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IN THE HIGH COURT OF CALCUTTA
PINAKI CHANDRA GHOSE, MRINAL KANTI CHAUDHURI, JJ.
J.D. Casting and Forging Pvt. Ltd. - Appellant
Versus
Hanumandas Meghraj - Respondent
A.P.O. Nos. 26 and 107 of 2009 and C.P. No. 394 of 2000
Decided On : 04-04-2012
For the Appellant : S.N. Mukherjee and Mr. Ratnanko Banerjee.
For the Respondent: Debangshu Basak and Mr. Kumar Gupta.
A winding-up petition cannot be admitted if there is a bona fide dispute on substantial grounds, but the court will not entertain the petition if the documents relied upon by the company are found to be created for the purpose of putting up a defense.
Headnote:
COMPANY LAW - WINDING UP - PETITION - ADMISSION - DISHONORED CHEQUES - GENUINENESS OF DOCUMENTS - BONA FIDE DISPUTE - ADJUSTMENT OF ACCOUNTS - EQUITABLE SET OFF - FRAUD - SUPPRESSION OF MATERIAL FACTS.
Fact of the Case:
The respondent, a dealer of materials like pig iron and C.I. scrap, filed a winding-up petition against the appellant company for non-payment of dues. The appellant company issued cheques to the respondent, which were dishonored. The respondent issued notices under Section 138 of the Negotiable Instrument Act and Section 434 of the Companies Act, 1956. The appellant company claimed that the cheques were issued for future supplies and that there was a reciprocal supply of materials, which was denied by the respondent. The appellant company also alleged fraud and suppression of material facts by the respondent.
Finding of the Court:
The court found that the appellant company failed to raise a bona fide dispute on the basis of the material placed before the court. The court held that the documents relied upon by the appellant company were created for the purpose of putting up a defense of reciprocal supply of materials. The court also found that there was no acceptable explanation as to why the cheques were dishonored and that the plea of setting off the claim of the appellant company could not be accepted.
Issues: 1. Whether the appellant company raised a bona fide dispute to resist the claim of the respondent? 2. Whether the documents relied upon by the appellant company were genuine? 3. Whether there was a reciprocal supply of materials as claimed by the appellant company? 4. Whether the plea of setting off the claim of the appellant company was legally acceptable?
Ratio Decidendi: 1. A winding-up petition cannot be admitted if there is a bona fide dispute on substantial grounds. 2. The court will not entertain a winding-up petition if the documents relied upon by the company are found to be created for the purpose of putting up a defense. 3. The plea of reciprocal supply of materials cannot be accepted if there is no evidence to support such a claim. 4. The plea of setting off the claim of the appellant company cannot be accepted if there is no agreement for adjustment as alleged.
Final Decision: The court dismissed the appeal and directed the appellant company to pay off its dues to the extent of Rs. 43,09,848/- in 18 equal monthly installments. In default of payment of any one installment or the last one, the petition shall stand admitted.
Pinaki Chandra Ghose, J.
1. This appeal is directed against a Judgment and/or order dated 26th March, 2009 whereby the Hon'ble Single Judge was pleased to hold as follows:
Therefore, I find that the company is really unable to pay the dues as the cheques were dishonoured. There has been no payment admittedly thereof and as such criminal proceedings has been initiated. I hold that company is unable to pay the debts of the petitioning creditor to the extent of Rs. 43,09.848 being the amount covered by the said cheques. It is not possible for this court to adjudge pay ability of balance claim in the petition on account of interest without accurate accounting which is complex is nature. However, if the company pays this amount by eighteen equal monthly installments first of such installment shall be paid on or before 16th May 2009 and go on paying month by month on or before 16th of each succeeding month this petition will remain stayed permanently. In case of default in paying the first installment and the last installment or two intermediary installments the petition will stand admitted and in that case the petitioning-creditor shall make publication once in The Statesman an once in Sanmarg. Publication in Calcutta Gazette is dispensed with.
The facts of the case briefly are as follows:
The winding up petition was presented by the respondent against the appellant company claiming balance of price of goods sold and delivered by the respondent were remained unpaid.
2. The respondent carried on and still carries on as a dealer of materials like pig iron, C.I. Scrap and other related materials. On diverse dates in the year 1997 the appellant company placed orders upon the respondent for supply of pig iron, C.I. Scrap etc. The respondent duly effected such supply during April 1997 and October 1997. The challans showing the delivery of such goods were also placed before the Trial Court and the respondent raised its bills for such supplies and the appellant from time to time had made part payments in respect thereof.
3. It appears that such winding up petition was based on the claim of the respondent for a sum of Rs. 36.13 lakhs as principal amount was outstanding on account of such supply. It further appears that the respondent relied on confirmation of accounts which is also annexed to the paper book as on 31st March. 1998 and 31st March, 1999.
4. It further appears that the appellant issued cheque to the tune of Rs. 43.09.848 from time to time. On presentation, such cheques were dishonoured. Hence, the notice u/s 138 of the Negotiable Instrument Act was issued by the respondent and further notice u/s 434 of the Companies Act, 1956 was duly issued by the respondent and the appellant duly received the same.
5. However, it is the case of the appellant is that statutory notice dated 31st May 2000 was admittedly return with endorsement 'not claimed'. The appellant in its defence denied the outstanding dues of the respondent for a sum of Rs. 38 laks and it is the case of the appellant is that after adjustment of accounts a sum of Rs. 9,848 is only due and outstanding from the appellant company to the respondent.
6. It is the case of the appellant company is that cheques were issued not to liquidate the dues of the respondent but it has been claimed that the said cheques were issued only for future supplies to be made by the respondent to the appellant company. It is the case of the appellant that the advance cheques for a sum of Rs. 43 Lakhs all were handed over to the representative of the respondent after due receipts and vouchers were issued in respect of such cheques and all the vouchers were singed by an employee of respondent namely S.K. Jha and were duly stamped.
7. The further case of the appellant is that the purchase ledger of the appellant would show that the cheques were issued for future supplies. It is further stated on behalf of the appellant company that the adjustment of the accounts were duly brought to the notice of the
