Marsons Ltd. vs Mundhra Bright Steel

Girish Chandra Gupta, J.—This was a winding up petition presented by a creditor on the ground that the company is unable to pay its debts. The claim of the petitioning creditor is for balance price of the goods sold and delivered. The facts of the case briefly stated are as follows :--

During the period between 23-9-1998 and 7-6-1999 the petitioning creditor sold and delivered goods worth Rs. 24,09,697 out of which the company paid a sum of Rs. 20,09,108.70 leaving thereby a balance of Rs. 4,00,598.30. The company by its letter dated 9-6-2000 wrote to the petitioning creditor as follows :--

"It has always been our sincere effort to pay your bills on time but due to certain unavoidable circumstances beyond our control we are unable to pay your dues on time. We regret to say that due to the untimely receipt of payments from the various State Electricity Boards, huge sums are blocked. However, we shall take every care to release your dues with the least possible delay.

We regret the inconvenience caused to you.

Thanking you and assuring you of our best attention always."

In spite of the aforesaid promise to pay the company did not pay the aforesaid dues of the petitioning creditor. In those circumstances, a notice u/s 434 dated 1-7-2000 was issued and thereafter the petition was present.

The company in its affidavit-in-opposition has disclosed four several letters claimed to have been sent to the company under certificate of posting. The receipt of each of the aforesaid four letters has been denied by the petitioning creditor. The company has not even disclosed any certificate of posting relating to any of the aforesaid four letters. By the alleged letter dated 24-4-1999, the goods covered by Challan No. 4 dated 13-4-1999 were alleged to have been found defective and, therefore, the petitioning creditor was directed to take back the same. By the alleged letter dated 23-6-1999 the petitioning creditor is alleged to have been informed that the goods supplied by the Challan No. 19 dated 17-6-1999 were defective and the petitioning creditor was similarly requested to take back the same. By another alleged letter dated 23-6-1999 the goods supplied by the Challan No. 18 dated 4-6-1999 were alleged to be defective and the petitioning creditor was requested to take back the same. By still another alleged letter dated 5-7-1999 the goods supplied by Challan No. 4 dated 13-4-1999, the Challan No. 18 dated 4-6-1999 and the Challan No. 19 dated 7-6-1999 were alleged to have been rejected. The company in its opposition besides referring to the aforesaid four alleged letters has further alleged that on 21-7-2000 a suit was filed being Money Suit No. 573 of 2000 for recovery of loss and damage arising out of consumption of the defective goods supplied by the petitioning creditor. The damage claimed is a sum of Rs. 9,49,712.

Mr. Chatterjee, the learned senior advocate appearing for the company, submitted that part of the goods supplied had been rejected and moreover a suit for realisation of the damages is pending. Therefore, this Court should dismiss this application in limine with exemplary costs. With regard to the promise to pay contained in the company''s letter dated 9-6-2000 set out hereinabove Mr. Chatterjee submitted that this was a routine letter sent to all the creditors and it is alleged that due to inadvertence this letter dated 9-6-2000 was issued to the petitioning creditor in order to show that this was a routine letter addressed to all the creditors of the company, alleged copies of 7 several alleged letters have been disclosed containing identical contents addressed to different parties.

The question now is : has the company been able to raise a bona fide dispute to the claim of the petitioning creditor? The answer in my view is in the negative. The reasons why I entertain this view are as follows :--

(a) In paragraph 7 of the plaint filed in the Money Suit No. 573 of 2000, there is an unequivocal admission on the part of the company that all the goods supplied by the petitioning creditor have been consumed.

(b) If the case of the company appearing through the four alleged letters, which are collectively annexure D to the affidavit-in-opposition, is to be believed, then the position is that the goods sold and delivered by the Challans No. 4, 18 and 19 were rejected. If the goods had been rejected due to their defective quality, why should such goods have been consumed by the company?

(c) From the allegations made in paragraphs 5 and 7 of the plaint it appears that the case of the company is that the defect in the goods was discovered after the goods were consumed. If this is to be believed, then the four alleged letters being annexure D to the affidavit-in-opposition containing an alleged complaint with regard to quality of the goods has to be disbelieved. Therefore, the position is that the company is running two cases which have the effect of mutually extinguishing each other. If the bad quality is apparent to the naked eye, the company should not have consumed them. If the bad quality was discovered subsequent to consumption then the earlier alleged complaint with regard to bad quality is bogus. A third case has been run in paragraph 6 of the plaint alleging that the petitioning creditor requested the company to consume the goods on the alleged assurance that the company would not have to pay for the same if the quality were found bad upon consumption. Obviously, there is no iota of evidence in support of such a wild allegation. Regard being had to the common course of natural events and human conduct, existence of any such alleged assurance on the part of the petitioning creditor to the company to consume the goods and not to pay for it is wholly ruled out. It is amusing to note that nobody on behalf of the company even took the risk of stating on oath that the allegations contained in the plaint filed in Money Suit No. 573 of 2000 are true. Is the Court to depend on such wild, reckless and imaginary case run by the company?

(d) Last but not the least is the unqualified admission and promise to pay by the admitted document dated 9-6-2000 which is sought to be explained away by alleging that this was a routine letter addressed to all the creditors. Nothing was easier than taking out from the computer identical prints of the letter dated 9-6-2000 and then to show them to have been addressed to 7 several parties, the existence whereof is not even known to the petitioning creditor. There is no allegation as to how these alleged letters alleged copies whereof are annexure E to the affidavit-in-opposition were served. I have no doubt in my mind that this was a trick adopted to explain away the admission contained in the letter dated 9-6-2000.

(e) The company by resorting to inconsistent stands has amply demonstrated that it has no defence whatsoever to the claim of the petitioning creditor.

For the reasons aforesaid I have no doubt in my mind that the alleged defence caused to be put up on behalf of the company is a mala fide defence and that the company has failed to pay the balance sum of Rs. 4,00,598.30 without any justifiable cause whatsoever. The company is, therefore, liable to pay the aforesaid sum together with interest at the rate of 14 per cent per annum u/s 61 of the Sale of Goods Act from the date of the respective bills until the date of payment. The company is also liable to pay costs of this application assessed at 300 G.Ms.

For the non-payment of the aforesaid dues even after service of the statutory notice the company is deemed to be unable to pay its debts. The petition is, therefore, admitted. The petitioning creditor is directed to advertise the petition once in the Statesman and once in the Pratidin within 3 weeks from the date and the matter is made returnable 4 weeks hence. Publication in the Official Gazette is dispensed with.