9911796707
TMI Blog2012 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponds to Euro 351174.41. It is stated that the petitioner is a leading manufacturer of specialised application heavy duty concrete pumps and components thereof. Thus, the respondent Company has been, during course of its business in India, placing orders for the supply of various components required for the production of the aforesaid pumps and such orders are placed on the petitioner from time to time. Pursuant to the placement of such orders, the petitioner has supplied to the respondent Company various components and thereafter raised invoices for payment towards the same. 3. A summary of invoices and the credit notes are annexed as Annexure E to the petition and, thereafter, it is stated that the respondent Company failed to make payment for such goods. There were various letters/reminders, details of which are mentioned in paragraph 10 of this petition. 4. In paragraph 11 of the petition, it is stated that the supplies were effected in the year 2004 and 2005, but the Company has not raised any issue either with regard to the supply or with regard to any shortages or deficiencies in the goods. Since the amounts were not paid, what the petitioner stated in paragraph 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Copies of the two letters dated 17/3/2006 are hereto annexed and marked as "ANNEXURE I" collectively to this Petition. (15) It is relevant to point out that the said two letters dated 17/3/2006 were duly replied by the Petitioners vide their letters dated 19/4/2006 categorically refuting all the allegations made by the said Company. Copies of the said letters dated 19/4/2006 issued by the petitioner to the said Company are hereto annexed and marked as "ANNEXURE J"" 6. It is, thus, stated that the four High Pressure Core Pumps and the components of SKD sets of BSF 20.07 were supplied by the petitioner to the said Company way back in the years 2004 and 2005, and for a period of two years, therefore, no grievance was made with regard to the alleged non-performance of the said pumps or the alleged short supply of the components. There is not a single correspondence emanating from the said Company, wherein such allegations were earlier notified to the Petitioner. Therefore, once the pumps have been beneficially used and without any complaint from the customers, the letters dated 17th March, 2006 have been issued with the sole purpose of disputing the debts which are, otherwise, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d differences between the parties as referred to in the petition and the claim of the petitioner allegedly on account of some supplies made, is being projected in isolation. There is a clear link between the obligations and the commitments under these agreements and once the respondent has alleged that the petitioner has committed default, then, it is not possible to delink the issues raised in the petition from the breaches on the part of the petitioner. It is submitted that the petitioner was aware of the said allegations with regard to the breaches and the correspondence is extensively referred to. It is then stated that the petitioner is aware of the same, as would be clear from the perusal of paragraphs 13 to 15 which have been reproduced above. After stating thus, it is then contended with regard to the specific supplies which are subject-matter of this petition as well, what has been overlooked is that the production, manufacture, sale and supply of respondent company's products was as per JVA-1 till 4th November, 2004 and thereafter, as per JVA-2 and as per LPA. In view thereof, certain components, spares, accessories, tools in respect of the respondent Company's products w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance being made with the statutory prerequisites. He submits that the Company has accepted the goods without any demur or protest. It is his submission that the receipt of the invoices has also not been disputed. Once the correctness of the invoices has not been disputed, but the demand has not been complied with, then, the requisite presumption must be raised, more so, when the defences raised are not bonafide, but in the nature of an afterthought. Shri Dessai submits that the respondents, while receiving the supplies of the goods/components, never raised any issue or objection and never intimated the petitioner as regards any shortages or deficiencies. The respondent never objected the twelve communications/reminders for payment which have been duly received. In fact, the liability is admitted. This is a case where the liability is admitted, in writing, inasmuch as the balance sheets of the respondent Company for the relevant year have under the heading "sundry creditors" notified the liability, the sums due and payable to the petitioner. This is not a case where any other issue and particularly with regard to the compliance of JVA and LPA can be raised by the respondent. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eling Commercial Co. Ltd. [1977] 47 Comp. Cas. 15 (Cal.). (13) Garodia Hardware Store v. Nimodia Plantations & Industries (P.) Ltd. [1999] 98 Comp. Cas. 636 (Gauhati). 14. On the other hand, Mr. Nadkarni, learned Senior Counsel appearing on behalf of the respondent, firstly, submitted that the petition for winding up cannot be entertained unless there is complete compliance with Section 434(1) of the Companies Act, 1956. That provision mandates that the demand, in writing, has been raised and served or delivered at the registered office of the respondent Company. It is only upon receipt of such a notice and if there is no compliance therewith in the form of demand being honoured or the amount paid or debt due is compounded it to the reasonable satisfaction of the creditor. In the instant case, the notice of demand is addressed to the factory and not to the registered office of the respondent. If such is the notice of demand and it does not comply with the basic and fundamental requirement for institution of the winding up petition, then, this company petition cannot be entertained. This is not just a technical plea, but a substantial one, according to Mr. Nadkarni. He has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shortages and the respondent has challenged the version of the petitioner. In answer to the argument of Shri Dessai that if this was the case, the respondent should have raised an issue against the petitioner by approaching a Court of law, what is argued by Mr. Nadkarni is that the matter cannot be seen from this angle inasmuch as it is the petitioner who has filed the petition, seeking winding up and it must be able to demonstrate that the dispute or the defence is not substantial or bonafide. The respondent's inaction cannot be only governing and relevant factor. If independent of all this and in answer to the claim the defence is raised, and it is pointed out that the dispute is substantial and cannot be said to be one raised purely as an afterthought, or moonshine, then, the petition for winding up cannot be entertained as it is well settled law that it is not a proceeding for recovery of money, but seeking winding up of the company. For all these reasons, it is submitted by him that this petition should be dismissed. 16. Mr. Nadkarni has relied upon the following decisions in support of his contention : 1. Madhusudan Gordhandas & Co. v. Madhu Wollen Industries ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company. On the own showing of the petitioner, this notice is sent at the factory address. True it is that it has been duly replied by the respondent by pointing out that there is a subsisting JVA dated 4th November, 2011 and the LPA dated 19th December, 1997 under which the obligations are reciprocal. However, the petitioner has backed out from the same. The JVA is purported to be terminated, so also the LPA. This termination is termed as wrongful and bad in law, so also invalid. Reference is made to the letter dated 20th March, 2006, a copy of which is annexed to the petition and besides this, in relation to the termination what has been stated is that on 17th March, 2006, the respondent complained about non-performance of high pressure core pumps and pointed out that the supply of certain components was short and amounts were claimed for that loss with interest. It is stated that the respondent has a counter claim of Euro 5,65,700. The allegation and the statement in the notice that the goods have been supplied in terms of the orders placed, has been denied and it stated that they are not so supplied, and, therefore, the amount claimed is not due and payable. 20. The letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided on the touchstone of bonafides of the defence of the Company. 21. It is with that intent that I have proceeded to peruse the affidavits filed. 22. The affidavits that are placed before this Court by respondent No. 1, after referring to the obligations under the JVA and the LPA, have referred to the correspondence. If one peruses the defence, what emerges is that these JAV and LPA are to give effect to the partnership of both entities. What the petitioner has done is to supply pumps under the invoices on the company forwarding prior purchase orders. However, the respondent has stated that the pumps supplied were not suitable for the Indian market. They were improved upon with the assistance and the technical know-how provided by the respondent. As to how this was achieved, is set out and it is stated that the substantial growth has benefited both the entities. It is not as if the relation was seen as that of debtor and creditor in the ordinary sense. If the assurances and commitments in the JVA-1 and JVA-2 relate to the provision of funding and supplying of components, then, one fails to understand as to how the petitioner's argument that these matters must de-linked or have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that according to the notice of termination, served by the petitioner, the period under the same was over by 30th September, 2005 and, accordingly, the petitioner is not bound to deliver any more items under the LPA. Now, it is very clear that this is the petitioner's communication and which does not find any reference in the correspondence referred to in the petition nor in the notice of demand. If there was substance in the contention of Shri Dessai that the transactions must be looked at independent of the obligations of the parties under the JVA and the LPA, then, it was for him to explain as to how this tele-fax makes a reference to the LPA. However, not only there is no satisfactory answer, but has no relation to the letter dated 29th October, 2005, which is addressed by the respondent to the petitioner in which reference is substantially made to the Orders No. IMP 73 to IMP 77 and short supplied items with quantity and the defence that is raised is that the payment terms were sought to be changed unilaterally. The correct payment terms were 60 days after Bill of Lading and if the change is unilateral, yet, the respondent seeks confirmation of the dispatch of short supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the affidavit-in-reply. What is interesting to note is that the petitioner in para 5, stated to be its parawise reply to the affidavit of the respondents, states that it encountered unforeseen hardship and difficulty in performance of JVA-2 and in accordance with the relevant terms of JVA-2, the petitioner, therefore, addressed such hardships and difficulties to other parties of the JVA-2 and also suggested certain measures to remove them. Accordingly, the petitioner addressed communication dated 25th May, 2005 to Mr. Bhadbade, a copy where of has been annexed with the reply. In any event, said JVA-2 did not take effect in its entirety as number of steps which were required to be taken by both the parties in terms thereof, were not complied with by said Mr. Bhadbade and Mr. Ashok Dikshit. It is stated that these facts are duly confirmed by these persons by communication dated 26th July, 2006. Moreover, certain disputes and differences resulted in withdrawal of the petitioner from JVA-2 and the termination of LPA and in fact such disputes and differences have since been referred to arbitration and the matters are presently subjudice. Even these allegations have no significa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the liability, then when in affidavit in reply short supply of goods or non-supply thereof is an issue raised, in rejoinder the petitioner was not required to plead that in so far as Order No. IMP 66 is concerned, the reason that the delay, if any in shipment of this consignment was due to sourcing difficulties mainly on account of hardened concrete cylinders, which at that time had very long delivery time. Then to say that admittedly the products were received and appropriated without any objection or reservation and, therefore, the company cannot have any legitimate grievance is, by itself, something which would require the petitioner to demonstrate as to when the supplies were required to be made, when they were indeed made and how and for what period the amount came to be not remitted or that the delay is waived by the respondent. Therefore, it must make payment without any reservation. 26. This may be a case in relation to Order No. IMP 66, but with regard to orders No. IMP 73 to IMP 75, equally the very same problem of sourcing of certain parts, is pointed out in para 4(xxi). The fax message dated 21st October, 2005 is explained by the petitioner by pointing out tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in bonafides or being not substantial in nature. 28. Once, such is the conclusion reached, then, it is well settled that a winding up petition cannot be entertained and requires no reference to all the judgments or decisions cited, because it is not a mode of recovery. Once it is not a mode of recovery and the petitioner will have to resort to other remedies available in law, then, a further conclusion is inevitable that the petition cannot be entertained. 29. The decisions that have been brought to my notice by the parties and specially by the petitioner, must be noticed only in the context of the facts that emerge on the record of those cases. 30. While a strong reliance is placed on the decision of the Supreme Court in the case of IBA Health (India) (P.) Ltd. v. Info-drive System SDN. BHD [2010] 104 SCL 367/8 taxmann.com 1 (SC), which is stated to be the final word, even by the test laid down in that decision what emerges is that it is a reiteration of the principles laid down in the case of Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 (SC) and in the case of Madhusudan Gordhandas & Co. (supra). It is not that I have reached the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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