Kanak Lata Saha vs Diabari Tea Co. Ltd.

Sanjib Banerjee, J.

The petitioner claims to have effected supplies to the tea garden of the company. According to the petitioner and the document being annexure A to the petition, a sum of Rs. 6,97,945.41 remained unpaid to the petitioner as at the end of the year 2000. Subsequent supplies were effected by the petitioner to the tune of Rs. 3,99,419 during the year 2001. Payments totalling to Rs. 7,11,319.90 have been received by the petitioner between May, 2001, and February, 2004. According to the petitioner, a sum of Rs. 3,86,045.41 remains due and owing from the company on account of principal.

The petitioner attempted to serve the statutory notice at the registered office of the company. Such notice was returned to the petitioner with the postal remark "addressee not known". Another notice was served by the petitioner at the head office of the company. The petitioner received the acknowledgment card evidencing receipt of such notice by the company at its head office.

Such fact has not been denied in the affidavit used by the company.

It was submitted that the presumption of the company''s inability to pay could arise only upon statutory notice being received at the registered office of the company. This, it was submitted, had to be strictly construed and any other notice received by the company or the persons in management, would not suffice.

Held, since was disputed that the company had notice of the petitioner''s demand and since no reply was used by the company in response of the petitioner''s claim, even to indicate that the statutory notice was not in order, the company should not be afforded the luxury of urging such ground. The main purpose of a notice is to make the noticee aware. There was no denial in the affidavit used by the company that the company was aware of the stetutory notice having been issued. Merely because the petitioner cause not demonstrate that the statutory notice was served at the registered office of the company, would not be the ground enough for rejecting a winding up petition.

As to the merits of the petitioner''s claim, the company cited its management having changed and the demand having been incited by persons formerly in management of the company. The company also contended that the alleged claim till December, 2006, was based on a forged document and that it would appear from the petitioner''s averments that during the period beginning January, 2001, the petitioner had received more payments than the value of the goods supplied to the company. In effect, it was suggested in the company''s affidavit, that the company had made excess payment. There is no indication as to why such excess payment was required to be made by the company.

The company''s affidavit has been affirmed by one, Kirti Kumar M. Patel. In the affidavit in reply used by the petitioner, a document dated May 2, 2001, has been relied upon. Such document is an indemnity given by the erstwhile directors of the company in favour of the persons, who subsequently came in control of the company. Such document was executed on behalf of the new management by Kirti Kumar M. Patel. The document refers to a list of the creditors of the company as at December 31, 2000. The list appended to such document is the same list which appears at page 8 of the petition which the company claimed in its affidavit to be a forged document. The name of the petitioner appears at the top of such list. The petitioner, Kanak Lata Saha, carries on business the name and style of "Agchem".

Learned Counsel appearing on behalf of the company, cited Asu Singh Rajput v. Gehlot Enterprises Ltd. [1994] 1 CLJ 449, for the proposition that if a document was disputed, such document could not be made the basis of the winding up claim and at least, the genuineness of such document should not be allowed to be cited before the winding court to proceed on the basis thereof.

The facts in that case were somewhat different from the facts at hand. In that case the genuineness of a promissory note had been challenged and the defence was that the promissory note had been removed and such removal had been contemporaneously complained of. The company in that case claimed that the promissory note which had been wrongfully removed had subsequently been filled up and made the basis of a winding up petition.

In the instant case a list certified by the company''s auditor was relied upon. Such list was said to have been manufactured. In answer to such charge the document executed by the person who had verified the company''s affidavit had been relied upon to which the list was appended. Further, it would be evident from the petition itself that the company had made payments subsequent to January, 2001, which were in excess of the value of the goods supplied during the relevant period. Ordinarily, there would be a presumption on the basis of such payment that past dues of the company were being liquidated. This presumption could have been rebutted by the company by relying on other transactions to substantiate the company''s charge that the list relied upon by the petitioner was not genuine and that the additional payments made during the relevant period were on account of other supplies effected or other transactions involving the two parties.

A second decision was relied upon on behalf of the company reported at [1980] 2 SCC 760. The judgment of the learned Single Judge of the Madras High Court proceeded on the basis that in addition to the petitioning-creditor''s debts being indisputable, the petitioner had to make out a case that the company was otherwise insolvent and that it was liable to be wound up. The principal distinction between that case and the matter at hand is the procedure followed by this court. It has been the practice as recognised in Bharat Vegetable Products, In re [1952] 22 Comp Cas 62 : [1952] 56 CWN 29 that

It has been the consistent practice of the court to deal with creditor''s winding up petitions at two stages. At the admission stage the court enquires as to whether there is a debt due to the petitioner. It is at the final stage, and before the order of winding up is passed, that the court considers whether the company is liable to be wound up. In the practice which is followed in the court, a winding up petitioner is entitled to ex debito justiciae to have the petition admitted upon the creditor satisfactorily establishing that there was a debt due to the petitioner from the company. The discretion of the court as to whether the company should be wound up or not is exercised at the final stage in the procedure that we adopt.

I have no doubt that the petitioner has been able to establish that there is debt due to the petitioner which the company is unable to pay. The inability to pay arises out of the company''s refusal to pay, despite there being no cause to justify the refusal.

The winding up petition is, therefore, admitted for the principal sum of Rs. 3,86,045.41 together with interest at the rate of 10 per cent, per annum from the date of statutory notice till payment. If entire dues are paid off by the company within a period of six weeks, then the petition shall remain permanently stayed.

In default of such payment being made, the petition will be advertised once in "The Statesman" and once in the "Financial Express". The advertisements will indicate that the matter will be returnable on the next available court date four weeks after the publication of the advertisements. In such event the publication in the Official Gazette shall stand dispensed with.

After the order is passed learned Counsel for the company seeks a period of eight weeks to make payment. Such time, as prayed for, is granted. The company is given liberty, to make payment within a period of eight weeks from that date.

Urgent certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.