$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on:
25. h July, 2017 Pronounced on:
4. h August, 2017 + CO.PET. 896/2016 NITYA ELECTROCONTROLS PVT. LTD. ........ Petitioner
Through : Mr.Rajesh Banati and Mr.Vikram Singh, Advocates. versus UNIQUE ENGINEERS PRIVATE LTD. ..... Respondent Through : Mr.Praveen Kr Singh, Mr.Utkarsh Singh and Mohammad Ziauddin Ahmad, Advocates. CORAM: HON'BLE MR. JUSTICE YOGESH KHANNA YOGESH KHANNA, J.
1. The respondent placed various purchase orders from time to time for supply of fan starter panel, control console panel, ventilation panel, main HVA panel and terrace panel. The petitioner supplied the material from time to time. The detail of 43 invoices starting from 17.08.2012 to October, 2013 are referred to in para 8 of the petition. The said invoices are duly acknowledged by issuance of C Forms. The respondent has been making part payments for the goods received as per details given in para 10 of petition. The respondent had paid a sum of ₹2,65,89,932/- against the total liability of ₹2,93,57,829/-; thus leaving a balance of ₹27,67,897/- as outstanding. The respondent also issued a cheque bearing No.615748 dated 15.03.2014 for ₹24,29,728/- for part payment, CO.PET. No.896 of 2016 Page 1 of 8 but was dishonoured for reasons ‘payment stopped by the drawer’. The payments later made were adjusted in the earlier invoices. The petitioner served the statutory notice dated 04.08.2016 claiming the balance of ₹27,67,897/- with interest @ 18% pa, but the respondent failed / neglected to make the payment. Hence, this petition.
2. Respondent in its reply has admitted the issuance of the purchase orders; invoices and part payments made, but alleges the petitioner did not supply the complete material against the purchase orders despite requests from time to time. The respondent admitted the amount of ₹2,65,89,932/-, paid against invoices of ₹2,93,57,829/- but denied any amount, much less of ₹27,67,897/- is outstanding. The respondent alleges that its debit notes worth ₹20,33,046/- towards short supply/ non- providing of the services have been ignored by the petitioner, as stated in para 9 of preliminary objections in its reply. It read as under:-
"“9. It is submitted that if the entire payments as mentioned herein above made by the respondent to the petitioner by way of debit notes amounting to Rs.15,00,000/- and deductions amounting to Rs.5,33,046.25 towards short supply are taken into account, it will be seen that the respondent has paid an amount of Rs.20,33,046/-(Rupees Twenty Lakhs Thirty Three Thousand Forty Six only) over and above the amount as admitted to be paid to the petitioner in the present petition. Thus, as per the accounts maintained by the respondent only an amount of Rs.7,34,851/- (Rupees Seven Lakhs Thirty Four Thousand Eight Hundred Fifty One Only) is outstanding and due and payable to the petitioner towards supplies made at different sites of the respondent and not Rs.27,67,897/- as alleged in the petition. A copy of the chart showing CO.PET. No.896 of 2016 Page 2 of 8 3. the details of the short supplies of materials made by the petitioner amounting to Rs.5,33,046/- is marked and enclosed herewith as Annexure R-2.” The respondent hence claim credit of ₹20,33,046/- towards the short supplies made at its different sites and admitted only an amount of `7,34,851 as payable; hence alleges the claim being a disputed debt the petition is not maintainable. The respondent relies upon its email dated 15.06.2016 which notes as under:-
"“With reference to the subject, the panels supplied by you at CPMF has some short material. The details of the same have been attached with this mail. As you are already aware that work at this it was stopped earlier but the work has resumed now and We have to do commissioning of these panels. Kindly supply the required short material on immediate basis so that commissioning can be done. With regards, Jitin Jindal” 4. With above email the respondent has attached details of handwritten debit notes on which a doubt is raised if could be a part of email dated 15.06.2016, hence alleged to be created. Nevertheless all debit notes are dated 31.03.2016, much after the supplies were made till Oct-Nov-2013. From Nov’ 2013 till email dated 15.06.2016 there is not even a letter or an email or any other correspondence made on behalf of respondent qua short supply of goods. The respondent further relies upon an annexure R-3 viz. a purchase order dated 10.07.2013 which contains a warranty clause – which read as under:-
"CO.PET. No.896 of 2016 Page 3 of 8 “Warranty: The material supplied by you shall be under your warranty for Any manufacturing defect, bad workmanship or quality for a Period of 15 months from the Date of supply or 12 month from the Date of commission. Whichever is earlier.” The respondent justify issuance of debit notes as late as on 31.03.2016 per the warranty clause above.
5. The reliance upon the warranty clause is misplaced as it relates only to quality of goods and not to short supply of material. Secondly even if we believe that it covers short supply then also such objection could have been raised within 15 months from 10.07.2013 which period end on 9th October 2015. Hence there was no occasion for the respondent to issue debit notes on 31.03.2016 and that too for short supply.
6. Since the respondent has failed to put on record any correspondence during the period from 17.08.2012 till 31.07.2013 or within 15 months after 10.07.2013 qua any alleged short supply, the plea of respondent appears to be an afterthought. Sending of debit notes after two and a half year of supplies to stall just payments has no meaning at all.
7. Section 41 and section 42 of the Sales of Goods Act gives a right to purchaser to inspect the goods before accepting it and if he does not raise any objection qua its quality or of short supply within a reasonable time the seller shall be deemed to have accepted the goods without demur. Reasonable time is a question of fact, per Section 63 of the Sales of Goods Act, which cannot be so long as claimed by the respondent. CO.PET. No.896 of 2016 Page 4 of 8 8. In Lohmann Rausher Gmbh v. Medisphere Marketing Pvt. Ltd. 117(2004) DLT95the court observed :-
"“22. Undisputably, goods under first invoice were received in the month of May, 2000 and under the second invoice in the month of September, 2000. Defendant, on receipt of the goods, did not indicate to the plaintiff that the goods were defective till as late as 31.12.2001. This was when the plaintiff had served upon the defendant a legal notice in the month of October, 2001. x x x 29. The long gap after which goods were ostensibly rejected on the premise that they were defective/sub- standard is clearly fatal to the projected defense in the context of statutory law being Section 41 and 42 of the Sale of Goods Act.” Learned counsel for respondent has referred to various judgments 9. vis; M. Sampth vs. A.K.M.N. Cylinders Pvt Ltd: (1999) 98 Company Cases 777 (CLB); Pradeshiya Industrial and Investment Corporation of UP vs. North India Petrochemicals Limited & Another (1994) 3 SCC348 and Goel Brothers and Company Private Limited vs Yashodan Chit Fund Ltd 1979 Mh. LJ607to highlight the company petition is not maintainable in case of a disputed debt. There is no doubt to such preposition of law.
10. However in Indo Alusys Industries Ltd vs M/s Assotech Contract (India) Ltd 160 (2009) DLT752this Court held as under:-
"“19. It is well settled that a bogus or a sham dispute, contrived or concocted as a defence for a genuine and bona fide claim by a creditor, is not permitted to be utilised as a defence to a winding up action. It has been held above that there is no substantial defence to the petition. I have also CO.PET. No.896 of 2016 Page 5 of 8 to the respondent the creditor. In found that a debt is prima facie due and payable by this background, the binding principles laid down by the Apex Court in AIR2005SC4175Mediqup Systems Private Limited Vs. Promixa Medical System G.M.B.H. and (1994) 2 Comp. LJ50(SC) Pradeshiya Industrial & Investment Corporation of Uttar Pradesh Vs. North India Petro-Chemical Limited & Arn. relied upon by the respondent, have no application to the present case.” 11. In V.V. Enterprises vs. Rungta Irrigation Ltd 209 (2014) DLT748Coordinate Bench of this Court observed as under:-
"“13. The disputes raised by the respondent are a mere ruse to avoid paying the amount due to the petitioner. In this view, the respondent is deemed to be unable to pay its debts on account of its failure the petitioner.” the debt owed to discharge to 12. In Olam Agro India Limited vs. Mother V Impex P. Ltd 210 (2014) DLT365it was held as under:-
"“20. The claim that the respondent had suffered losses, which are liable to be compensated by the petitioner is also not a bonafide dispute. The respondent had made no protest at the material time i.e. the Diwali season of 2010. This indicates that there was no dispute between the parties on this account. The disputes sought to raise in November, 2011 were after the cheques issued by the respondent had been dishonoured and the petitioner had initiation of proceedings under the Negotiable Instrument Act, 1881. In the event that the respondent was aggrieved by any delay in supply of goods, the contemporaneous correspondence in 2010 and taken steps for CO.PET. No.896 of 2016 Page 6 of 8 even in early part of 2011 would indicate the same. In absence of any dispute at the material time, the contention that the debt claimed by the petitioner is disputed cannot be accepted.” 13. The Apex Court in M/s Madhusudan Gordhandas & Company vs. Madhu Woollen Industries Pvt Limited 1971(3) SCC632held as under:-
"(i) Where the debt is undisputed, the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt. (ii) Where, however, there is no doubt that the company owes the creditor a debt entitling him to a winding-up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantity the debt precisely. (iii) The principles on which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends.” 14. The facts reveal the respondent is raising this frivolous issue after a period of 2 years of supply of material only to wriggle out of its liability to pay the balance due to the petitioner and hence has neglected to pay without any cogent, substantial or genuine cause. It is no defence to say that the respondent has ability to pay but has choosen not to pay or that it had a lesser liability to pay.
15. In view of the above, this petition is admitted. CO.PET. No.896 of 2016 Page 7 of 8 16. Citation be published in the "Statesman" (English edition) and "Jansatta" (Hindi edition) in accordance with Company (Court) Rules, 1959.
17. However, publication of the citation and appointment of the provisional liquidator is deferred and one opportunity is given to the respondent company to pay the amount found already due and payable to the petitioner with interest at the rate of 8% per annum with effect from 14.08.2016 when the statutory notice was served on the respondent company. The amount be paid within one month failing which the petitioner shall be entitled to publish the citation and apply for appointment of the Provisional Liquidator.
18. List for further directions on 15.11.2017. YOGESH KHANNA, J AUGUST04 2017 M CO.PET. No.896 of 2016 Page 8 of 8