TMI Blog1970 (4) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... as paid to the respondent-company, that the respondent-company supplied some defective machinery, that subsequently the respondent-company by a letter dated 29th August, 1967, acknowledged liability to the extent of Rs. 2,60,000 and that, in spite of demand, the respondent-company failed and neglected to pay the said amount. The respondent-company admits the contract, but denies its liability for any amount. According to the respondent-company, there was a subsisting dispute between the parties under the contract, and if accounts are verified, no amount would be found due to the petitioner-company. It is also its case that the petitioner-company committed default and repudiated the contract and that, therefore, in view of this dispute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cancelled. It is further provided in exhibit P-1 that the rest of the machinery to be supplied under the contract, exhibit R-1, had been already supplied by the respondent-company and that the petitioner-company had accepted the same in terms of the contract. It is also declared that after adjusting all the accounts between the parties, a sum of Rs. 2,60,000 was payable by the respondent to the petitioner inclusive of interest and that the respondent shall pay interest on that amount at 9 per cent, per annum. Exhibit P-1 also refers to the placing of an order by the petitioner-company with the respondent-company. With regard to that order, exhibit P-1 provides that the respondent-company shall commence the supply before a particular date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court. During the pendency of these proceedings, the petitioner-company has come forward with this petition for winding up the respondent-company. Mr. Raman, appearing for the petitioner-company, relying upon the terms of exhibit P-1, contended that under the said document, the respondent-company unconditionally accepted its liability for the sum of Rs. 2,60,000 with further liability to pay interest at 9 per cent, per annum thereon and that the objections raised by the respondent-company before the Calcutta High Court are frivolous and untenable and that, therefore, there is no room to hold that the dispute raised by the respondent-company is bona fide . On the other hand, it is contended on behalf of the respondent-company that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only for supply of machinery but also for erection. In connection with such erection, the parties stipulated certain terms in exhibit R-1. On this aspect,, exhibit P-1 is silent. In the absence of an express recital in exhibit P-1 to the effect that the contract, exhibit R-1, was completely performed or cancelled, the matter has got to be examined as to whether any more rights and obligations of the parties have to be considered in terms of exhibit P-1. The question whether a dispute is bona fide or not depends upon the circumstances of each case. The test is whether the dispute is raised only to avoid payment of the debt and not based on a substantial ground. Bona fide dispute, means that the dispute is based on a substantial gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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