Bombay High Court
Vision Millennium Exports Pvt Ltd vs Arcadia Trading Pvt. Ltd on 8 December, 2017
Bench: R.M. Savant
app-131.17-aw-nma-29.17&ors
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 131 OF 2017
IN
COMPANY PETITION NO. 281 OF 2015
WITH
NOTICE OF MOTION LODGING NO.29 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its Registered Office at ]
J.N.1, 65-85, Sector No.9, Vashi, ]..... Appellant/Applicant
Navi Mumbai, 400 703 ] (Original Respondent)
Versus
M/s. Stride Multitrade Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
Office No.33, Shrinaman Plaza ]
Behind Shoppers' Stop ]..... Respondent
Kandivali (W), Mumbai 400067 ] (Original Petitioner)
ALONG WITH
APPEAL NO.135 OF 2017
IN
COMPANY PETITION NO.760 OF 2015
WITH
NOTICE OF MOTION LODGING NO.21 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its Registered Office at ]
J.N.1, 65-85, Sector No.9, Vashi, ]..... Appellant/Applicant
Navi Mumbai, 400 703 ] (Original Respondent)
Versus
M/s. Addax Trading Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
G-9, Shop No.12, Jesal Park Building ]
Jesal Park Cooperative Hsg. Soc. ]
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Bhayender (E), ]..... Respondent.
Thane, 401 105 ] (Original Petitioner)
ALONG WITH
APPEAL (LODGING) NO.84 OF 2017
IN
COMPANY PETITION NO.586 OF 2014
WITH
NOTICE OF MOTION LODGING NO.539 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
a Company incorporated under the ]
Provisions of Companies Act, 1956 ]
having its Registered Office at J.N. 1, ]
65-B5, Sector No.9, Vashi, ]..... Appellant/Applicant
Navi Mumbai, 400 703 ] (Original Respondent)
Versus
M/s. Nova Trading Pvt. Ltd. a, Company ]
incorporated under the provisions of the ]
Companies Act 1956 having its ]
Registered Office at Office No.36, ]
Shrinaman Plaza, Shrinaman Plaza ]
Behind Shoppers' Stop Kandivili (W) ]..... Respondent
Mumbai 400 067 ] (Original Petitioner)
ALONG WITH
APPEAL NO.128 OF 2017
IN
COMPANY PETITION NO.757 OF 2015
WITH
NOTICE OF MOTION LODGING NO.25 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
M/s. Imperial Mark Trade (India) Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
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having its registered office at ]
Office No.36, Shrinaman Plaza ]
Behind Shoppers' Stop ]..... Respondent
Kandivali (W), Mumbai 400067 ] (Original Petitioner)
ALONG WITH
APPEAL NO.129 OF 2017
IN
COMPANY PETITION NO.756 OF 2015
WITH
NOTICE OF MOTION LODGING NO.23 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
M/s. Utility Impex Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
G-9, Shop No.12, Jesal Park Building ]
Jesal Park Cooperative Hsg. Soc. ]..... Respondent
Bhayender (E), Thane 401105 ] (Original Petitioner)
ALONG WITH
APPEAL NO. 130 OF 2017
IN
COMPANY PETITION NO.759 OF 2015
WITH
NOTICE OF MOTION LODGING NO. 27 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
Vishal Victory Oiltech Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
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having its registered office at ]
505, Center Point Apartment ]
28/2 Shakespear Sarani ]..... Respondent
Kolkata 700017 ] (Original Petitioner)
ALONG WITH
APPEAL NO.132 OF 2017
IN
COMPANY PETITION NO.566 OF 2014
WITH
NOTICE OF MOTION LODGING NO.24 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
M/s. Frame Impex Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
G-9, Shop No.12, ]
Jesal Park Building ]
Jesal Park Cooperative Hsg. Soc. ]..... Respondent
Bhayender (E), Thane 401105 ] (Original Petitioner)
ALONG WITH
APPEAL NO.133 OF 2017
IN
COMPANY PETITION NO. 16 OF 2014
WITH
NOTICE OF MOTION LODGING NO. 30 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
Arcadia Trading Pvt. Ltd. ]
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incorporate under the Companies Act 1956 ]
having its registered office at ]
Office No.33, Shrinaman Plaza ]
Behind Shoppers' Stop ]..... Respondent
Kandivali (W), Mumbai 400067 ] (Original Petitioner)
ALONG WITH
APPEAL NO. 134 OF 2017
IN
COMPANY PETITION NO. 758 OF 2015
WITH
NOTICE OF MOTION LODGING NO. 33 OF 2017
Vision Millennium Exports Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
J.N. 1, 65-B5, Sector No.9, Vashi ]..... Appellant/Applicant
Navi Mumbai 400703. ] (Original Respondent)
Versus
Sear Trading Pvt. Ltd. ]
incorporate under the Companies Act 1956 ]
having its registered office at ]
Office No.7-B-3, Giriraj Building ]
Ground floor, Iron Market, Carnac Bunder ]..... Respondent
Kandivali (W), Mumbai 400009 ] (Original Petitioner)
Mr.Yusuf Iqbal Yusuf a/w Mr.Neville Majra, Ms. Shaista Pathan, Mrs.Anvee
Mehta, Mr.Feroj Qureshi i/by Mr. Akhileshwar Sharma for the Appellant.
Mr. Sharan Jagtiani a/w Mr. Sunny Shah i/by Mr. Hemant Sethi for the
Respondents.
CORAM : R. M. SAVANT &
SARANG V KOTWAL, JJ.
Reserved on : 13th November 2017
Pronounced on :- 08th December 2017
JUDGMENT : [PER R M SAVANT, J]
1 All the above Appeals are admitted and with the consent of the
learned counsel for the parties are heard forthwith.
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2 The above Appeals challenge the order dated 17/18 th October
2016 passed by a learned Single Judge of this Court (A.K.Menon,J.) by which
order the Company Petitions filed by the Respondents herein came to be
disposed of in terms of the directions issued in the said order which directions
inter-alia contained the direction to deposit the amounts claimed in the
statutory notices issued by each of the Respondents in the above Appeals. The
said directions are reproduced herein under for the sake of ready reference :-
"(i) The respondents shall deposit amount of
advances by them in each of these petitions in this
Court within a period of 12 weeks from today. The
amounts to be deposited in each of the Petition is
specified in the Orders passed in those petitions.
(ii) Accordingly in each of these petitions the
petitioners will deposit the principal sums claimed in
the statutory notices. In Company Petition No. 281 of
2015 the Respondent shall deposit with the
Prothonotary and Senior Master a sum of
Rs.51,00,00,000/- on or before 16th January, 2017.
(iii) In the event deposit is made and if a suit is filed by
the Petitioner, the amounts so deposited will be
transferred to the suit account to be invested in a
Nationalised Bank initially for a period of one year and
further periods of one year each.
(iv) If the deposit is not so made, the petition shall
stand admitted, returnable within six weeks from the
date of default and be advertised in two local
newspapers i.e. Free Press Journal (in English) and
Navshakti (in Marathi) and in the Maharashtra
Government Gazette.
(v) The Petitioner shall deposit an amount of
Rs.10,000/- with the Prothonotary and Senior Master of
this Court towards publication charges, within two
weeks from the date of default, with intimation to the
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Company Registrar failing which the Petition shall stand
dismissed for non prosecution.
(vi) All the petitions are disposed of in the above terms.
(vii) There will be no orders as to costs."
3 Since the above Appeals involve common questions of fact and
law, they are heard together.
4 By consent of the learned counsel for the parties, Appeal No.131 of
2017 (Vision Millennium Exports Pvt. Ltd. v/s. M/s. Stride Multitrade Pvt. Ltd.)
is treated as the lead matter as the facts in the Company Petition No.281 of
2015 filed by M/s. Stride Multitrade Pvt. Ltd. are referred to in the impugned
order.
5 The facts giving rise to the filing of the above Appeals can in a
nutshell be stated thus :-
The Appellant and the Respondents in each of the Appeals are all
bodies Corporate engaged in the business inter-alia of high quality edible oils,
soyabean meal and other agricultural commodities. The facts in all the above
Company Petitions are identical, save and except the dates of the Sales
Confirmation Notes, Contracts, quantity of the product, delivery schedule and
the rates.
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The parties would be referred to as per their nomenclature in the
Trial Court i.e. before the learned Single Judge, the Appellant would be
referred to as the Respondent whereas the Respondent would be referred to as
the Petitioner.
The case of the Petitioner as appearing in the Company Petition is
that the Petitioner under the five contracts for purchase of Soyabean Meal had
paid a sum of Rs.51,00,00,000/- to the Respondent as advance against the
total purchase price of Rs.101,34,00,000/-. The said amount of
Rs.51,00,00,000/- was transferred to the account of the Respondent by RTGS
on various dates as mentioned in paragraph 9 of the Company Petition. The
Petitioner in respect of the said payment has placed reliance on the bankers
certificate annexed at Exhibit D to the Petition confirming that six remittances
totalling to Rs.51,00,00,000/- have been made to the Respondents. The
receipt of the advance in the instant Company Petition of Rs.51,00,00,000/- as
also the advances from the other Petitioners in the other companion Company
Petitions is not in dispute.
The details of the Soyabean Meal contracts entered into between
the Petitioner and the Respondent are tabulated herein under :-
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Sr.No. Contract No. Contract Quantity Contract Delivery
Date (in MT) Value (in Period
Crore)
1 VMEPL/SBM/018/1 15.09.2011 10700 20.01 within 6
1-12 months
2 VMEPL/SBM/027/1 23.11.2011 11500 19.78 within 6
1-12 months
3 VMEPL/SBM/037/1 31.12.2011 14000 25.48 within 6
1-12 months
4 VMEPL/SBM/011/1 28.04.2012 8500 24.14 within 6
2-13 months
5 VMEPL/SBM/014/1 24/07/2012 2650 11.93 within 6
2-13 months
(The contracts entered into between the other Petitioners and the
Respondent are identical except the contract value, quantity of the product,
delivery schedule and the rate.)
The amounts paid as advance by the Petitioner in the instant
Company Petition and the other Petitioners in the companion Company
Petitions are reproduced herein under :-
Sr. No. Company Petition No. Amount
1 16 of 2014 10,71,53,459
2 566 of 2014 15,00,00,000
3 586 of 2014 24,78,02,506
4 281 of 2015 51,00,00,000
5 756 of 2015 19,73,47,685
6 757 of 2015 32,00,00,000
7 758 of 2015 9,00,00,000
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8 759 of 2015 10,76,68,029
9 760 of 2015 7,96,86,951
It is the case of the Petitioner that the Respondent failed to deliver the
Soyabean Meal within six months period from the date of the respective
contracts and consequent upon such failure, the Petitioner had approached the
Respondent to refund the advances paid which was not given heed to by the
Respondent. The Petitioner persuaded the matter for refund, however, the
Respondent declined to refund the said sum. It was the case of the Petitioner
in the Petition that the receipt of the amount was not disputed by the
Respondent, however, the Respondent did not deliver the Soyabean Meal to the
Petitioners in each of the above Petitions.
It appears that the Respondent vide letter dated 15/06/2016
addressed to the Petitioner complained of the fact that the Petitioner had
placed a Sales Contract dated 17/09/2011 for supply by the Respondent to the
Petitioner of 5500 Metric Tonnes (MT) of Guar Seeds against an advance of
90% of the value to be calculated with reference to the price of Guar Seeds
prevailing as on 27/04/2012 being the agreed "settlement date". It was
further mentioned in the said letter that the Petitioner had made certain
advance payments in installments but this fell short of the requisite amount for
supply of the 5500 MT of Guar Seeds. It was the case of the Respondent that at
the request of the Petitioner, the Respondent reduced the advance by 30% of
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such price and the Petitioner agreed to pay further amounts against which the
Respondent would supply Guar Seeds. It was the case of the Respondent that
the amounts already paid were to be adjusted in the last lot of Guar Seeds to
be supplied. It was the case of the Respondent that though the Petitioner did
not make further payments, the Respondent continued to purchase the Guar
Seeds on behalf of the Petitioner and contended that it was in a position to
supply the seeds provided the Petitioner made payments of the amount due. It
was the case of the Respondent that it notified the Petitioner that if the balance
amounts were not paid within a period of 15 days the amounts already paid
would stand forfeited and the Respondent would claim damages.
The said letter was replied to by the Petitioner by letter dated
11/07/2013. The Petitioner denied the contentions of the Respondent and
denied that there was any contract for supply of Guar Seeds. According to the
Petitioner it had never agreed to purchase the Guar Seeds and such a contract
was never signed by it. The Petitioner reiterated its case of having agreed to
the purchase of Soyabean Meal for which it had paid the sum of
Rs.51,00,00,000/-. The Petitioner contested the forfeiture of the advances and
reserved its rights to recover the damages.
In response the Respondent vide its rejoinder dated 31/07/2013
denied the contentions of the Petitioner and reiterated the contents of its letter
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dated 15/06/2013.
Finally by a statutory notice dated 07/09/2013, the Petitioner set
out the factual background called upon the Respondent to pay a sum of
Rs.51,00,00,000/- along with interest @ 18% p.a. within three weeks.
The Respondent replied to the said statutory notice by its letter
dated 05/10/2013. The demand contained in the statutory notice was denied
and the Respondent's advocate reiterated the claim contained in the letter
dated 15/06/2013. The Respondent further contended that though the
Petitioner had agreed to purchase the Guar Seeds, the Petitioner failed to make
balance payment and had since come up with a fabricated case seeking supply
of Soyabean Meal and finally contended that a total sum of Rs.105,62,90,000/-
would be payable by the Petitioner on taking delivery of the entire quantity of
Guar Seeds. It was further contended that the last date for taking delivery of
the Guar Seeds was 26/07/2012 i.e. the 90th day from the settlement date. It
was contended that the Petitioner's failure to make balance payment and take
delivery has resulted in a loss of Rs.1,04,780/- per MT to the Respondent. The
difference accordingly was worked out at Rs.57,62,90,000/- and after
adjusting the amount of Rs.51,00,00,000/- the balance remaining to be paid by
the Petitioner to the Respondent was Rs.6,62,90,000/-. The Respondent
accordingly called upon the Petitioner to pay the said amount.
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6 It is in the background of the said statutory notice/notices that the
above Company Petition along with the companion Company Petitions came to
be filed by the Petitioners. In the said Company Petition the Appellant herein
i.e. the original Respondent filed the affidavit of one Mr.Manish Bothra -
Director of the Respondent opposing the above Company Petition inter-alia on
various grounds. In the said reply affidavit the defence taken is that there was
never any contract for purchase of Soyabean Meal and that the contracts
entered into were in respect of purchase of Guar Seeds. It was alleged that the
e-mails produced by the Petitioners were false and fabricated. It was
contended that since the Respondent went on purchasing Guar Seeds and since
the Petitioner did not make the balance payment on account of which the
Respondent had suffered financial loss, it was therefore, denied there was any
debt due to the Petitioner. A reference was also made in the said affidavit to
the investigation conducted by the Director General, Competition Commission
of India (for short "the DG CCI") in Case No.76 of 2012 pertaining to the
sharp rise in the price of Guar Seeds during the period October 2011 and
March 2012. In the said reply affidavit it is stated that various observations
were made by the DG CCI during the course of investigation into the operation
of Ruchi Group [to which the Petitioner and the other Petitioners belong]. It
was further stated in the said affidavit that the investigation reveals that the
funds received by the Respondent Company from the 9 Petitioners were for
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purchase of Guar Seeds. A reference has been made to paragraph 5.12.15 of
the investigation report. It was therefore the case of the Respondent that the
funds received pertain to the supply of Guar Seeds and not for Soyabean Meal
extract. The factum of supply of Guar Seeds during the period 2011-2012 and
its acceptance against the advance without any objection/reservation was
stated. A reference is made to the four Petitioners in Company Petition
Nos.586 of 2014, 756 of 2015, 759 of 2015 and 760 of 2015 against whom it is
the case of the Respondent that against the advances paid, certain quantities of
Guar Seeds were supplied and that is how the balance amounts are shown
against each of the said Petitioners. The discrepancy between various contracts
dates supply dates as also the discrepancy in the numbers of the contracts was
stated so as to highlight the case of the Respondent that there were no such
contracts for supply of Soyabean Meal. The Respondent accordingly sought
dismissal of the above Company Petition as also the companion Company
Petitions.
7 An affidavit in rejoinder was filed on behalf of the Petitioner
wherein the Petitioner reiterated its stand in the Company Petition.
8 The learned Single Judge as indicated above has by the impugned
order dated 17th/18th October 2016 has disposed of the Company Petition as
also the companion Company Petitions by issuing directions which are
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contained in the operative part amongst which as indicated above is the
direction for the Respondent to deposit the advances paid by the Petitioner and
the other Petitioners in the companion Company Petitions to the Respondent in
this Court within 12 weeks. A further direction came to be issued that in the
event the deposit is made and a suit is filed by the Petitioner and other
Petitioners, the amounts so deposited will be transferred to the suit account to
be invested in a Nationalized Bank initially for a period of one year and further
periods of one year each if necessary. It was clarified that if the deposit is not
made, the Petition shall stand admitted, returnable within six weeks from the
date of default and be advertised in two local newspapers i.e. Free Press
Journal (in English) and Navshakti (in Marathi) and in the Maharashtra
Government Gazette.
The gist of the reasoning of the learned Single Judge as can be
culled out from the impugned order is that though there is merit in the
contention raised on behalf of the Respondent that the circumstances
mentioned by the Respondent in its affidavit in reply indicating that the
transaction is not a genuine transaction, according to the learned Single Judge
what has been lost sight of is the fact that the said contracts have originated
from the Respondent. The learned Single Judge further held that the
contention that these are all fabricated and designed to reflect data matching
the credit balances is farfetched. The learned Single Judge has further
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observed that the denial of the contracts' authenticity appears to be a feeble
attempt to avoid liability and the consequences that follow. The learned Single
Judge has observed that the signatures of Mr. Bothra - the deponent of the
affidavit in reply which are on the contracts have not been denied. Having
regard to the dispute raised by the Respondent as regards the authenticity of
the e-mails the learned Single Judge was of the view that the denial appearing
is bare and bereft of particulars. The learned Single Judge has observed that
though on the one hand the Respondent has alleged that the contracts are
fabricated and data is created to match the credit balances, but on the other
hand denies having sent any e-mail as annexed by the Petitioner. The learned
Single Judge has taken into consideration the fact that after the affidavit in
reply was filed on behalf of the Respondent, inspection of the e-mail(s)
forwarding the said five contracts was taken. The copies of the said e-mails
have been annexed at Exhibit-G1 and G2. The learned Single Judge has
observed that apart from stating that the contracts are fabricated and that they
had not sent any mail, there is no attempt on the part of the Respondent to
dispute the signature or the rubber stamp appearing on the e-mails. The
learned Single Judge has observed that the e-mails have originated from one
Mr. Sujit/Betul Oils Ltd. whose e-mail address has been referred to by the
learned Single Judge. However, according to the learned Single Judge the fact
remains that the deponent has not contended that the Respondent has not
communicated through M/s. Betul Oils Ltd. (the group to which the Appellant
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belongs) The learned Single Judge has further observed that the signatures on
the attachments of the e-mails have not been disputed nor has the Respondent
disputed the fact that the rubber stamp appearing on these attachments. The
learned Single Judge has also adverted to the fact that the Chartered
Accountants of the Company were directed to remain present along with the
Director of the Respondent Company. Accordingly Mr. D Narsimhan the
Director of the Respondent Company and Mr. P Bhargava of the Chartered
Accountants of the Respondent Company appeared before the Court and stated
that the amounts paid by the Petitioners in the said Company Petitions were
shown as advances received in their account as on that date i.e. on
26/02/2015. The learned Single Judge therefore held that if the amounts paid
by the Petitioners were appropriated by the Respondent towards the price of
Guar Seeds ordered by the Petitioners, the amounts would not have been
shown as advance as on 26/02/2015. The learned Single Judge has also
observed that the Respondent has not filed any proceedings against any of the
Petitioners to recover the loss alleged to have been caused on account of they
being allegedly induced to purchase large quantities of Guar Seeds at the
instance of the Petitioners. The learned Single Judge having regard to all the
aforesaid facts prima facie found that the defence set up by the Respondent
does not appear to be bonafide. The learned Single Judge has observed that
having regard to the fact that the Respondent has received the amount paid
over by the Petitioners coupled with the fact that the Respondent has not relied
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upon any evidence of having purchased any quantities of Guar Seeds pursuant
to the alleged repeated orders to purchase the Guar Seeds, the defence of the
Respondent was not a plausible one. The learned Single Judge therefore as
indicated above deemed it appropriate to direct the Respondent to deposit in
this Court the amount claimed by way of the statutory notices by the
Petitioners in the above Company Petition as also the Petitioners in other
companion Company Petitions. As indicated above it is the said order dated
17th/18th October 2016 which is taken exception to by way of the above
Appeals.
9 Heard the learned counsel for the parties.
10 SUBMISSIONS ON BEHALF OF THE APPELLANT/ORIGINAL
RESPONDENT BY THE LEARNED COUNSEL MR. YUSUF IQBAL
YUSUF :
A] That the learned Single Judge erred in shifting the burden on the
Respondent i.e. the Appellant herein when the Petitioner has not
discharged its burden;
B] That the learned Single Judge erred in directing the Respondent to
make the deposit as directed by the impugned order when the
Respondent has a bonafide defence to the Company Petition as
filed;
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C] That the learned Single Judge failed to appreciate that though the
Petitioners claim to have entered into 5 contracts for supply of
Soyabean Meal, the originals of the said contracts have not been
produced by the Petitioners and therefore their case ought not to
have been accepted;
D] That the learned Single Judge erred in proceeding on the basis that
the signatures of Mr. Bothra and the rubber stamp of Mr. Bothra
were not disputed and in the said process losing sight of the
discrepancy in the e-mails on which reliance has been placed by
the Petitioner.
E] That the learned Single Judge erred in not accepting the case of
the Respondent that the funds received from the Petitioners were
for purchase of Guar Seeds which the Respondent was purchasing
through the broker Edelweiss Trading & Holdings Pvt. Ltd. and the
Petitioners failed to make payment due to sharp fall in price of
Guar Seeds between the settlement Date and the delivery Date.
F] That the learned Single Judge has failed to take into consideration
the report of the Director General of Competition Commission of
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India (DG CCI) in Case No.76 of 2012 wherein a finding has been
recorded that the amounts advanced by the Petitioners to the
Respondent towards the purchase of Guar Seeds.
G] That the learned Single Judge failed to take into consideration the
very pertinent aspect viz that the Respondent had supplied Guar
Seeds to 4 of the group companies of the Petitioners viz. M/s.
Vishal Victory Oiltech Pvt. Ltd; M/s. Addax Trading Pvt. Ltd; M/s.
Utility Impex Pvt. Ltd. and M/s. Nova Trading Pvt. Ltd. which fact
has been accepted by the said entities in their respective Petitions,
hence the case of the Respondent was a plausible one.
H] That the learned Single Judge failed to take note of the fact that it
was the Respondent who was the first to initiate correspondence
vide its letter dated 15/06/2013 whereas the Petitioner had not
entered into the correspondence almost for a period of one year
though it was the case of the Petitioner that it had not been
supplied the Soyabean Meal under the said 5 contracts;
I] That the learned Single Judge failed to appreciate that the
Petitioners could not have continued to enter into new contracts
for purchase of Soyabean Meal and paid advance despite
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consistent default in earlier contracts for purchase of Soyabean
Meal.
J] That the learned Single Judge failed to appreciate that since the
Petitioners have not signed the contracts for purchase of Soyabean
Meal, it could not be said that the said contracts were completed
and therefore the reliance placed on the said contracts was
misfounded.
K] That even though the Respondent may have neglected to pay the
debt, it being commercially solvent, a Petition for winding up is not
maintainable.
11 SUBMISSIONS ON BEHALF OF THE RESPONDENT/ORIGINAL
PETITIONERS BY THE LEARNED COUNSEL MR. SHARAN
JAGTIANI :
i] That the Petitioners produced the Soyabean Meal contracts as
signed by the Respondent with the rubber stamp of the
Respondent appearing on the same. The Petitioners have also
produced evidence of payment of Rs.51,00,00,000/- as advance to
the Respondent. That being done so, the onus therefore shifted
upon the Respondent to show that the defence raised is in good
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faith and is one of substance and it is likely to succeed;
ii] That though the defence of the Respondent was that the amount
was advanced for purchase of Guar Seeds which fact was denied
by the Petitioner, the Respondent has failed to produce the most
basic document i.e. the Guar Seeds Contracts along with any of its
pleadings before the learned Single Judge.
iii] That the Respondent also failed to produce the alleged Guar Seeds
contract even in the Review Petition No.(L) 1 of 2017 filed in
Company Petition No.586 of 2014 or along with the instant
Appeal. The said Guar Seeds contracts have been sought to be
produced for the first time by way of additional evidence by filing
Notice of Motion (L) No.1548 of 2017 in the instant Appeal;
iv] That the Respondent has failed to produce nor has made any
reference in any of the pleadings of any e-
mail/letter/correspondence through which the Respondent sent
the alleged Guar Seeds contracts to the Petitioners or vice versa.
v] That the Respondent has not produced even a single document
showing the purchase of Guar Seeds on behalf of the Respondent
lgc 22 of 42
app-131.17-aw-nma-29.17&ors
through the broker Edelweiss Trading & Holdings Pvt. Ltd.
vi] That the Respondent has accepted the said Soyabean Meal
contracts by conduct inasmuch as the Petitioners have made
payment of 50% of the contracted amount as advance and
therefore the contract can be said to be concluded by conduct.
vii] That no proof of any loss suffered by the Respondent has been
produced;
viii] That the Director of the Respondent Mr. D Narsimhan and the
representative from the Chartered Accountants of the Respondent
Mr. P Bhargava have admitted before this Court that the amounts
paid by the Petitioner are shown as advances received in the
account of the Respondent;
ix] That the case of the Respondent that the Petitioner failed to make
balance payment on account of sharp fall in price of Guar Seeds
cannot be accepted in the teeth of the fact that the Petitioners
would not have made payment of Rs.6,00,00,000/- on
26/07/2011 i.e. the day prior to the delivery date.
lgc 23 of 42
app-131.17-aw-nma-29.17&ors
x] That the reliance placed on the findings contained in the
preliminary report of the DG CCI is misplaced.
xi] That having regard to the nature of the inquiry by the DG CCI, the
same is a preliminary fact finding inquiry and not in itself a quasi-
judicial order. At that stage there is no opportunity given to the
concerned parties to make submission, but only statements are
recorded and materials considered. Hence the said preliminary
fact finding statements in that report have no evidentiary value
and is not determinative of the issues that arise inter se parties
before a Court.
xii] That as regards evidentiary value of the said report, reliance is
placed on the judgment of the Apex Court reported in (2008) 12
SCC 73 in the matter of Raymond Woollen Mills Ltd. v/s.
Director General (Investigation and Registration) & Anr. to
contend that the said report does not have any evidentiary value.
xiii] That the report of DG CCI is solely based on the bank statement of
the parties. The DG CCI did not have the benefit of material facts
necessary to determine the inter se disputes between the parties as
also the admissions made by the Director Mr. D Narsimhan and the
lgc 24 of 42
app-131.17-aw-nma-29.17&ors
representative of the Chartered Accountants Mr. P Bhargava before
this Court that the amounts paid by the Petitioners are shown as
advances received in the account of the Respondent which has
been recorded in the orders dated 23/02/2015 and 27/02/2015.
xiv] That the e-mail dated 14/02/2012 has been wrongly construed by
the Respondent, as Mr. Rajkumar Goyal of the Petitioners has
clearly stated that the advances given below for Soyabean Meal
can be adjusted through some other product i.e. guar seeds which
Betul seems to be holding. Hence on a bare reading of the e-mail
it talks about a proposal to the Respondent i.e. the Appellant
herein that the advances can be adjusted with Guar Seeds.
xv] That the supply of the Guar Seeds to the sister concerns of the
Petitioners is of no avail. The said supply has to be considered in
the context of the fact that as per the alleged Guar Seeds contracts
between the Respondent and M/s. Vishal Victory Oiltech Pvt. Ltd;
M/s. Addax Trading Pvt. Ltd; M/s. Utility Impex Pvt. Ltd. and M/s.
Nova Trading Pvt. Ltd. are dated 14/01/2012 whilst the Guar
Seeds are alleged to be supplied even prior to the contract date i.e.
on 28/11/2011 and it is only in case of the alleged Guar Seeds
contract between the Respondent and M/s. Nova Trading Pvt. Ltd.
lgc 25 of 42
app-131.17-aw-nma-29.17&ors
that the contract date is prior to the delivery date.
xvi] That the reliance placed on the order of the Hon'ble Madhya
Pradesh High Court is misplaced as the contract in issue before the
Hon'ble Madhya Pradesh High Court was different. In the said
case Betul Oils Ltd who was the Respondent therein had produced
a contract for purchase of Guar Seeds bearing a signature of M/s.
Nova Trading Pvt. Ltd. whereas the present Respondent has failed
to produce any such contract.
xvii] That though it is the case of the Respondent that the Soyabean
Meal contracts were received by Respondent from the Petitioners
by e-mails, there is not a whisper as to how the Respondent sent
the alleged Guar Seeds contract to the Petitioners or vice versa.
xviii] No correspondence was entered into by the Petitioner with the
Respondent in view of the fact that the talks between the
Petitioners and the Respondent were in person and that the
Respondent kept on giving false assurances to the Petitioners.
xix] Assuming that the case of the Respondent of the contract being for
purchase of Guar Seeds is believed to be true, the delivery date
lgc 26 of 42
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mentioned therein being 27/07/2012, the Respondent also did not
address any correspondence for almost a year before addressing
the said letter dated 15/06/2013.
xx] That it is well settled that the commercial solvency does not
constitute a stand alone ground to avoid winding up. In the event
the company refused to pay on no genuine and substantial
grounds, there is a presumption that the company is unable to pay
its debts and thus the company ought to be wound up. Reliance is
placed on the judgment of the Apex Court reported in (1971) 3
SCC 632 in the matter of M/s. Madhusudan Gordhandas & Co.
v/s. Madhu Woollen Industries Pvt. Ltd. and, (2010) 10 SCC
553 in the matter of IBA Health (I) Pvt. Ltd. v/s. Infor-Drive
Systems SDN, BHD,
xxi] The view taken by the learned Single Judge is a possible view in
the facts and circumstances of the case and therefore the
impugned order need not be interefered with by this Court in its
Appellate jurisdiction. Reliance is sought to be placed on the
judgment of the Apex Court reported in 1990 (Supp) SCC 727 in
the matter of Wander Ltd. and another v/s. Antox India P. Ltd.
lgc 27 of 42
app-131.17-aw-nma-29.17&ors
xxii] Having regard to all the aforesaid facts, the order passed by the
learned Single Judge of this Court need not be interfered with as
the Respondent i.e. the Appellant herein has not raised any
substantial or genuine ground to avoid payment or defences raised
by the Respondent i.e. the Appellant herein are not bonafide.
CONSIDERATION :-
12 Having heard the learned counsel for the parties, we have
considered the rival contentions. The question which arises for consideration
is whether the order passed by the learned Single Judge of this Court directing
the Respondent i.e. the Appellant herein to make deposit of the amounts
contained in the statutory notice and in the event a suit is filed by the
Petitioners i.e. the Respondents herein the said amount to be transferred to the
account of the said suit, is required to be interfered with. The cause for issuing
the said direction as can be seen from the impugned order is that the defence
raised by the Respondent was not found to be genuine, bonafide and plausible
one by the learned Single Judge and therefore the learned Single Judge
deemed it appropriate to put the Respondent to terms. It is required to be
noted that the only defence taken by the Respondent in the reply to the
statutory notice and in the affidavit in reply to the above Company Petitions is
the defence that there were never any contracts for purchase of Soyabean Meal
lgc 28 of 42
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but the contracts were for purchase of Guar Seeds. Though the said defence
was taken by the Respondent, significantly the Respondent has not produced
the alleged Guar Seeds contracts before the learned Single Judge or in the
Review Petition filed against the order passed in the Company Petition being
No.586 of 2014 filed by the Petitioner M/s. Nova Trading Pvt. Ltd. or even in
the instant Appeal and an attempt has now been made to bring on record the
said Guar Seeds contracts by way of an application filed under Order XLI Rule
27 of the Code of Civil Procedure being Notice of Motion (L) No.1548 of 2017
which is filed in the instant Appeal. Hence the defence which was sought to be
taken by the Respondent admittedly has not been buttressed by producing any
cogent material in that regard.
In so far as the Petitioners i.e. the Respondents herein are
concerned, they have produced e-mails which according to them have been
received from the Respondent comprising 5 contracts for purchase of Soyabean
Meal. The Petitioner has also produced the bank statements evidencing the
payment of advances of Rs.51,00,00,000/- to the Respondent by RTGS. Hence
the Petitioner has discharged the burden which was initially lying on it.
However, on the burden shifting to the Respondent, the Respondent has not
discharged the said burden by producing material which was the fulcrum of its
defence.
lgc 29 of 42
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13 The Appellant herein i.e. the original Respondent has filed an
Application to produce additional evidence being Notice of Motion (L) No.1548
of 2017. The additional evidence which is sought to be produced inter-alia
contain the alleged Guar Seeds contracts. Hence it is for the first time at the
Appellate stage that the Guar Seeds contracts are sought to be produced. By
an order passed today the said Notice of Motion (L) No.1548 of 2017 has been
dismissed for the reasons stated in the said order.
14 In so far as the 5 Soyabean Meal contracts which have been
received by e-mail by the Petitioner is concerned, each contract bears the
signature and rubber stamp of the Respondent. Each contract identifies the
quantity, rate, payment terms, delivery date. The Petitioner has given
inspection of the e-mails to the Respondent. In so far as the said contracts are
concerned, in the affidavit in reply though the authenticity of the e-mail is
sought to be disputed the denial is bare and bereft of particulars. The same
can be seen by the averments made in paragraph 20 which are reproduced
herein under :-
"The Respondent states that the alleged contracts
annexed by the Petitioners are also fabricated. The
date are created to match the existing position of credit
balance with the Respondent Company. The
Respondent denies having sent any mail as annexed by
the Petitioner. The following error is patent in the
contracts."
Hence a reading of the said paragraph indicates that though the Respondent
lgc 30 of 42
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has alleged that the contracts are fabricated and the dates are created to mach
the existing position of credit balance, on the other hand the Respondent has
denied of having sent any e-mail as annexed by the Petitioner to the Company
Petition. Significantly the Respondent has not disputed the signatures on the
contracts nor has disputed the authenticity of the rubber stamp affixed over the
signature in the Sales Confirmation Note.
15 In so far as the alleged Guar Seeds contracts are concerned, the
Respondent has not mentioned in any pleadings as to how the said Guar Seeds
contracts were sent to the Petitioners. There is no reference to any e-
mail/letter/correspondence by which the said Guar Seeds contracts were sent
to the Petitioners.
16 Another aspect which dents the case of the Respondent in so far as
the said defence is concerned is that its Director Mr. D Narsimhan and the
representative of the Chartered Accountants of the Respondent Mr. P Bhargava
have admitted before this Court that the amounts paid by the Petitioners are
shown as advance received in the account of the Respondent which fact has
been recorded in the order dated 23/02/2015 and 27/02/2015 passed in one
of the connected Company Petition being No.16 of 2014. The case of the
Respondent that the Petitioners failed to make payment on account of sharp
fall in price of Guar Seeds between the settlement date and the delivery date
lgc 31 of 42
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also appears to be unacceptable in view of the fact that the Petitioners made
payment of Rs.6,00,00,000/- on 26/07/2011 a day prior to the delivery date.
17 In so far as e-mail dated 15/02/2012 addressed by Mr. Rajkumar
Goyal to the Respondent is concerned, it is required to be noted that the said e-
mail is dated 14/02/2012 whereas the alleged Guar Seeds contracts are also
dated prior in point of time. A reading of the said e-mail indicates that the said
e-mail is in the nature of the proposal to the Respondent that the advances can
be adjusted against the Gaur Seeds. The alleged Guar Seeds contracts are all
prior in point of time to the e-mail. Hence there would be no question of Mr.
Rajkumar Goyal making a proposal for purchase of Guar Seeds to be adjusted
with the advances provided by the Petitioner. The said e-mail therefore does
not in any manner support the case of the Respondent that the amount
advanced by the Petitioner was towards the purchase of Guar Seeds. The
factum of supply of Guar Seeds to 5 entities which are sister concerns of the
Petitioner also does not further case of the Respondent in so far as contracts
being for purchase Guar Seeds and not for purchase of Soyabean Meal is
concerned. The contracts relating to Guar Seeds, according to the Respondent
are dated 14/01/2012 whilst the Guar Seeds are alleged to have been supplied
even prior to the contract date i.e. 28/11/2011. It is only in respect of the
alleged Guar Seeds contract between the Respondent and M/s. Nova Trading
Pvt. Ltd. (one of the Respondents in the companion Appeals) that the contract
lgc 32 of 42
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date is prior to the delivery date. Hence the aforesaid fact also does not
support the case of the Respondent that the contracts were in respect of
purchase of Guar Seeds and not for purchase of Soyabean Meal.
18 Now coming to the report of the DG CCI on which much reliance
was sought to be placed on behalf of the Respondent in support of its case that
the contracts were in respect of supply of Guar Seeds and not for Soyabean
Meal. The said report has been submitted by the DG CCI after undertaking an
inquiry under Section 26 of the Competition Act 2002. The statutory scheme
comprising the said Act indicates that the investigation carried out by the DG
CCI is a preliminary fact finding inquiry and is not by way of quasi-judicial
proceeding. In the said fact finding inquiry there is no opportunity given to the
concerned parties to make submissions but only statements are recorded and
material considered. In so far as the instant report of the DG CCI is concerned,
reading of paragraphs 5.12.10, 5.12.11 and 5.12.14 indicate that the DG CCI's
finding is solely based on the bank statements of the parties. The DG CCI did
not have the benefit of the material facts which are necessary to determine the
inter se disputes between the parties. In so far as the instant case is concerned,
the DG CCI did not have access to the Soyabean Meal contracts bearing the
signature and rubber stamp of the Respondent i.e. the Appellant herein, the e-
mail through which the Respondent forwarded the Soyabean Meal contracts to
the Petitioners, admissions of Mr. D Narsimhan the Director of the Respondent
lgc 33 of 42
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and, Mr. P Bhargava the representative of the Chartered Accountants of the
Respondent wherein they have stated that the amount paid by the Petitioner
was shown as advance in the account of the Respondent. The DG CCI cannot
be said to be conducting any inquiry as regards the inter se disputes between
the Petitioner and the Respondent but was only conducting the inquiry into
whether there was any monopolistic activities being carried out in the sale of
Guar Seeds.
19 In our view, though the learned Single Judge has not expressed
any opinion one way or the other as regards the efficacy of any of the findings
recorded by the DG CCI, no evidentiary value could be attached to the said
report of the DG CCI. Reliance placed on the judgment of Raymond Woollen
Mills Ltd.'s case (supra) seems to be apposite. In the said case the Apex Court
was concerned with the investigation report under the provisions of Section 11
of the Monopolies Restrictive Trade Practices Act, 1969 which provisions can
be said to be almost paramateria to Section 26 of the present Competition Act,
2002. The Apex Court held that any reference to the contents of the said
report which have not been put in evidence and subjected to cross examination
cannot be looked into. Paragraph 36 of the said report is material and is
reproduced herein under :-
36. The learned senior counsel for the respondents
referred to the "preliminary investigation report"
submitted by the Director General (I&R). The
preliminary investigation report cannot be taken into
lgc 34 of 42
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consideration as it is not produced in evidence. It is only
a report submitted in terms of Section 11 of the MRTP
Act for initiating the enquiry. Only those facts contained
therein, which are proved on record by evidence, can be
looked into. The preliminary investigation report, as
such, is not evidence on record. As such, any reference
to the contents thereof, which have not been put in
evidence and subjected to cross examination, cannot be
looked into. This is without prejudice to the contention
that there is nothing stated in the preliminary
investigation report, which in any way establishes that
any competition was affected within the meaning of
Section 2(o) of the Act and that competition was
affected to any "material degree" in the relevant trade
or industry, as contemplated under Clause (h) of
Section 38(1) of the Act.
In our view, therefore the findings of the DG CCI as contained in its report do
not further the case of the Respondent i.e. the Appellant herein.
20 In so far as the discrepancies in the Soyabean Meal contracts
alleged by the Respondent are concerned, it is required to be noted that the
Soyabean Meal contracts bear the signature and rubber stamp of the
Respondent. As indicated above the Respondent has not denied the
authenticity of the signature and its rubber stamp on the Soyabean Meal
contracts. Since the Soyabean Meal contracts have originated from the
Respondent, the discrepancies if any cannot lie at the door of the Petitioner
and it is for the Respondent therefore to explain such discrepancies. Hence the
case of the Respondent that the Soyabean Meal contracts are fabricated and
that the Respondent did not send any e-mail does not seem to be bonafide and
lgc 35 of 42
app-131.17-aw-nma-29.17&ors
is devoid of merits as rightly held by the learned Single Judge. In our view,
merely because the Petitioner did not enter into correspondence though breach
was committed by the Respondent would not dent the case of the Petitioner in
so far as their claim based on Soyabean Meal contracts is concerned. Since the
parties had a running business relationship, it may be possible that the parties
were trying to work out and in the said process time might have elapsed. In
the said context it is required to be noted that even in respect of the Guar Seed
contracts the delivery date as per the said contracts was 27/07/2012. The
Respondent did not address any correspondence for almost a year before
addressing the letter dated 15/06/2013. Hence the aforesaid fact suggests that
the parties being in continuous business relationship did not desire to
precipitate the matter and were trying to resolve the same.
21 The contention as urged on behalf of the Respondent that the e-
mails do not contain the signature made on behalf of the Petitioner and
therefore the said fact impinges upon whether there were any contracts for
purchase of Soyabean Meal. In our view, the said contention misses the point
that the said contract was acted upon inasmuch as the Petitioner had made
payment of the advance which constituted 50% of the contracted amount i.e.
the sum of Rs.51,00,00,000/- and hence in terms of Section 8 of the Contract
Act the same constitutes an acceptance.
lgc 36 of 42
app-131.17-aw-nma-29.17&ors
22 In so far as the order passed by the Madhya Pradesh High Court is
concerned, it seems that the parties and the contracts in issue before the
Madhya Pradesh High Court were different. In the said case it appears that the
Respondent therein Betul Oils Ltd had produced the contract for purchase of
Guar Seeds bearing the signature of M/s. Nova Trading Pvt. Ltd.; whereas in
the instant case the Respondent has failed to produce any such Guar Seeds
contracts. Further before the Madhya Pradesh High Court there was no
admissions as are in the present case by the Director Mr. D Narsimhan and the
representative of the Chartered Accountants Mr. P Bhargava. In so far as the
said order passed by the Madhya Pradesh High Court is concerned, it is
required to be noted that the Review Petition being No.1 of 2017 filed in
Company Petition No.586 of 2014 came to be filed by the Respondent on the
said very ground i.e. placing reliance on the order passed by the Madhya
Pradesh High Court dismissing the Company Petition. The said Review Petition
came to be dismissed by the learned Single Judge by the order dated
24/02/2017. In our view, therefore, the order passed by the Madhya Pradesh
High Court does not in any manner aid the Respondent to deny that it owes
any debt to the Petitioner in the Company Petition.
23 In so far as the contention that urged on behalf of the Respondent
that the Respondent is commercial solvent and therefore the order of the
nature passed by the learned Single Judge was not required to be passed. In
lgc 37 of 42
app-131.17-aw-nma-29.17&ors
the said context, reference could be made to the judgment of the Apex Court in
M/s. Madhusudan Gordhandas & Co.'s case (supra) and IBA Health (I) Pvt.
Ltd.'s case (supra) .
In Madhusudan Gordhandas & Co.'s case (supra), the Apex Court
held that mere ability to pay but choosing not to pay cannot be a defence in a
Petition for winding up. Paragraph 21 of the said report is material and is
reproduced herein under :-
"21 Where the debt is undisputed the court will not
act upon a defence that the company has the ability to
pay the debt but the company chooses not to pay that
particular debt (See Re. A Company 94 S.J. 369).
Where however there is no doubt that the company
owes the creditor a debt entitling him to a winding up
order but the exact amount of the debt is disputed the
court will make a winding up order without requiring
the creditor to quantity the debt precisely (See Re.
Tweeds Garages Ltd. 1962 Ch.406. (3) The principles
on which the court acts are first that the defence of the
company is in good faith and one of substance,
secondly, the defence is likely to succeed in point of law
and thirdly the company adduces prima facie proof of
the facts on which the defence depends."
In IBA Health (I) Pvt. Ltd's case (supra) the Apex Court has held
that solvency of a company might not constitute a stand alone ground for
setting aside a notice under Section 434(1)(a), meaning thereby, if a debt is
undisputedly owing, then it has to be paid. Paragraph 24 of the said report is
material and reproduced herein under :-
"24 Appellant company raised a contention that it is
lgc 38 of 42
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commercially solvent and, in such a situation, the
question may arise that the factum of commercial
solvency, as such, would be sufficient to reject the
petition for winding up, unless substantial grounds for
its rejection are made out. A determination of
examination of the company's insolvency may be a
useful aid in deciding whether the refusal to pay is a
result of the bona fide dispute as to liability or whether
it reflects an inability to pay, in such a situation,
solvency is relevant not as a separate ground. If there is
no dispute as to the company's liability, the solvency of
the company might not constitute a stand alone ground
for setting aside a notice under Section 434(1)(a),
meaning thereby, if a debt is undisputedly owing, then it
has to be paid. If the company refuses to pay on no
genuine and substantial grounds, it should not be able
to avoid the statutory demand. The law should be
allowed to proceed and if demand is not met and an
application for liquidation is filed under Section 439 in
reliance of the presumption under Section 434(1)(a)
that the company is unable to pay it debts, the law
should take its own course and the company of course
will have an opportunity on the liquidation application
to rebut that presumption.
Apart from the aforesaid legal position, it is sought to be pointed out on behalf
of the Petitioners that the net worth of the Respondent as per its last balance
sheet is much lesser than outstanding debts of the Petitioners. It is further
sought to be pointed out that the amount lying in the bank account of the
Respondent is also not sufficient to pay off the outstanding debts.
24 Now lastly coming to the issue as to whether this Court should
interfere with the impugned order passed by the learned Single Judge. In the
said context it is necessary to make a reference to the judgment of the Apex
lgc 39 of 42
app-131.17-aw-nma-29.17&ors
Court in Wonder Ltd's case. (supra). Paragraph 14 of the said report is
material and is reproduced herein under :-
"14 The appeals before the Division Bench were
against the exercise of discretion by the Single Judge.
In such appeals, the Appellate Court will not interfere
with the exercise of discretion of the court of first
instance and substitute its own discretion except where
the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the
court had ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions.
An appeal against exercise of discretion is said to be an
appeal on principle. Appellate Court will not reassess
the material and seek to reach a conclusion different
from the one reached by the court below if the one
reached by the court was reasonably possible on the
material. The appellate court would normally not be
justified in interfering with the exercise of discretion
under appeal solely on the ground that if it had
considered the matter at the trial stage it would have
come to a contrary conclusion. If the discretion has
been exercised by the Trial Court reasonably and in a
judicial manner the fact that the appellate court would
have taken a different view may not justify interference
with the trial court's exercise of discretion. After
referring to these principles Gajendragadkar, J. in
Printers (Mysore) Private Ltd. v. Pothan Joseph (1960) 3
SCR 713 : AIR 1960 SC 1156 : (SCR 721)
...... These principles are well established, but as has
been observed by Viscount Simon in Charles Osention
& Co. v. Johnston [1942 AC 130]
.... the law as to the reversal by a court of appeal of
an order made by a judge below in the exercise of his
discretion is well established, and any difficulty that
arises is due only to the application of well settled
principles in an individual case.
The appellate judgment does not seem to defer to this
principle. "
lgc 40 of 42
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Hence going by the test laid down by the Apex Court in Wander Ltd.'s case
(supra), the view taken by the learned Single Judge being a possible view
taken in the facts and circumstances of the instant case, the same does not
merit any interference in the Appellate Jurisdiction.
25 In our view, the Respondent i.e. the Appellant herein has not
raised any substantial or genuine grounds to avoid the payment and the
defences raised on behalf of the Respondent are therefore not bonafide. In our
view, the learned Single Judge has in the facts and circumstances rightly issued
the directions which are contained in the operative part of the impugned order.
26 For the reasons afore-stated the above Appeal No.131 of 2017 as
also the companion Appeals being Nos.135 of 2017, 128 of 2017, 129 of 2017,
130 of 2017, 132 of 2017, 133 of 2017, 134 of 2017 and Appeal (Lodging)
No.84 of 2017 to stand dismissed. In view of the dismissal of the Appeals, the
Notices of Motion for stay do not survive and to accordingly stand disposed of.
[SARANG V KOTWAL, J] [R.M.SAVANT, J]
After pronouncement of judgment :-
th
08 December 2017
At the time of pronouncement of the judgment, the learned
counsel appearing on behalf of the Appellant herein seeks continuation of the
lgc 41 of 42
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ad-interim order dated 17/04/2017 which is in operation till date in the above
Appeal and the companion Appeals for some time so as to enable the Appellant
to approach the Apex Court.
The said request is opposed to by the learned counsel appearing
on behalf of the Respondent/Respondents herein.
In the facts of the present case, the said ad-interim order is
continued for a period of six weeks from date i.e. till 19/01/2018.
[SARANG V KOTWAL, J] [R.M.SAVANT, J]
lgc 42 of 42
