9911796707
TMI Blog2014 (3) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... maceuticals, paints and coating, food and other industries. The chemicals supplied by the petitioner are required by the respondent company for manufacturing Panels. The petitioner had been regularly supplying goods to the respondent which were utilized by the respondent without any complaints. 3.2 The petitioner supplied certain goods in the month of December, 2010 and February, 2011 and duly raised the invoices for the same. The details of the said invoices are as under:- S.No. Invoice No. Date Amount (Rs.) Outstanding amount on each invoices (Rs.) 1 GOGP000610 08.12.2010 501,028.94 146,391.02 2 GOGP000623 14.12.2010 469,716.02 469,716.02 3 GOGP000632 21.12.2010 502,967.28 502,967.28 4 GOGP000863 21.02.2011 6,44,161.58 1,530.58 3.3 The amount outstanding and payable by the respondent in respect of the said invoices aggregates to Rs. 11,45,690.55/- 3.4 It is stated by the petitioner that the petitioner had been regularly pursuing the respondents for the outstanding payments, however, the respondent has failed and neglected to discharge its debts. The petitioner has placed on record various emails sent by the petitioner calling upon the respondent to ens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny issue with regard to the quality of the material supplied by the petitioner and the petitioner had received no communication in this regard. The learned counsel for the petitioner submitted that the letters dated 22.09.2011, 25.11.2011 and 10.12.2011 relied upon by the respondent were never received by the petitioner and the same have been created after the filing of the present petition. It was contended that the reference of the letters did not find mention in the contemporaneous mails exchanged between the parties. It is submitted that since the payments due to the petitioner were not disputed at any stage prior to filing of the present petition no controversy could be raised at this belated stage. In terms of the purchase order payment was required to be made within a period of 90 days. This admittedly had not been done by the respondent. 9. I have heard the learned counsel for the parties. There is no dispute that the goods in respect of which the invoices have been raised were in fact supplied to the respondent. The respondent has also not disputed the value of the goods as stated in the invoice. Admittedly, the goods in question have been consumed by the respondent for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted u about our financial status/position correctly. Hope U hv all right to express the concern/& put allegations on us with or without reasons. Any How, Suggest that u need to be a little more patience for some more time. Our finance are making necessary arrangements for release of payments very soon on priority please. Please do get in touch with us in future also!!! Thanks & regards" 12. The said email clearly indicates that the only reason which was provided by the respondent for not making payment to the petitioner was its financial status. The amount being claimed by the petitioner was not disputed and the respondent also assured that it would make necessary arrangement for discharge of the said debt. Even, at this stage there was no whisper of any dispute with regard to the dues being claimed by the petitioner. 13. The petitioner has also referred to two other emails dated 22.09.2011 and 07.10.2011 sent by respondent which also indicates that the only reason that the respondent had provided to the petitioner for delay in making payments was the lack of availability of funds. These mails are also important to examine whether the communications produced by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and this has led to a dispute between the respondent company and one of its clients. The respondent submitted that the chemical supplied by the petitioner was utilized in manufacturing Panels which could not produce the requisite density and strength. It was alleged that on account of the defective material, the consignment manufactured by the respondent were rejected. It is relevant to note that the respondent did not produce the correspondence referred to in its reply. The petitioner filed its rejoinder and categorically disputed that any communication raising any issue whatsoever with respect to the quality of the material supplied had ever been sent by the respondent. He stated that the respondent had not raised any issue with regard to the quality of the material supplied by the petitioner at any stage. The petitioner further asserted that the contention regarding the quality of the material supplied was raised by the respondent for the first time in its reply to the petitioner. 18. In order to counteract this statement made in the rejoinder, the respondent had filed an additional affidavit producing copies of three letters allegedly sent to the petitioner. The first letter w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho has signed the letter. It is also relevant to note while the letter dated 22.09.2011 states that the payments are being withheld, the email of the same date sent by the respondent assures the petitioner that the payments due to the petitioner would be made and that the respondent was also trying to raise resources to "generate/maximize cash flow" which would enable the respondent to give a definite schedule for repayment. In any event the respondent promised that the dues would be paid before 31.03.2012. None of the emails sent by the petitioner subsequently, were responded to by the respondent. The respondent also did not respond to the notice under Section 434(1)(a) of the Act. In the event that there was any dispute as to the payment of dues to the petitioner, the petitioner ought to have been confronted with the same when a demand was made by the petitioner. And, in any event the notice under Section 434(1)(a) of the Act must be confronted by presenting the dispute sought to be raised. Absence of a response at the relevant stage indicating a dispute as to the payments being demanded, is an indicator of the lack of bonafides. 23. If the controversy raised by the respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) of the Act. Although it is well settled that substantial disputes which require adjudication and leading of evidence cannot not be considered by the Company Court. However, in cases where a sham and moonshine defence is raised, a Court is not precluded from examining the disputes sought to be raised and ascertaining whether the disputes have any merit and whether the disputes are bonafide. In the case of Kunal Pipes (supra), the facts indicated that a new management had taken over the respondent company on the basis of its audited balance sheet. The balance sheet of the respondent did not reflect the loans, which were claimed by the petitioner as payable by the respondent company. The petitioner relied upon an acknowledgement letter issued by an erstwhile Director of the company. The respondent disputed that the amount was payable and also disputed the letter of acknowledgement. The question whether any liability existed at all was disputed. It is in this context that the Court held that only a Civil Court could determine the issues raised by giving both parties opportunities to lead evidence. In the present case, the liability to pay the amount demanded by the petitioner is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Where the company has a bona fide dispute, the petitioner cannot be regarded as a creditor of the company for the purpose of winding up. "Bona fide dispute" implies the existence of a substantial ground for the dispute raised. Where the Company Court is satisfied that a debt upon which a petition is founded is a hotly contested debt and also doubtful, the Company Court should not entertain such a petition. The Company Court is expected to go into the causes of refusal by the company to pay before coming to that conclusion. The Company Court is expected to ascertain that the company's refusal is supported by a reasonable cause or a bona fide dispute in which the dispute can only be adjudicated by a trial in a civil Court. " 28. It follows from the aforesaid decision that Court must examine whether the controversy raised by the respondent is bonafide and raises a substantial dispute or whether dispute raised has been conjured up only to defeat a legitimate claim of the creditor. In the present case, the stage and the manner in which the dispute has sought to be raised clearly indicates that the same is not a bonafide dispute. 29. The learned counsel for the respondent has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra), the Court came to the conclusion that the case involved disputed questions of fact as the documents relied upon by both the parties were alleged as forged and fabricated. It is relevant to note that in that case the petitioner relied upon a Statement of confirmation of accounts. The said Statement was produced for the first time in the petition and was not relied upon by the petitioner in any of the contemporaneous correspondence. Even the statutory notice sent by the petitioner did not refer to the said confirmation. Accordingly, the Court came to a conclusion that the Statement of confirmation could not be accepted without the same being tested in trial. Indisputably, the matter involved disputed questions of fact. In the present case, the material facts are not in dispute. The alleged letters relied upon by the respondent do not find mention in the contemporaneous emails and even otherwise the merits of the contention raised therein do not indicate any substantial dispute. 31. In the case of Zhuhai Hansen Technology Co Ltd. (supra) the goods dispatched by the petitioner were not accepted by the respondent and were not cleared from customs. This, itself, indicates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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