Shyam Sundar Casting Pvt. Ltd. vs Suresh Enterprise

Ajoy Nath Ray, J.—This is the stage of passing of a receiving order on a winding up application. The winding up application is based upon a statutory notice which called for payment of six bills which had been raised upon the company for sale and supply of iron scrap materials.

The sixth of the said bills dated June 1, 1992, for Rs. 3,33,000 and odd is not disputed. The disputes, if disputes those can be called, are raised with regard to the other five bills respectively dated April 27, 1992, May 2, 1992, May 11, 1992, May 12, 1992 and again May 12, 1992. The claims on the six bills aggregate in the principal Rs. 13.75, lakh approximately.

It is the admitted position between the parties that they have had transactions from the year 1988 and that there were no substantial disputes between the parties for the period ending with the financial year 1991-1992, i.e.; until the expiry of the month of March 1992.

In the affidavit-in-opposition it has been stated that upon an accounting being taken for the current financial year, i.e. 1992-1993, not more than a sum of Rs. 1,94,355 would be found to be due from the company to the petitioning creditor. To that extent, therefore, there is an, admission, but Mr. Mitter for the company has submitted that if the larger and the more substantial part of the claimed debt is disputed, then a winding up application would be inappropriate even if there is a portion of the claim admitted by the company. I accept that proposition as a correct one in law.

It is also stated in the affidavit-in-opposition that the purchaser, i.e., the company, would have to satisfy themselves about the quantity and quality of the goods at the time of delivery.

The company has gone to the extent of asserting that the goods under the five disputed bills were not supplied at all. The defence of the company is that no part of these five bills would ever be payable. It is important to realise the nature of defence because the same automatically excludes the other usual defences taken in such situations, i.e., those of shortage of weight pr of some defect in quality. That is not the defence of the company, it is a total defence of total non-receipt.

On the basis of the affidavit-in-opposition and the reply to the statutory notice it is again an admitted position on the part of the company that the disputed bills were contemporaneously received. In the answer to the statutory notice the company did not make out the case that these bills were returned upon receipt, but such a case was ought to be made out for the first time in the affidavit-in-opposition.

Also in the answer to the statutory notice the company referred to writing of three letters on its behalf during the all important period of April-May 1992, when the five bills were made out and sent and mentioned the dates of those letters as April 29, 1992, April 30, 1992 and May 13, 1992. Though the dates are so specifically mentioned these letters are conspicuous by their absence. Mr. Mitter did not even seek to produce copies during argument. The only possible inference, therefore, is that during the, latter part of April 1992 and the month of May 1992 the company received the bills but kept totally silent about those. Considering that the aggregate claim in those five bills would come to about Rs. 10 lakhs, such silence needs to be explained by the company. If false bills were being raised upon the company, they had a duty to protest to save their rights. There was no such protest to save their rights. There was no such protest and the alleged letters of the company can only be held to have never been written.

The bills of which demand is made in this application are all supported by signed challans. Two of the bills were signed by one Mukul Polley of the company. Three of the other bills were signed by one Mukherji of the company. The said Mukherji signed the undisputed bill for above Rs. 3 lakhs.

The company has raised no grievance about Mukherji. The company has however made out a case that the signatures put by Policy were improper and that disciplinary proceedings are being allegedly contemplated against Polley. However, the said some Polley had signed challans in relation to two other bills also of April 1992 which are not disputed and which have in fact been paid. These bills arc dated April 23 and 25, 1992. The case of the company that the said Polley was in the Accounts department of the company from April 1, 1992 is itself again unacceptable because subsequent,, signatures of Polley appear, on challans of the two bills which are undisputed by the company. The said same Polley also signed challans in respect of two other paid bills dated September 13 and 15, 1989.

It is quite true that in case some bona fide defence is raised by the company then a winding up application is a wholly inappropriate remedy. Indeed in such a case it has been termed as an abuse of the process of Court. Mr. Mitter correctly relied in this regard for support of the above proposition upon the case of Bengal Flying Club 1966 (2) C.L.J. 212 (218) inter alia and placed the second paragraph of the judgment in the case.

The other proposition in receiving winding up applications is that the Company Court shall dispel any unsubstantial smoke screen, if that is only what is being sought to be raised by the company to hide the debt from the eyes of the Court. Such disputes are not worth the name of a dispute. The doubts raised in argument about there being no weighment bridge records to support weight of the goods supplied, the doubts about Mukul Polley being an unauthorized signatory on the part of the company, the doubts about there being no genuine supplies at all borne out by genuine signatures on challans are only so-called disputes in the nature of the raising of a smoke screen.

The photocopies of signed challans sent under cover of the letter of the learned Advocate of the petitioning creditor were produced in Court by Mr. Mitter and that was examined on behalf of the petitioning creditor. The original signed challans were also produced in Court on the part of the petitioning creditor and those were examined on the part of the company. I permitted those examinations to be made, but on the basis of the papers I find no necessity of going into any further documents as the company''s disputes are not worth the name.

Mr. Mukherji correctly relied in this respect upon the famous dictum of Sir George Jessel M.R. in the case of Imperial Hydropathic Hotel 49 Law Times 147. There the illustrious Judge said:

It is not because a man says, ''I dispute the debt'' that makes it a disputed debt. He must give some reasonable ground....

Indeed here the company in the reply to the statutory notice, in the affidavit-in-opposition and in painstaking arguments before Court did repeatedly say that they dispute the five bills. But one would look in vain for any reasonable ground for such dispute. If reasonable grounds are wholly absent, then the debt remains undisputed in spite of raising of pretended disputes.

Another example of such a pretended dispute, or a thickening of the smoke screen would be an attempt by the company to enter into accounts as to the dues which were carried forward from the financial year ending on March 31, 1992. According to the company, they carried forward the debit of Rs. 28,000 and odd. According to the petitioning creditor it was Rs. 54,000 and odd, which was fully paid off. The company''s case was that Rs. 54,000 was paid not for liquidating the earlier year''s liabilities but as a loan. Again it is only a mala fide attempt to create confusion in regard to the five bills, the goods for which were obviously supplied and accepted but not paid for.

Nor is there any substance as to the dispute raised in regard to the claim for 18 % interest put forward in the statutory notice in regard to the unpaid price of goods.

There was no demur to any of the bills which mentioned 18 %, though it is possible that the company did not expressly agree to pay the same. Interest can also be awarded by the Court under the provisions of the Sale of Goods Act. Not permitting the winding up petition to be received in this case would be an injustice to the petitioning creditor and a refusal to him of a remedy which the law leaves open to it. The winding up petition shall be admitted. It shall be advertised once in the Statesman and once, in the Ananda Bazar. Such publication are to be issued within six weeks from date hereof. Publication in the ''Calcutta Gazette is'' dispensed with. The publication shall state that the winding up application shall be heard upon public notice on a date 12 weeks hence.

All parties and others concerned to act on a signed copy of this dictated order on the usual undertaking of the petitioning creditor.