Calcutta High Court

S.K. Sarawagi & Company Pvt. Ltd vs Bigboss Steel & Alloys Ltd on 11 May, 2023

                 IN THE HIGH COURT AT CALCUTTA

                 (Ordinary Original Civil Jurisdiction)

                              ORIGINAL SIDE



Present:

The Hon'ble Justice Krishna Rao



                             IA No. GA 4 of 2021
                              In CS 84 of 2012


                  S.K. Sarawagi & Company Pvt. Ltd.
                                     Vs.
                      Bigboss Steel & Alloys Ltd.



           Mr. Reetobrato Mitra
           Mr. Adil Rashid
           Ms. Meenakshi Manot
           Mr. Sanjay Jhunjhunwala
                                           ...For the Plaintiff/Petitioner.


           Mr. Dhruba Ghosh, Sr. Adv.
           Mr. Altamash Alim
           Mr. Sankar Naryan Saha
           Mr. Bikash Roy
                                           ...For the Defendant/Respondent.

Hearing Concluded On : 24.02.2023

Judgment on : 11.05.2023

Krishna Rao, J.:

1. The plaintiff has filed the present application praying for Judgment and

Decree on admission of a sum of Rs. 2,55,17,542.34/- along with

further interest @ 24% per annum.

2. The plaintiff has filed the suit being CS 84 of 2012 praying for a decree

for a sum of Rs. 1,09,31,769.60/- along with interest @ 24% per

annum.

3. As per the case of the plaintiff, the defendant has clearly unequivocally

admitted and acknowledged its liability towards the plaintiff to make

payment as claimed by the plaintiff.

4. Mr. Reetobrato Mitra, Learned Advocate representing the plaintiff

submits that in the usual course of business, the plaintiff had placed

purchase orders for supply of the iron ore lumps and fines with the

defendant, and in terms of the said purchase order, the defendants

supplied such material to the plaintiff. After giving all credit for all

payments made by the plaintiff against goods supplied by the

defendant prior to 16th July, 2008, a sum of Rs. 48,869/- was lying

credit to the credit of the defendant which was agreed to be taken into

consideration at the time of next transaction between the parties.

5. Mr. Mitra submits that on 16th July, 2008, the plaintiff had placed

purchase order on the defendant for purchase of the following :

i. 3,000 M.T. of iron ore fines would be supplied by the defendant to the plaintiff.

ii. 3,000 M.T. would have a minimum iron contains of 62.5%.

iii. The rate of such goods was fixed @ of Rs. 4,000/-

per M.T. along with C.S.T @ 2%.

iv. The entire payment was to be made in advance by the plaintiff.

6. Mr. Mitra submits that in terms of the purchase order, plaintiff has

made payment of Rs. 1,22,40,000/- taking into consideration, the prior

outstanding of Rs. 48,869/-. The defendant had made supply of part

quantity of iron ore fines in between April, 2008 to April, 2009. As the

goods supplied by the defendant was not as per the specification and

accordingly with the mutual consent of the parties, the defendant had

reduced the price of the goods supplied by the defendant.

7. Mr. Mitra submits that out of the total supply of 3000 MT of iron ore,

the defendant had supplied only 1577.14 MT leaving a balance of

1422.76 MT. As the defendant had not supplied the balance quantity

amounting to Rs. 80,21,950/- as on 31st March, 2009.

8. Mr. Mitra submits that after several requests, the defendant was able to

pay a further sum of Rs. 12,00,000/- leaving credit balance of Rs.

64,56,883.60 in favour of the plaintiff. He further submits that from

time to time, the defendant had issued post dated cheques to the

plaintiff in discharge of its liability to refund the outstanding of the

plaintiff but on the date of maturity of the post dated cheques, the

defendant requested the plaintiff not to present such cheques.

9. Mr. Mitra submits that the defendant had issued a fresh post dated

cheques for Rs. 10,00,000/- dated 24th May, 2011 but the same was

also dishonored with the endorsement "insufficient fund".

10. Mr. Mitra submits that an amount of Rs. 64,56,883.60/- is admitted by

the defendant and the defendant has no defence to the claim of the

plaintiff, it was presumed that the defendant was unable to pay its due

on account of its commercial insolvency, accordingly, the plaintiff had

initiated a Company Petition No. 409 of 2011 before this Court to

windup the defendant under the provisions of the Companies Act,

1956.

11. Mr. Mitra submits that defendant has entered into the said case and

raised frivolous defence and infact the defendant had admitted that the

sums are due and payable to the plaintiff. The said case was disposed

of on 9th January, 2012 by directing the defendant company to secure

the claim of the plaintiff to the tune of Rs. 20,00,000/- and granted

leave to the plaintiff to file an appropriate proceeding in the nature of a

suit for realization of such amount.

12. Mr. Mitra submits that the defendant has illegally and unlawfully

withheld the balance money paid by the plaintiff for affecting the supply

of iron ore under the contract between the parties but the defendant

failed to do so and accordingly an amount of Rs. 2,55,17,542.34/-

along with interest @ 24 % per annum is liable to be paid by the

defendant to the plaintiff.

13. Per contra, Mr. Dhruba Ghosh, Learned Senior Advocate representing

the defendant submits that the suit was filed in the year, 2012 and

after the period of 9 years, the plaintiff has filed the instant application

and as such the application is not maintainable.

14. Mr. Ghosh submits that there are various tribable issues that arises in

the suit and the claim made by the plaintiff cannot be disposed of in a

summary manner. He submits that no case for judgment on admission

has been made out in the present application and there is no

unambiguous unequivocal admission of liability made by the defendant

on contrary the defendant has denied the claim of the plaintiff.

15. Mr. Ghosh submits that the plaintiff has placed three orders for supply

of iron ore between 23rd August, 2008 and 4th April, 2009, the

defendant had sold and supplied a total quantity of 1508.720 MT to the

plaintiff and the total price of the supplied iron ore was Rs.

61,55,579.20/- which includes Central Sales Tax at 2 % with the

condition that the plaintiff will furnish the requisite "Form C". He

submits that several requests and reminders were made to the plaintiff,

the plaintiff choose to supply "Form F" but deliberately choose not to

supply "Form C" for CST and because of the same a sum of Rs.

14,52,929/- was liable to be adjusted from the credited balance of the

petitioner.

16. Mr. Ghosh submits that the previous Company Petition filed by the

plaintiff was disposed of by the Company Court wherein the Hon'ble

Court held that there were serious triable issues and the matter could

not be disposed of in a summary proceeding and the plaintiff has not

brought any new subsequent facts seeking summary decree and as

such the application filed by the plaintiff is liable to be dismissed.

17. Mr. Ghosh further submits that the defendant has made payment to

the plaintiff in the following manner :

i. Cash of Rs. 6,00,000/- from July 22, 2009 to February 10, 2010 - Cash receipts annexed with AO; ii. Cheque of Rs. 7,00,000/- dated November 3, 2009; iii. Cheuqe of Rs. 5,00,000/- dated April 7, 2010; iv. Cash of Rs. 26,00,000/- from February 2010 to May 26, 2011.

18. Mr. Ghosh further submits that the purported demand notice dated 8th

June, 2011 was sent to the defendant which was received by S.K.D on

11th June, 2011 but it is the specific case of the defendant that no

notice was served upon the defendant. He also submits that there is no

authorized signatory as S.K.D in the company to receive and sign such

letter. He further submits that the purporting alleged account

confirmation from 1st April, 2008 to 12th June, 2009 by SKD on behalf

of the defendant but fact remains no employee name SKD was with the

defendant.

19. Mr. Ghosh further submits that there is no such admission on behalf of

the defendant and as such no judgment and decree can be passed on

admission.

20. Mr. Ghosh relied upon the following judgments:

i. (2022) 10 SCC 496 (Karan Kapoor -vs- Madhuri Kumar).

ii. Unreported judgment passed by this Court in the case of Awam Marketing LLP -vs- M/s. Orient Beverages Limited passed in GA No. 4 of 2021, CS No. 85 of 2016 dated 5th December, 2022.

21. Heard the Learned Counsel for the respective parties, perused materials

on record and the judgments relied by the defendant.

22. Admittedly, the plaintiff has placed an order for supply of 3000 MT iron

ore to the defendant and the plaintiff has paid the total amount of Rs.

1,22,40,000/- inclusive of CST @ 2%. Out of which the defendant has

supplied total quantity of 1577.14 MT leaving the balance of 1422.86

MT.

23. The dispute with regard to the refund of the cost of the balance goods

which the defendant has not supplied to the plaintiff, claim of refund of

advance payment was filed by the plaintiff before the Company Court in

CP No. 409 of 2011 against the defendant and the Company Court had

disposed of the said application on 9th January, 2012 by passing the

following order :

"Even if the company's defence as to the ledger account is disregarded, it would not detract from the company's defence made out in respect of cash payments or adjustments. It is the petitioner's case that upon the accounts being reconciled between the parties on or about June 12, 2009 that the company had agreed to refund the balance sum due. It is the petitioner's further case that cheques were thereafter issued by the Company to the petitioner on account of the amount owed to the petitioner. Some of these cheques were admittedly dishonoured upon presentation. The other cheques that had been issued by the company to the petitioner, according to the petitioner, were taken back by the company with a promise that the same would be replaced or the payment in lieu thereof would be made. It is difficult to accept that a creditor would handover cheques issued in its favour to the debtor without ensuring some other form of security or the payment being simultaneously being made. However, farfetched the company's defence may appear to be in first flush, it is possible that the company obtained the return of cheques from the petitioner against cash payments

that the company made. There is a doubt that lingers and when there is a doubt in a creditor's winding-up petition, the company has to be given the benefit thereof.

Since, the company has offered to secure a sum of Rs. 20 Lakh in respect of the petitioner's claim and since the company's defence does not appear to be altogether without basis, though slightly far-fetched, the claim of the petitioning creditor is relegated to a suit subject to the company furnishing cash security to the tune of Rs. 20 Lakh in favour of the Registrar, Original Side, within a period of fortnight from date."

24. In the present proceeding also the defendants have taken a specific

defence that the defendants have made payments to the plaintiff

against the dues of the plaintiff as mentioned in paragraph 17 above

and the defendants have also denied with regard the confirmation of

account made by one SKD and the notice received by SKD but by name

SKD is not the employee of the defendant company.

25. The defendants have further taken a defence with regard to non-supply

of Form C for CST due to which an amount of Rs. 14,52,929/- was

liable to be adjusted from the credit balance of the petitioner.

26. The Hon'ble Company Court while disposing of the Company Petition

filed by the plaintiff taking note of all the defence raised by the

defendant and accordingly relegated to suit subject to furnishing cash