Almacen El Unico vs Omni Tools And Forgings Pvt. Ltd.
2004 Latest Caselaw 1480 Del

JUDGMENT

A.K. Sikri, J.

1. The respondent, M/s Omni Tools and Forgings Private Limited is a private company limited by shares and is incorporated under the provisions of the Indian Companies Act, 1956 (for short `the Act'). Since it is having its registered office at New Delhi, present petition is filed in this court seeking winding up of the respondent company on the ground that it is unable to pay the debts due to the petitioner. The petitioner is a company incorporated under the laws of Columbia and is involved in the business of import and sale of wide range of hand tools from various countries. Such imports are made from India as well.

2. It is stated in the petition that business relationship started between the petitioner and the respondent some time in March, 1999 when the petitioner placed an order for supply of 16500 sets of Drop Forged (spanners made of non-alloy steel). Against this order, the respondent raised the invoice dated 22nd April, 1999 for a total value of US # 33,500 as per the following details:

"Combination Spanners 1000 sets @ US $ 3.74 P Set = US $ 3,740Set of 14 pcs.(6.32 MM)Combination Spanners 15,500 sets @ US $ 1.92 P Set =US $ 29,760Set of 14 pcs.(6.23 MM) Total : US $ 33,500."

3. As per the contract/terms of delivery, goods were to be delivered CIF Panama in transit to Colombia via Panama. As per the terms of delivery, payment was to be made in advance. In conformity with this term, the petitioner remitted US $ 33,575 through the petitioner's bankers directly to the respondent's bank on 6th May, 1999. The respondent, thereafter, sent a bill of lading dated 7th May, 1999 of M/s Mitsui O.S.K. Lines Ltd. in respect of 850 cartons with a total weight of 21,375 Kgs. (net weight of 20,100 Kgs.) showing that freight had been prepaid and that the consignment was against the invoice dated 22nd April, 1999. As per this bill of lading, the consignment had been dispatched from ICD, New Delhi by rail to Mumbai and was consigned to Colubia via Panama.

4. In April, 1999, the petitioner placed another order No. 139 dated 14th April, 1999 for 65,000 sets of Drop Forged (Spanners made of non-alloy steel) for a total value of US $ 35,100. The delivery of this material was promised by the respondent by 30thMay, 1999. The petitioner paid US $ 33,100 against this order on 1st July, 1999 and receipt of this amount was acknowledged by the respondent vide its letter dated 9th August, 1999. Assurance was also given in this letter for sending the documents of shipment after the balance of US $ 2,000 was credited to the respondent's account and for sending the shipment after the same was cleared by the customs. Relying on this assurance balance amount of US $ 2,000 was also remitted by the petitioner to the respondent on 22nd July, 1999 thereby making the entire payment of US $ 35,100 against the order No. 139 dated 14th April, 1999.

5. The case of the petitioner is that bill of lading dated 7th May, 1999 against the first order proved to be a forged/false document and in fact such a consignment was never sent. Likewise, no dispatch was made against the second order also. Thus the respondent did not send even a single hand tool in spite of having received the total payment of US $ 68,675 against the two orders. The petitioner thus followed up the matter with the respondent by making telephonic calls and also sending fax message. By letter dated 25th October, 1999, the respondent informed the petitioner that both the shipments would be dispatched before the end of November, 1999 i.e. after Diwali festival which was on 7th November, 1999. Thereafter vide letters dated 18th November and 20th November, 1999 assured to send the shipment documents to the petitioner. Similar assurances kept flowing from the respondent but needful was not done. Instead the respondent represented to the petitioner by letter dated 22nd November, 1999hat the respondent was not able to get the earlier consignment released from the customs and had started manufacturing fresh forgings and the same would be sent by the end of December, 1999. However, even this promise was not kept. Vide letter dated 25h June, 2000 the petitioner asked the respondent to specify about the production for both the consignments and their shipment and also enquired about the bill of lading. In response, the respondent sent the letter dated 25th June, 2000 making false representation to the effect that the production was complete and that the shipping documents would be sent. By subsequent letters dated 16th August, 20th August, 2000 and 12th February, 2001 further time was sought for sending the shipments and it was promied that ultimately the shipment documents would be sent by 31st March, 2001. Even this promise was not honoured.

6. The petitioner alleges that based on the assurances given by the respondent, it had entered into further contracts with retailers/wholesalers in this part of the world and due non fulfilllment of these commitments it had suffered huge losses. Later, on further follow up of the matter it transpired that the respondent company did not even own a manufacturing unit and was merely a trading company. It, therefore, became clear to the petitioner that the petitioner was forced to part with US $ 68,675 onccount of fraudulent and dishonest acts of the respondent. The petitioner through its advocate, therefore, served the legal notice dated 13th October, 2001 under Sections 433 and 434 of the Act calling upon the respondent to make the payment of US $ 97,95.65, adding interest calculated at the rate of 18 per cent per annum, within three weeks of the receipt of the notice. This notice was duly received and the respondent replied to the same vide letter dated 15th November, 2001 which, according to the petitioner, was totally vague. Under these circumstances, the petitioner filed this petition seeking winding up of the respondent.

7. In the reply filed by the respondent, a preliminary objection is taken to the maintainability of the present proceedings by contending that the respondent is a solvent company performing its normal business activity justly and bonafide. No amount is due and payable by the respondent to the petitioner. There are bonafide disputes . The petitioner has already filed a Suit No. 824/2002 pending in this court and the respondent is contesting the same. Since the claim is disputed and the respondent has substantial grounds of defense, this petition for winding up should not be entertained. There is also an objection to the effect that no proper affidavit verifying the petition for winding up has been filed.

8. In so far as defense on merits is concerned, it is stated that the petitioner has not disclosed correct facts. According to it, the parties were having business dealings since 1995 although para 5 of the petition gives an impression as to for the first time business dealings started in the year 1999 with placing of order by the petitioner to the respondent in March, 1999. It is stated that in March,1995, the petitioner started dealing with Omni Exports which was a firm of Mr.Arun K.Gupta, who is oneof the directors in the respondent. The respondent was not in existence at that time. However, because of the quality of their products and fair dealings, Omni Exports earned good name amongst the importers of hand tools. One Mr.Hassan from Colombia allied up Omni Exports to seek certain information with regard to the hand tools in March, 1995. The parties interacted with each other on phone. Omni Exports agreed to supply the material only if the entire payment was made in advance. Various ordersere placed from 1995 to 1998 on Omni Exports which were duly executed. In the meantime, the respondent was also incorporated in the year 1997 and the petitioner started placing orders on this company as well. These orders were also executed by the respondent without any problem.

9. In so far as two orders in question, which are the subject matter of present petition are concerned, the version of the respondent is altogether different. According to the respondent, the petitioner had placed an order for combination spanners of different sizes and specifications for a total value of US $ 1,00,000/- in March 1999. This order, as usual, was verbal on phone. The respondent on receipt of this telephonic order, sent a facsimile on 8th March, 1999 to the petitioner thereby confirming the order of US $ 1,00,000/- placed by them for combination spanners. The order was to be completed within six months One of the terms of the offer was that 100% payment would be made in advance, as usual. The respondent requested the petitioner to confirm the same. On the facsimile as sent, the petitioner wrote O.K., signed it and facsimiled it back to the respondent. On receipt of this confirmation, the respondent started procuring the material. They procured combination spanners of the given specifications and sizes as well as packing material and also got the cartons printed. The petitioner, however, had remitted a sum of US $ 68,675/- only and after deducting the bank charges, a sum of US $ 68,570/- was credited in the account of the respondent. In Indian Rupees a total sum of Rs. 29,39,373/- was credited. The respondent time and again called upon the petitioner to remit the balance balance. However, the balance amount was not forthcoming and that is why the shipment of the material, which the respondent had already procured, was withheld. Time for completion of the transaction was six months. The respondent had procured the material for Rs. 32, 27,340/-. Inspite of repeated requests, the petitioner failed to remit the balance payment. The material that had already been procured and was not shipped for want of balance payment started getting rusted. Since the material had started rusted due to the vagaries of weather and was of SAE mix specification which had no market in India, it had the disposed of as junk, after notice to the petitioner. Had the material been exported, the respondent would have got incentive by way of duty draw back which was @ 16%. Since the material was not exported, the respondent suffered loss as it did not get the export incentive. The loss of duty draw back was in the sum of Rs. 4,16,000/-. The respondent thus is entitled to claim an amount of Rs. 5, 26,406.25 equivalent to US $ 10,967/- from the petitioner for which it has already filed the counter claim claiming a decree of Rs. 5, 26,406.25 along with interest thereon @ 18% per annum and costs, against the petitioner company, in Suit No. 824/2002 which is pending in this court. Therefore, the petitioner is liable to pay this amount.

10. Thus the respondent has denied placing of the two orders in the manner alleged by the petitioner for which payments in question are made. Likewise, all other details leading to the aforesaid two purported orders, including bill of lading dated 7th May, 1999 etc. are denied.

11. After going through the pleadings, material on record and considering the respective submissions of both the parties, I am of the view that there are certain disputes between the parties about the true nature of the transaction between them. Both the parties have filed plethora of documents in support of their respective submissions. In fact some of the documents filed by the petitioner are the fax letters purportedly sent by the respondent. However, although as the respondent has admitted havingent letters, according to the respondent, text of those letters is not the same as given by the petitioner and it has filed copies of those very letters which are at variance with the letters produced by the petitioner. It would require proper evidence, including expert evidence, to decide as to which version of these letters is to be believed. In these proceedings, which are of summary nature such an exercise cannot be undertaken. I may state that the argument of the petitioner was that in the letters projected by the respondent, certain paragraphs are added which were not in the actual text sent to the petitioner and this manipulation is done taking undue advantage of the technology. The petitioner may even prove to be right ultimately. But it is not necessary or proper to go into this aspect in these proceedings which requires evidence, including evidence of experts. More importantly, the reason for not going into this aspect is that apart from disputes about the exact version of these letters, there are some other factors which compel me not to exercise discretionary jurisdiction in this matter and rather leave the parties to get their disputes decided in the civil suit which has already been filed and is pending in this court. Furthermore, according to the petitioner, the respondent has represented that against the first purchase order bill of lading dated 7th May, 1999 was sent. However, the petitioner has itself filed its fax letter dated 25th June, 2000 enquiring `is production completed for both? Is any have been shipped? Is there any B/L ready?'' If the respondent had represented that bill of lading dated 7th May, 1999 had been sent qua first order what was the occasion to enquire as to whether any bill of lading was ready on 25th June, 2000?

12. I had summoned the file of Suit No. 824/2002. The averments in the plaint are same as in the petition. The defense of the respondent herein also is on the same lines. In fact, the respondent has alleged that as the petitioner did not comply with the demand raised by it in its letter dated 16th February, 2001 calling upon the petitioner to pay the balance amount of US $ 31,325 and both the shipment could be made, the respondent was compelled to sell the entire consignment in the market as junk inasuch as tools ordered by the petitioner were SAE mix (American sizes which are not in metric system but are in inches) specifications and had no marketability in local market in India. The respondent, in these circumstances, has raised counter claim and rayed for a decree of Rs. 5,26,406.25 paise with interest and cost in its favor.

13. In the facts and circumstances of the case, It would, therefore, be appropriate for the parties to sort out their disputes, by leading evidence, in the said civil proceedings.

14. This petition is dismissed with aforesaid observations.