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2010 Supreme(Cal) 1228
High Court Of Calcutta
Pinaki Chandra Ghose, Asim Kumar Ray, JJ.
Ram Krishna Mukherjee - Appellant
Versus
Ankit Metal – Respondent
A.P.O. No. 305 of 2009 A.C.O. No. 97 of 2009 CP. No. 334 of 2008
Decided on : Oct 04, 2010
Ratnanko Banerjee, Tarun Aich, S.B.Mukherji, D.Basak, D.N.Sharma, Aniruddha Roy, Ratnesh Kumar Rai
A winding-up order will not be made on a creditor's petition if it would not benefit him or the company's creditors generally.
Headnote:
COMPANY WINDING-UP - SECTION 434 OF THE COMPANIES ACT, 1956 - STAY OF WINDING-UP PROCEEDINGS - DISPUTE OVER QUALITY OF GOODS SUPPLIED - BONA FIDE DEFENCE - WISHES OF CREDITORS - COURT'S DISCRETION.
Fact of the Case:
The petitioning creditor, a coal supplier, filed a winding-up petition against the company, alleging that the company failed to pay for the coal supplied. The company, in its affidavit-in-opposition, claimed that the coal was of poor quality and had been rejected. The company also contended that it had settled the matter with the petitioning creditor through his agent.
Finding of the Court:
The court found that the company had raised a bona fide defence to the claim of the petitioning creditor. The court also considered the wishes of the creditors and found that they were opposed to a winding-up order. The court held that the order passed by the Hon'ble First Court staying the winding-up proceedings did not suffer from any illegality or irregularity and, accordingly, dismissed the appeal.
Issues: 1. Whether the company had raised a bona fide defence to the claim of the petitioning creditor? 2. Whether the wishes of the creditors were opposed to a winding-up order? 3. Whether the order passed by the Hon'ble First Court staying the winding-up proceedings was illegal or irregular?
Ratio Decidendi: 1. The court applied the test laid down in the case of M/s. Madhusudan Gordhandas and Company (supra) to determine whether the defence raised by the company was bona fide. The court held that the company had adduced prima facie proof of the facts on which its defence depended and that the defence was likely to succeed in point of law. 2. The court considered the wishes of the creditors and found that they were opposed to a winding-up order. The court held that the wishes of the creditors were reasonable and that there were matters which should be inquired into and investigated if a winding-up order was made. 3. The court held that the order passed by the Hon'ble First Court staying the winding-up proceedings did not suffer from any illegality or irregularity. The court held that the order was passed in accordance with the law and that there was no reason to interfere with the order.
Final Decision: The court dismissed the appeal and affirmed the order passed by the Hon'ble First Court staying the winding-up proceedings.
1. Ghose, J. This appeal is directed against an order dated 7th September, 2009 passed by the Hon'ble First Court in a winding-up petition when His Lordship was pleased to finally stay the winding-up proceeding permanently and unconditionally. However, liberty was given to the petitioning creditor that the said order will in no way prevent him to initiate any other appropriate proceeding including a Civil Suit.
2. BEING aggrieved, this appeal has been filed from the said order dated 7th September, 2009 in Company Petition No. 334 of 2006.
The facts of the case briefly are as follows :-
The case of the petitioning creditor/appellant herein is that the petitioning creditor sold and delivered to the company a total quantity of 3683.640 Metric Ton (one rake of 58 boxes) of Grade E coal contained in 56 BOXN. The said goods were delivered at Rukni South Eastern Railway Siding. The value of the said coal is amounting to Rs. 87,30,227/- and further interest thereon at the agreed rate of 18% per annum. It is further stated that the company was interested to purchase the said coal and the offer letters of the petitioner were duly received and accepted by and on behalf of the company resulting to delivery of the said goods on 16th March 2008 duly endorsed on a Railway Receipt (R.R.) dated 15th March, 2008 in favour of the company/respondent herein.
3. THE petitioning creditor, thereafter, made several demands from the company for payment of the said coal and on 8th July, 2008 in reply to the letter of the petitioning creditor received a letter dated 10th July, 2008 from the company inter alia alleging that the company had communicated to one Ashok Kumar Kathotia, the alleged representative of the petitioner that the company had rejected the said coal supplied by the petitioner to the company due to its alleged inferior quality. Further the company's addressed letter to one Ashok Kumar Kathotia dated 29th March 2008 and the rejection Notice dated 28th March, 2008 was addressed to said Ashok Kumar Kathotia and the purchase order dated 8th March, 2008 was also addressed to Ashok Kumar Kathotia. But, it is the case of the petitioning creditor/the appellant herein is that the said Ashok Kumar Kathotia had no role to play in this matter and, therefore, the company tried to rely upon all the documents which were manufactured. In these circumstances, notice was served on the company for realization of the said amount under Section 434 of the Companies Act, 1956 which was duly replied on behalf of the company and the petitioning creditor and, thereafter, filed his winding-up petition.
4. IN the affidavit-in-opposition the plea was taken is that on or about 8th March, 2008 the company, upon negotiation between the company and Ashok Kumar Kathotia, an agent of the petitioning creditor issued purchase order for 2370 MT of coal. Accordingly, coal were supplied on or about 16th March, 2008. Since the coal was poor quality and not as per the order specification, that was rejected. This was duly intimated to Ashok Kumar Kathotia by a letter dated 29th March, 2008 with a Rejection Note dated 28th March, 2008 and further requested him to take back the materials from the Company's plant. On 8th July, 2008 and 9th July, 2008, the company was surprised to receive letters from the petitioning creditor claiming payment against coal which was supplied to the company.
The company had rejected the coal and settled the matter with the petitioning creditor through his agent, Mr. Ashok Kumar Kathotia but, further, the point has taken that as the coal was rejected due to poor quality and duly returned, the company is not liable to pay any sum against the same.
5. DISPUTES between the parties, thereafter, came up before the Court and the Court after considering the facts of the case passed the impugned order.
6. IT appears further that the Court directed Ashok Kumar Kathotia to file an affidavit and such affidavit was filed before the Court by Ashok Kumar Kath
