TMI Blog1998 (12) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... their letter dated 2-3-1996. According to the petitioners, there was also an earlier due of Rs. 10,000 in respect of some supply made on 12-6-1995. Their contention is that this amount was settled by cheque dated 29-4-1997 which was almost two years after the amount was due and they further contend that after repeated reminders, in respect of the payment for the consignment delivered on 28-10-1995, the respondents issued a cheque for Rs. 10,000 on 25-9-1997 towards part payment. This cheque was dishonoured with the bank endorsement stating "insufficient funds". According to the petitioners, they sent a statutory notice dated 30-9-1997 to the respondents to which they gave what the petitioner describes as a very strange reply dated 7-10-1997. The two relevant paragraphs of the reply are reproduced below because both the learned advocates have had something to say with regard to the contents of this reply : "We have issued cheque for Rs. 10,000 as advance for the supply of 100 ml. plain bottles. They have not supplied hence we have not honoured the same. Further they have supplied some printed containers which is not usable. We have rejected and informed by Regd. Post. Now they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd if he is able to demonstrate that there has been a history of similar conduct even on an earlier occasion that it is a circumstance which goes heavily against the respondents vis-a-vis their capacity to honour their commercial commitments or in other words to meet their debts and liabilities. According to the petitioners learned counsel the defects that were pleaded after considerable lapse of time were nothing short of an eye-wash in order to avoid payment and he submits that the petitioners refuted the position immediately on receipt of that letter and that thereafter the respondents not only kept quiet but that they retained the goods with them. The learned counsel relies heavily on the fact that a cheque for Rs. 10,000 was issued against part payment and that even this small cheque came to be dishonoured due to insufficiency of funds. Lastly, his submission is that apart from merely repeating the earlier contention, namely, that the goods are defective and that the respondents are not liable to pay for the same, even in the reply filed before this Court that the respondents have not come forward with any valid material as far as facts are concerned that would justify thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmore, it is very significant that the cheque in question came to be dishonoured due to insufficiency of funds. If the cheque had been issued as advance against some further order and the petitioners had failed to honour that commitment then I could have understood a situation whereby the respondents had stopped payment of the cheque after notice to the petitioners and there would have been some documents and some record to support this plea. As the record stands, it is very clear that the contention taken up is not only an after thought but that it is an impossible attempt to cover up a situation whereby the respondents could not even honour a cheque for Rs. 10,000. The inability to honour the cheque is compounded by the fact that a patently false defence has been taken up by pleading that it related to some subsequent order. What establishes the utter falsity of the defence is the fact that the Respondents have themselves offered to honour the cheque which conclusively indicates that it was a part payment. As matter, stand, there can be no doubt about the fact that the petitioners are absolutely justified in contending that the cheque was issued against payments of the outstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplaint and the respondents have accepted that position thereafter. No further steps were taken by them and they have coolly retained the goods at all points of time. I do not dispute the fact that when the statutory notice was sent more than one year later that the respondents have once again pleaded the so-called defects. The question is as to whether on the basis of this slender material any Court could attach credibility to the defence on these facts and I am constrained to observe that it would be impossible to hold that the respondents have made out even a prima facie defence worthy of even the least credibility. This then is the factual position and having regard to the long lapse of time and the fact that even the cheque given for a meagre amount of Rs. 10,000 was dishonoured and no attempt was made to pay up that amount, it is clear evidence of the fact that the respondents are unable to discharge their debts and that they have given sufficient cause for an action of winding up. 7. At the hearing today, the learned counsel Mr. Raghavan cited a number of decisions and he took me in detail through the observations of the various Courts particularly the Supreme Court an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affairs. Mr. Raghavan did emphasise one point whereby he submitted that it is not as though this is a company which is devoid of assets and he pointed out to me that for the two years in question the net current assets were of the orders of approximately Rs. 54 lakhs and Rs. 57 lakhs. That is not the real income because this document does not indicate anything with regard to the turnover and financial health of the company and to my mind, therefore, not of much of reliance can be placed on this document. 8. The general submission advanced by the learned counsel was that in a case of the present type, the Court would have to assess as to whether an order of winding up is justified on an over all consideration and the learned counsel put forward the familiar example of a situation whereby a disputing creditor may claim winding up of a perfectly healthy company merely because that creditor has not received his money. In other words, he pointed out to me that the Courts have been deprecating the use of this machinery for purposes of recovery of debts and that is the reason why whenever a defence for non-payment is pleaded and found to be genuine that the Court will refuse to wind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an offer to be made particularly on the dismal record of the present case. I have referred repeatedly to the time factor, the date of the transactions when the liabilities arose and how much of time has elapsed since that particular date and having regard to these facts, I see no reason why at this late point of time such an offer should be accepted particularly when the cause of action has virtually reached a stage of conclusion. Is a Court obliged, virtually at the zero hour, to accept such a belated offer ? The answer is an emphatic no, because a party who pleads a false and sham defence, litigates on merits, loses and then tries to play with the Court by making a hopelessly belated offer deserves no indulgence. It is well settled law that a Court will only permit corrective action if it is bona fide, i.e., carried out at the earliest and not latest point of time. Having regard to this position, it is directed that the petitioners shall advertise in the local edition of the Times of India not earlier than 8-1-1999 and file a copy of the advertisement with the office of this Court. The next returnable date in this case shall be 10-2-1999 when the petition to be relisted for fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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