A company cannot avoid winding-up by raising a frivolous or manufactured dispute.

S. K. ROY CHOWDHURY, J.

( 1 ) THIS is a winding-up petition which was presented on the 7th of January, 1980, and on the returnable date notice was directed to be served on the company along with a copy of the petition. The company appeared and took leave to file, an affidavit to show cause why the winding-up petition should not be admitted. The petitioning creditor also took leave to file an affidavit-in-reply.

( 2 ) THE petitioning-creditor's claim arises out of sale of C. I. Scrap (Skull) at agreed rate to the company which was received by the company on the 23rd of April, 1979, and the petitioning creditor submitted its bill on the 23rd of April, 1979, for the sum of Rs. 10,831,22. The said bill was accepted without any objection and the company also issued a receipted challan and weighment certificate in respect of the said goods and accepted the bill of the petitioning-creditor. Copies of the bill, the. weighment certificate and receipted challan are annexed to the petition and the originals were produced at the time of hearing before me. It is alleged by the petitioning-creditor that objection was never raised in respect of the said goods or the goods received by the company and in fact the petitioning-creditor's representative called on the company for payment of the bill on 5th of May, 1979, and the petitioning creditor's representative was requested to call for payment from time to time. The bill-cover was also produced from which it appears that various endorsements showing the dates on which the bill was presented for payment and the same was returned for re-presentation as would appear from the endorsement copy, which is at p. 10 of the petition, which appears as follows : " Please call for payment on 5-5-1979, 1-6-1979, 4-6-1979, 8-6-1979, 11-6-1979, 21-6-1979, 23-6-1979 and 20-7-1979. "

( 3 ) THEREFORE, it is quite clear that the goods were duly received by the company and the bill was made at the agreed rate. The weighment certificate, which is dated 21st of April, 1979, also shows that it is checked by somebody, which the petitioning-creditor states to be the representative of the company. Now, the goods which were sold and delivered by the petitioning-creditor to the company is cast iron skull. As the payments were not received injspite of repeated demands, the petitioning-creditor duly served a statutory notice dated the 22nd of August, 1979, under Section 434 of the Companies Act, 1956, for payment of the price of the said goods at Rs. 10,831 together with interest thereon. It now appears that the company received the said statutory notice on the 27th of August, 1979, and the company with a view to raise a dispute has caused a letter dated the 25th of August, 1979, which strangely appears to be a public holiday sent by registered post on the 27th of August, 1979, to the petitioning-creditor alleging rejection of the goods and on the ground that the goods were not C. I. Scarp (Skull) but slags of furnace. The said letter also refers to an alleged letter of the company dated 24th of April, 1979, which is now alleged to have been sent to the petitioning-creditor under certificate of posting wherein it is alleged that the goods were not according to specification but absolutely below standard and are nothing but slags of furnace and the petitioning-creditor was alleged to have been asked to remove the said goods.

( 4 ) NOW, the whole question in this matter appears to be as to whether the said letter could be in these circumstances a genuine letter or a letter brought into existence only to raise a dispute, if possible, at the hearing of this present application. It also appears from the endorsement on the record of this application that the petitioning-creditor could not serve the company at the initial stage and thereafter the company matter appeared on the 1st of February, 1980, and on the ground of non-service of the petition, the company took extension of time to file opposition. In this background the m

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