C., but no proof of despatch of these letters has been placed on the record of this case. The contradictory stand taken by the respondent-company indicates that either of the stand taken by the respondent-company is not bona fide and fair. On the one hand, the stand is that the material supplied to the respondent-company is defective, while on the other hand full and final settlement is alleged to have taken place on May 2, 1998.
5. Another suspicious circumstance is that even annexures R-2 and R-3 which were written after May 2, 1998, after final payment, again do not refer to any full and final payment being made on behalf of the respondent-company. I have no doubt in my mind that annexures R-1 to R-3 were never sent to the petitioner at any point of time.
6. At this stage, I must notice that the items supplied by the petitioner to the respondent-company are taxable and the respondent-company is stated to have supplied the S. T. Forms, thus, raising hardly any dispute to pay its liability towards the petitioner. It is the admitted case of the parties that the material was supplied even after April, 1998. In other words, there is hardly any correspondence on record to prove even prima facie the plea of the respondent-company that the material was defective. Annexures R-1 to R-3 relate to the supply after April, 1998. In other words, there is no evidence on record whatsoever to show that the material supplied was of poor quality.
7. Having received the notice under sections 433 and 434 of the act, there was an obligation on the part of the respondent-company to plead its complete case in reply to the notice. The respondent-company opted to keep silent by giving a reply, which would be least expected from a limited company. The reply was not even sent in routine but was sent through counsel. The court would be justified in drawing adverse inference against the respondent-company.
8. The cumulative effect of the above discussion is that the respondent-company has no justifiable or bona fide dispute to the claim in question raised by the petitioner-company against it. In any case a sum of Rs. 7,68,100 after deducting the paid amount would be due with interest. No offer has been made on behalf of the respondent-company in court even to repay the said amount.
9. Resultantly, this petition is admitted, as the respondent-company has failed to pay its admitted liability in spite of due service of the statutory notice. Notice of admission be published in the Tribune, Indian Express, Jansatta and the Official Gazette of the union Territory, Chandigarh, giving 14 days clear notice to the parties prior to the next date of hearing.