Rohit Ferro – Tech Limited vs Auroma Coke Limited

Ashis Kumar Chakraborty, J.

This is an application under Section 433(e) of the Companies Act, 1956 (in short “the Act of 1956â€) for winding up of Rohit Ferro-Tech Limited

(hereinafter referred to as “the companyâ€) on the ground that the company is commercially insolvent. According to the petitioner, in terms of the

various purchase orders issued by the company between April 2014 and September 2015, it supplied coal to the company. Against the total quantity of

coal supplied the petitioner raised various invoices upon the company which were received by the latter. By an electronic mail dated September 17,

2015 the company sent an account confirmation statement (hereinafter referred to as the “said account confirmationâ€) admitting the outstanding

principal dues of the petitioner for Rs. 78,27,887- on account of coal supplied between the period April 1, 2014 and September 16, 2015. However, in

spite of requests of the petitioner the company did not pay said amount or any part thereof.

By a notice dated March 15, 2016 issued under Section 434 of the Act of 1956 the petitioner called upon the company to pay the outstanding amount

of Rs. 78,27,887 as admitted by itself in the said account confirmation, together with interest at the rate of 18% per annum. In spite of receipt of the

said statutory notice neither did the company reply to the same, nor did it make any payment to the petitioner. Thus, the petitioner filed the present

application for winding up of the company.

The company filed its affidavit-in-opposition to the application alleging that by various letters between March 8, 2014 and August 14, 2014 it informed

the petitioner of defective supply, as also short supply of coal. In this connection, the company disclosed the letters dated March 08, 2014, March 25,

2014, August 11, 2014 and August 14,2014 addressed to the petitioner. It further alleged that the said account confirmation was prepared by an officer

of the company who was not conversant with the details and the same does not include the deductions to which company is entitled on account of

delay in supply of goods under the purchase orders. Further, at the relevant time the staff of the company had issued en masse resignation and, as

such, the statutory notice dated March 15, 2016 issued by the petitioner could not be placed before the persons responsible to deal with the same and

the company could not reply to the said statutory notice. The company also alleged that it is entitled to receive Rs.2,30.40.000/- from the petitioner due

to production loss and damage suffered by itself because of delayed supply of coal.

In its affidavit-in-reply the petitioner denied all the allegations made by the company in its affidavit-in-opposition and reiterated its claim in the petition.

On July 19, 2018 this application was taken up for hearing, when it was submitted by the petitioner that this winding up application is founded on the

said account confirmation furnished by the company for the period April 01, 2014 and September 16, 2015 acknowledging its outstanding dues to the

petitioner amounting to Rs. 78,27,887/-. According to the petitioner, the defence sought to be made up by the company on the allegation that its officer

who issued the said account confirmation was not conversant with all the details is an afterthought and devoid of any merit.

It was stressed that the officer of the company who prepared the said account confirmation has not affirmed any affidavit stating that he was not

conversant with the details of the transactions between the parties. Even the petitioner did not withdraw the said account confirmation. With regard to

the alleged letters dated March 08, 2014, March 25, 2014, August 11, 2014 and August 14, 2014 disclosed by the company in its affidavit-in-

opposition, the petitioner submitted that none of the said letters suggested that the company has suffered any loss for any act of the petitioner towards

supply of coal against the relevant purchase orders. It was contended that in any event, in view of the issuance of the said account confirmation for

the period April 01, 2014 and September 16, 2015 by the company those alleged letters have no significance in this case. By referring to the said

account confirmation, it was further argued for the petitioner that from the column under the heading “Debit amount†of the said document, it is

evident that the company prepared the same after deducting various amounts as per the respective debit notes issued by it against the relevant invoice

and the balance amount mentioned in the last column disclosed the actual outstanding amount payable to the petitioner.

It was emphasized that in its affidavit the company has not been able to demonstrate any error in the said account confirmation furnished by itself to

the petitioner. Further, the company has not disclosed any contemporaneous document alleging that it suffered any operational loss due to any act or

omission of the petitioner. With regard to the case made out by the company for not replying to the statutory notice dated March 15, 2016 on the

ground of en masse resignation of its employees, the petitioner submitted that such allegation is also a bald allegation and the petitioner has not

disclosed any document to substantiate such allegation. It was strongly contended that the allegations made by the company for the first time in its

affidavit-inopposition lack prima facie proof and such allegations have been cooked up only to delay the realisation of the bona fide claim of the

petitioner. Urging all these, it was strenuously argued for the petitioner that the company has failed to disclose any bona fide defence to the

petitioner’s claim in this application and, as such, this application should be admitted. After the conclusion of the submission made on behalf of the

petitioner the hearing of the application was adjourned on the ground of the absence of the learned counsel for the company, till July 25, 2018.

On July 25, 2018 when the application was taken up for hearing at the very outset of his submission, learned counsel for the company sought to file a

supplementary affidavit. It was contended that the said account confirmation disclosed by the petitioner is an incomplete document as the same does

not reflect the debit entries appearing after the figure Rs. 78,27,887/- at the last page of the said document. Therefore, leave should be granted to the

petitioner to file the supplementary affidavit disclosing the complete account confirmation. Such prayer of the company was strongly opposed by the

petitioner. It was contended by the petitioner that after completion of the submissions of its learned counsel, there is no scope for the company to

make out a new defence by filing a supplementary affidavit disclosing a new document.

It was further argued for the petitioner that in any event, in its affidavitâ€"in- opposition the company has not denied issuance of the said account

confirmation by itself, as disclosed in the petition and the statutory notice dated March 15, 2016, but it only alleged that the said account confirmation

was prepared by an officer of the company who was not conversant with the details and the same does not include the deductions to which company

is entitled on account of delay in supply of goods under the purchase orders. Thus, according to pettioner, the prayer made on behalf of the company

to file a supplementary affidavit, at this belated stage lacks bonafide and this court would refuse to allow the petitioner to file any supplementary

affidavit.

In the present case, the company has filed its affidavit- in- opposition where it has not disputed the issuance of the said confirmation of accounts as

mentioned in the statutory notice dated March 15, 2016 and as disclosed in the Annexure â€"“D†to the application. [In this connection, the

averments of the company made in paragraph 8 of its affidavit- in â€" opposition are extracted below:

“…….I say that the account confirmation statement forming part of Axxexure ‘D’ to the said petition does not include the deduction to

which the company is entitled to on account of delay in supply of goods under the purchase orders. The said statement has been prepared by the

officer of the company who was not conversant with all the details and as such the claim of the company in its entirety was not considered while

preparing the confirmation statement……..â€​

Considering the above case made out by the company in its affidavit-in- opposition with regard to the account confirmation, I found the objection

raised by the petitioner to the prayer of the company for filing supplementary affidavit is quite justified and could not allow the prayer of the company

to file the supplementary affidavit. Thereafter, Mr. Sharma, learned counsel representing the company submitted that since the Court refused the

prayer of the company to file the supplementary affidavit he has no further submission to make on behalf of the company.

Although, learned counsel for the company refused to make any oral argument but I am of the opinion that this Court should decide this application by

considering the pleadings of the respective parties, already discussed above. In the present case, the petitioner has founded its claim against the

company primarily on the said account confirmation furnished by the company disclosing that Rs. 78,27,887/- remains due and outstanding by itself to

the petitioner on account of the invoices raised by the latter for the period April 1,2014 and September 16,2015. The company could not deny the

issuance of the said account confirmation to the petitioner. However, in its affidavit-in-opposition the company for the first time sought to disown its

obligation to pay to the petitioner the outstanding amount mentioned in the said account confirmation alleging that the officer who issued the document

was not conversant with all the details.

However, there is conspicuous absence of an affidavit by the said officer of the company stating his ignorance of the facts relating to the transactions

between the parties herein. Further, when the said account confirmation disclosed the outstanding dues of the company to the petitioner was arrived at

Rs. 78,27,887 after deducting the various amounts from its respective invoices, the company could not point out any error in the entries or calculation

reflected in the said document. The said letters dated March 08, 2014, March 25, 2014, and August 11, 2014 and August 14,2014 disclosed by the

company in its affidavit were issued by it to the petitioner in respect of the separate purchase order dated February 27, 2014 and by the letter dated

August 14,2014 the company requested the petitioner for early dispatch of material under the purchase order dated July 03,2014. Further, none of the

said letters suggest any alleged claim of the company for any operational loss suffered by it due to delayed supply of coal by the petitioner.

There is complete absence of any prima facie evidence for the alleged loss suffered by the company on account supply of coal by the petitioner. For

all these reasons, I am unable find any merit in the defence sought to be made out by the company that the said account confirmation is not binding on

it. In the statutory notice dated March 15, 2016 the petitioner expressly referred to the said account confirmation statement based on which it claimed

payment of Rs. 78,27,887 - from the company.

The receipt of the said statutory notice dated March 15, 2016 by the company is not in dispute. However, in the absence of any prima facie evidence I

do not find any reason to believe the case made out by the company that the said notice was not brought to the notice of the concerned officer of the

company as there was en masse resignation of its staff. Further, there is complete lack of any prima facie proof of the company suffering any

operational loss due to any act of the petitioner in order to lend any credence to the purported claim of the company that it has suffered any production

loss of Rs.2,30,40,000/-, as alleged in its affidavit â€"in- opposition.

For all the foregoing reasons, I find that the company has failed to make out any bona fide defence to the claim of the petitioner in this application.

Accordingly, this winding up application against the company is admitted for Rs 78,27,887 - with interest, at the rate of 8% per annum from the date of

receipt of the statutory notice dated March 15, 2016 till the date of payment.

The company is directed to pay the above amount to the petitioner by way of seven monthly instalments from the month of August, 2018. By the first

six equal monthly instalments the company shall pay the principal amount of Rs. 78,27,887/- to the petitioner and by the last instalment it shall pay the

total interest amount as directed above to the petitioner. The first of such instalments shall be paid by the company to the petitioner within August 10,

2018 and the balance instalments shall be paid within the 10th day of each succeeding month. Subject to payment of all the seven intalments the

winding up application shall remain permanently stayed.

However, in default of payment any one of the monthly instalments, the petitioner shall advertise this application once, in the English newspaper

“The Statesman†and once, in the Bengali newspaper “Bartamanâ€. In the said notices the petitioner shall mention that the application would

be returnable before this Court, on the first Monday after four weeks from the publication thereof. The publication in the official gazette is dispensed

with. Let, urgent certified photostat copy of this judgement, if applied for, be made available to the parties , subject to compliance of all requisite

formalities.