Bombay High Court
Dubai Dry Docks Co. Ltd. vs Hede Navigation Ltd. on 28 March, 1988
Equivalent citations: [1988]64COMPCAS1(BOM)
JUDGMENT G.D. Kamat, J.
1. This petition is instituted by Dubai Dry Docks Co. Ltd. for winding up of M/s. Hede Navigation Co. Ltd., for short, ``the respondent company", on the ground that the respondent company is unable to pay the debt of Rs. 13,88,725 corresponding to US $ 1,24,985 which includes their claim in the principal amount of US S1, 06,825, the remaining being interest.
2. The respondent company wanted the petitioners to dry dock a vessel, Discaria Harvest, to carry out repairs. Estimates were prepared on March 22, 1986, amounting to US $ 5,97,658. However, the respondent company indicated that they were not in a position to carry out the rapiers for that value and that they would be content to carry out such repairs so as to maintain the class of the vessel as a result whereof it was agreed that the repairs of the value of US $ 1,51,000 be carried out and accordingly repairs were done in April, 1986. The invoice dated April, 1986, speaks of repairs being carried out worth US $ 1,51,000. Despite the repairs, no payment was forthcoming. several promises were held out, concessions were given by the petitioners and despite the proposal of payment of the value by installments, except for a single installment of US $ 35,625 corresponding to 25 % of the invoice, nothing further has been paid.
3. That in the meantime another vessel by name Shanta Rohan owned by the respondent company also got repaired in June, 1986, but the respondent company disputed their liability to pay for the repairs of that vessel, Shanta Rohan. It in this view of the matter that the petitioners pray that the respondent company be wound up and a liquidator appointed.
4. Shri P. Sancheti, learned counsel appearing for the petitioners, took me through various documents and more particularly the correspondence exchanged and relying upon various statements and representation made by the respondent company, he urges that a clear case is made out that the respondent company is trying to delay the payment by raising frivolous despite which are not genuine but merely a cloak for their inability to pay a just debt and that, therefore, the petitioners are entitled for the orders prayed for in the petition.
5. Invoice dated April 26, 1986, gives details of the repairs carried out item-wise of the value of US $ 1,51,000 and there is an acknowledgment ``agreed" by one B.M. Hans who is indisputably the technical manager of the respondent company. It is common ground that a reduction of 5 % was made in favour of the respondent company corresponding to US $ 1,000 was made. By the telex dated May 14, 1986, the respondent company while seeking reduction prayed for rescheduling the payment of the invoice value on making reference that the respondent company had been placed in some hopeless situation and faced the problem of leakage of the ammonia cargo as a result of which they are black listed in Gulf ports. The petitioners accepted the schedule of payment as suggested in four installments, each of US $ 35,625, the first to be a paid on July 25, 1986, followed by payment every quarter thereafter. However, even before the payment of the first installment fell due, by the telex of July 14, 1986, the respondent company held out to the petitioners that they are awaiting the Reserve Bank's permission and, therefore, the payment would be delayed by a week beyond July 25, 1986. The petitioners agreed to the payment latest by August 13, 1986, or else they would charge interest at 1 1/2% per month. With some delay, the first installment was paid but by that time the second installment fell due, the respondent company sought time up to November by the telex of October 29, 1986. By another telex of November 4, 1986, the respondent company held out that they will try to adhere to the payment schedule. Pursuant to the demands of the petitioners by another telex of January 3, 1987, the respondent company held out that , viz., Discaria Harvest, they would pay the balance thereof in five installments of US $ 25,000 in February, 1987, April, 1987, UL 1987( must be July, 1987), April, 1987, (must be August, 1987, or September, 1987(, October, 1987, and the balance of US $ 6,825 in December, 1987.
6. It is no doubt true that in one of the ;telex a; mention has been made that there was a problem of leakage and heavy losses being incurred by the respondent company but then, however, it must be prima facie conclusively held that the respondent company never disputed their liability to pay and on top of it they always acknowledged and only sought accommodation to meet out the same.
7. It is also a fact which cannot be overlooked that on getting the vessel, Discaria Harves, repaired, the respondent company entrusted their other vessel, Shanta Rohan, to the petitioners for dry docking and repairs and they disputed their liability to pay for the repairs. Having found that no money was forthcoming from the respondent company, the petitioners instituted a suit on the Original Side of the Bombay High Court, being Summary Suit No. 379 of 1987 on February 10, 1987. It is equally indisputable that suit and equally clear from the order made on September 10, 1987, that the motion for attachment before judgment was dismissed.
8. In the light of these facts, circumstances and correspondence, it is urged by learned counsel for the petitioners that at no stage, prior to the filings of the suit in Bombay, any challenge was made to the repairs carried out by the petitioners to the vessel, Discaria Harvest, and what is more, for the first time a climate is sought to be created for making a counter-claim against the petitioners in that suit while opposing the emotion for attachment for bad workmanship in relation to Discaria Harvest. It is urged that the respondent company having conclusively accepted their liability are now puting up a hoax to cover up their inability to pay a just debt. The averment made in the affidavit in reply dated December 2,1987, by M.M. Sardsai, director of the respondent company, says that they were required to sustain a loss and had to spend Rs. 31 lakhs for repairs and another Rs. 20 lakhs by way of standing charges for having the ship repaired at Singapore in January, 1987. This is palpably false or untenable, urges Shri Sancheti, when compared to the earlier statement in their letter dated January 12, 1987. In answer to one of the letters of the petitioners while pointing out certain defects in repairs of Discaria Harves, the respondent company held out:
"Due to these defects, the class as well as surveyors at various ports had been called for extensive surveys and we have been asked to go for heavy repairs on many items which were otherwise not due. Consequently, the company had to face heavy losses and the ship was required to spend over U.S. $ 5,00,000 for remaining gin commercial service."
9. It is argued that if the `petitioners were to be blamed for bad workmanship in respect of Discaria Harvest, in April, 1986, the respondent company would not have entrusted their other vessel, Shanta Rohan, in June, 1986, and this being the telltale in the matter, there is nothing bona fide on the part of the respondent company.
10. This petition is being vehemently opposed. Shri M.S. Usgaonkar, learned counsel appearing for them in the first instance, mentions that in a widening up petition, a petitioner must first establish bona fides and when the petitioner fails, the petition must be dismissed even at the threshold Despite knowing that the petitioners had to recover a large amount of money, counsel points out that the respect of Shanta Rohan though a reference was made to their claim, viz. Discaria Harvest. Now, he says that despite the fact that the claim had matured, it was not taken in that suite and what is more, with a view to pressurise the respondent company, a motion for attachment of Shanta Rohan was sought and ;having lost that attachment, the petitioners, with a view to further pressurise the respondent company, have instituted the present proceedings under bad faith. On the facts disclosed, learned counsel brings to may notice that unconditional leave is granted to defend that suit.
11. Once the unconditional leave was granted and by the order dated September 1o, 1987, attachment was dismissed despite the fact that the claim was ripe and no relief sought in that suit, the present petition is instituted significantly on October 15, 1987 , and in that context it is now urged by counsel that the action to wind up the company is not bona fide. Reliance has been placed on the authority of Cotton Corporation of India Ltd. v. United Industrial Bank Ltd., .
12. It is next mentioned that the counter claim that the respondent company has is far in excess of the ;claim of the petitioners and this by itself is a good circumstance for refusing the relief.
13. Mr. Usgaonkar now mentions that the vessel is admittedly meant for transporting ammonia and despite the repairs carried out by the petitioners, there was such leakage in the foreign port that the port authorities have black-listed the respondent company and,m therefore, the fact remains that works were not carried out according to the requirement and, therefore, the claim of the respondent company cannot be labeled as not genuine. The second aspect raised is that the relief valves have lifted at 4 bar pressure instead of 15 bar pressure and this was again against the requirement. Having regard to the correspondence made by the captain of the ship and its chief engineer, a prima faces case that no adequate repairs had been carried out is made and, therefore, the responded company were forced to carry out petitioners filed tat suit at Bombay restricting the claim only in repairs a huge cost of Rs. 21 lakhs and hence no want to bona fides can be attributed to the respondent company. Mr. Usgaonkar now says that three facts are established, firstly, the fact of leakage, secondly, black listing and, thirdly, substantial repairs. This being the position, he now argues that four matters stand out, 1. that the counter-claim raised by the respondent company is bona fide, 2. that counter-claim made is far in excess, 3. that a right was clearly reserved in the telex of May, 14, 1986, that damages would be sought at a later date, and 4. that all this material was brought out when the suit was filed in Bombay in respect of Shanta Rohan. Having regard t the above, it is urged that the present proceedings instituted after the attachment wa dismissed lends support to their case. he now submits; that if the petitioners were to file a suite against the respondent company and to seek an interim relief, the petitioners would have met the same fate as they met in the case of Shanta Rohan and,therefore, resort to the present petition as a device to wield pressure cannot be ruled out.
14. I, am, however, not prima facie in agreement with what is contended by the respondent company. The question as to whether in the telex of May 14, 1986, any reservation was at al made for a claim again the petitioners is highly doubtful. It merely quotes certain messages exchanged and the cudgel appears to be against the party which nominated Discaria Harves as unseaworthy. I am prima facie of the view that the petitioner's claim for repairs was never disputed until January, 1987, and it is only vehemently disputed when that suit was filed relating to recovery of dues in respect of Shanta Rohan . Prior to that, the correspondence reveal that the respondents wanted only time to pay. What is more, they sought installments and a reschedule of the payments from time to time. The further fact remains that the petitioners were forced to file that suit because Shanta Rohan is owned by the respondent company whereas Discaria Harves does not belong to them. Even while arguments were going on, Mr. Usgaonkar was unable to dispute seriously the claim of the petitioners and the emphasis was that the counter-claim of the respondent company is far in excess of the claim of the petitioners. I am also unable to accept that merely because the petitioners did not club this claim in their summary suit filed in Bombay, it can have nay impact on he present petition or for that matter on the motion for attachment which was lost. It requires no reiteration that matters relating to attachment before judgment stand ion different footing.
15. Since Mr. Usgaonkar insisted that the respondent company wants to file a suit for recovery their claim against the petitioners, all that I can do is to stay the advertisement of this petition for 3 months in order to enable the respondent company to establish their bona fides. The respondent company is to deposit a sum of Rs. 10 lakhs on or before June 30,1988, in this court and adopt in the mean time any proceeding they want against the petitioners. In the event Rs. 10 lakhs are not deposited before June 30, 1988, this petition be advertised. Petition accordingly to be on board immediately after June 30, 1988. Rule accordingly made.