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M/s Hetero Drugs Limited, Hyderabad Versus M/s Nectar Lifesciences Limited

2016 (4) TMI 434 - PUNJAB AND HARYANA HIGH COURT

Winding up petition - Held that:- The present case does not fall within the parameters of admitted liability enabling the Court to pass the winding up order, much less admit the petition as the defence raised by the respondent company is bonafide and not malafide. The reproduction of the e-mails, ibid, leaves no manner of doubt that the respondent company had placed the Purchase Order vis-a-vis CP 6 MT at the rate of ₹ 12,250/-, Kg. whereas the petitioner company had offered the rate at th .....

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ute that prior to the placing of the Purchase Order dated 18.8.2010, the respondent company had placed the Purchase Order with regard to CT and had been supplied the material worth ₹ 3,20,64,210/-, but owing to the non-supply of CP, the company had purchased the material from other source at a higher price, for which the civil suit is pending and the same shall be proved in those proceedings and the petitioner company shall have a right to rebut the same.

In view, at this stage, .....

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ut by the Hon'ble Supreme Court in Madhusudan Gordhandas and Co. Versus Madhu Woolen Industries Private Ltd., AIR 1971 (SC) 2600. In the said judgment, it has been held that where a debt is bonafidely disputed and defence is substantial one, the Court will not wind up the company but where the defence is malafide, the Court will not act upon a defence that the company has the ability to pay the debt, but chooses not to pay that particular debt. In such circumstances, the winding up order is .....

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gs as per their balance sheet. It has been stated that the respondent company, vide Purchase Order bearing No.NLL/R.M./U02/086/2010-2011 dated 10.7.2010 (Annexure P-1) had placed an order with the petitioner company for supply of 3000 Kgs. @ ₹ 9500/- per unit (kg.) totalling to ₹ 2,85,00,000/- of Cefixime Trihydrate (for short CT ). In pursuance to the order placed by the respondent company, the petitioner company supplied the requisite material against different invoices (Annexures .....

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ad been in correspondence with the respondent company through e-mails and phone calls demanding the payment of the outstanding amount, copy of which has been annexed as Annexure P-11 collectively, but no payment had been received, which necessitated to send a legal notice dated 12.10.2011 (Annexure P-12). The said legal notice was replied by the respondent company vide letter dated 31.10.2011 (Annexure P-13), wherein the respondent company linked the issue of outstanding amount to the alleged no .....

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d by seeking forfeiture/setting-off, the present case squarely falls within the parameters of Section 434 of the Companies Act, 1956 (for short 1956 Act ). There was no concluded contract between the petitioner company and the respondent company for supply of CP product. It has been stated that prior to sending of the legal notice, respondent company had sent a legal notice dated 28.9.2010 (Annexure P-14) stating therein that it has faced the loss to the tune of ₹ 10.00 crores on account o .....

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e than 3 MT of CP limiting to 1 MT per month and despite that, respondent company had placed a Purchase Order for 6 MT of CP vide e-mail dated 18.8.2010 (Annexure P-16), thus, the petitioner company never assured regarding the supply of the said material. It is in these circumstances, the company petition, aforementioned, was filed. Upon notice, the respondent company appeared and filed a detailed reply taking various preliminary objections, vis-a-vis maintainability of the petition under Sectio .....

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espondent company filed a civil suit on 15.12.2011 (Annexure R-1) and the present petition is a counter blast to the legal notice and, thus, as per the settled law, winding up petition cannot be entertained where the alleged debt is disputed. It has also been stated that the petitioner company has withheld the factum of filing of the suit as the winding up petition was filed on 22.2.2012 and the suit had been filed on 19.12.2011. Notice of motion in the present petition was issued on 17.7.2013, .....

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12.10.2011 (Annexure P-11), the respondent company had admitted the liability of ₹ 3,20,64,210/- by alleging that it had suffered a loss of ₹ 3.30 crores and, therefore, the said amount has been adjusted/forfeited. For the sake of brevity, Para 16 of the legal notice (Annexure P-13) reads thus:- "16. That in the circumstances, my clients have adjusted/forfeited the sum of ₹ 3,20,64,210/- and the same is not payable to you. On the contrary, my clients have suffered a direc .....

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/- per Kg. was ever received from the respondent company and if yes, what was the reply sent and in compliance of the aforementioned order, an affidavit dated 21.3.2012 (at page 172 of the paper book) has been filed, wherein it has been stated that various e-mails dated 26.7.2010, 27.7.2010, 29.7.2010, 2.8.2010 and 10.8.2010 were exchanged between the petitioner company and the respondent company for supply of CP, where it was specifically mentioned that the price of the drug was @ ₹ 12,50 .....

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cable and the judgment cited supra would be applicable and the company petition be ordered to be admitted. Mr.Atul V.Sood, learned counsel appearing on behalf of the respondent company submits that the defence raised in the present petition is a bonafide as it is a case of set-off, inasmuch as that the respondent company vide e-mail dated 17.8.2010 issued a Purchase Order dated 16.8.2010 of 6 MT of CP @ ₹ 12,250/- per Kg., which was in pursuance to various correspondences exchanged between .....

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f brevity, contents of the letter dated 27.7.2010 and again letter date 27.7.2010 are reproduced herein below:- "Aarti Chauhan From: Renuka <renuka@heterodrugs.com.> To: Chetan Gulati <chetan.gulati@neclife.com>; Aarti Chauhan <aarti.chauhan@neclife.com>; Sandeep Chawan <sandeep@heterodrugs.com> Cc: Amit Ujagare <amit@heterodrugs.com> Sent: Tuesday, July 27, 2010 7:06 PM Subject: Re: inquiry To: Rs. Aarti chauhan'; sandeep@heterodrugs.com Cc: 'Chetan Gu .....

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ys Please confirm Regards "Chetan Gulati From: Renuka <renuka@heterodrugs.com.> To: Chetan Gulati <chetan.gulati@neclife.com>; Aarti Chauhan <aarti.chauhan@neclife.com>; Sandeep Chawan <sandeep@heterodrugs.com> Cc: Amit Ujagare <amit@heterodrugs.com> Sent: Tuesday, July 27, 2010 7:06 PM Subject: Re: inquiry Dear Mr.Chetan, As per my discussion with Mr.Sandeep, please note that it won't be possible for us to offer less than given quote. Pls.confirm Regards, .....

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ou over telecom, we can offer Cefexime @ ₹ 9700/- Kg ++ & cefpodoxime @ ₹ 12500/- Kg++. Please confirm on the same. Regards, Renuka 4) Vide e-mail dated 11.8.2010, the petitioner company expressed inability to supply of material in one go owing to the severe shortage of BF3 gas. For the sake of brevity, contents of the letter dated 11.8.2010 read thus:- "Chetan Gulati From: sandeep <sandeep@heterodrugs.com> To: Chetan Gulati <chetan.gulati@neclife.com> Cc: Ms.Ren .....

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ase Order dated 18.8.2010 read thus:- "Chetan Gulati From: Chetan Gulati <chetan.gulati@neclife.com> To sandeep <sandeep@heterodrugs.com> Cc: Aarti chauhan arti.chauhan@neclife.com>;< renuka@heterodrugs.com.> Sent: Wednesday, August 18, 2010 12:28 PM Subject: Re: P.O. Ref: NLL/R.M./U02/131/2010-11 Date: 17.08.2010 M/s HETERO DRUGS LIMITED #501-504, 5th FLOOR VYOM ARCADE, TEJPAL SCHEME ROAD NO.5, VILE PARLE (EAST), MUMBAI 400 057 PHONE-022-66442000 FAX-022-26849344 MOBIL .....

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QUIRED IN MICRONISED 6000 KGS PAYMENT TERMS & CONDITIONS: Price Basis : FOR Our Works Packing & Forwarding : Nil Insurance : To be arrange by you Excise : @ 10.30% Extra Sales Tax : @ 2% Extra against form C Delivery : Before 30.9.2010 Payment Terms : 60 Days Credit PRICE ESCALATION The price mentioned in the order is fixed and firm for all the purposes and no escalation whatsoever will be allowed till the execution of this order. JURISDICTION It may be noted that any disputes arising ou .....

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as token of acceptance. Thanks/Regards, For Nectar Life sciences Ltd. (Authorized Signatory) We hereby accept the order as per terms & conditions mentioned above. (Authorized Signatory) (Please sign with official seal and sent back by return fax) Thanks & Regards Chetan Gulati (Sr.Manager Purchase) Nectar Lifesciences Limited Corporate Office: SCO 38-39, Sector 9-D, Madhya Marg, Chandigarh 160 009 INDIA Mobile Tel# : +91 93562 87000 Tel# (Direct) : +91-172-3047720/5033535 Tel# (Board) : .....

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- Letter dated 18.8.2010 From: Renuka <renuka@heterodrugs.com.> To: Chetan Gulati <chetan.gulati@neclife.com> sandeep <sandeep@heterodrugs.com> CC: Aarti Chauhan <aarti.chauhan@neclife.com> Sent: Wednesday, August 18, 2010 5:49 PM Subject: RE: P.O. Dear Mr.Chetan, We shall get back to you with details delivery schedule for the same. Please note that as informed earlier, we can supply maximum 1 MT/ month for the same. Regards, Renuka Letter dated 30.8.2010 "Aarti Chau .....

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September 1st week & will try to allocate maximum quantity as possible. Regards, Renuka He further submits that the aforementioned correspondences leave no manner of doubt of concluded contract and since the petitioner company did not supply the agreed material, the respondent company suffered losses and for that, it had purchased the material from other source at a higher price and for that, a civil suit claiming recovery/damages of ₹ 3.30 crores has been filed by forfeiting the amou .....

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0 and urges this Court for dismissal of the petition. In support of his contentions, he has relied upon the following judgments to contend that in a winding up petition, set-off is permissible, in essence, it is permissible under law and it would not invite the Company Court to pass an order of winding up of the company:- 1) Martin & Harris Pvt.Ltd. Versus Organon (India) Pvt.Ltd., [2014] 187 CompCas272 (Cal); 2) Kuoni Travel (India) Private Limited Versus Tecumseh Products India Private Lim .....

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ment, provides the deposit of money in the bank account after deduction of the commission, taxes and other expenses. It is not an allegation of the petitioning-creditor that the Company has violated any of the terms and conditions embedded in the agreements. The termination came because of the change in the policy and it cannot be said at this stage that the remedy of the Company is not available in seeking the damages for illegal and wrongful termination. The Company has approached the Bombay H .....

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t in case of Smt.Vijayalakshmi v. Hari Hara Ginning & Pressing reported in MANU/AP/0394/1999: (1999) 96 Company Cases 723 held: "Thus, even if a part of the liability is admitted, that itself will not constitute an admitted amount due which a company is unable to pay nor can it be inferred that the company's liabilities are more than its assets and the Company is not able to discharge its liability or it requires the protection of the debtors by admitting the company petition for li .....

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ector. The petitioner has not even responded to the said letter for more than four months before it has denied any failure or liability on its part. Be that as it may, as the respondent has raised the dispute much before the contemplation of the Company Petition, it cannot be said that the denial of debt by it is not bona fide and the same is intended to evade the legally payable debt. 13. Following the legal position which emerged from the above-mentioned judgments, I am of the opinion that the .....

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imed by the respondent is not an after-thought and that it has been consistent in its stand in this regard much before the filing of the winding up petition. Paras 26 and 32 of Judgment No.3: "26. In our opinion, these are disputes which cannot be resolved on affidavits but in a regular action. On a consideration of all the facts and circumstances of the case, it cannot be said that the defence sought to be raised by the appellant in the instant case is frivolous or mala fide. In substance, .....

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hat a such a claim is frivolous or made with an intention to defeat the claim of the respondent or without any merit. The respective cases as made out by the parties require thorough investigation which is only possible in a regular action. 32. In our opinion, the questions sought to be raised in the instant case are questions which, if established, may constitute a valid case for the company. Whether the company will succeed in establishing its case or not will naturally depend on the result of .....

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t fall within the parameters of admitted liability enabling the Court to pass the winding up order, much less admit the petition as the defence raised by the respondent company is bonafide and not malafide. The reproduction of the e-mails, ibid, leaves no manner of doubt that the respondent company had placed the Purchase Order vis-a-vis CP 6 MT at the rate of ₹ 12,250/-, Kg. whereas the petitioner company had offered the rate at the rate of ₹ 12,750/- and ultimately agreed for ͅ .....

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18.8.2010, the respondent company had placed the Purchase Order with regard to CT and had been supplied the material worth ₹ 3,20,64,210/-, but owing to the non-supply of CP, the company had purchased the material from other source at a higher price, for which the civil suit is pending and the same shall be proved in those proceedings and the petitioner company shall have a right to rebut the same. In my view, at this stage, the petitioner company cannot be permitted to continue, much less .....

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f the suit as the present company petition was filed on 22.2.2012 and notice was issued on 17.7.2013, whereas the suit had been filed on 19.12.2011. Copy of the suit has already been annexed as Annexure R-1. There is another aspect of the matter. After supplying the schedule as per the letter dated 30.10.2010 (supra), the petitioner company deviated from the agreed rate and sought amendment in the rate of ₹ 13,000/- per kg. vide letter dated 30.10.2010. For the sake of brevity, the content .....

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ride Gas. We have discussed with M/S. Navin Fluorine, they have informed that situation of supply will not improve till April, 2011. We have explored the possibility of importing gas but which is going on double the price at which we are getting existing supply by which cost of Proxetil will touch around ₹ 14,000/- per kg. For these supplies we have given higher price than the existing one & we have paid advance to them for the supplies so that the supply should come regularly. We requ .....

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