P And J Communication Devices Pvt. ... vs Asiatic Engineers (P) Ltd.
2004 Latest Caselaw 1148 Del

JUDGMENT

A.K. Sikri, J.

1. The petitioner in this case claims that it has to recover a sum of Rs. 9,69,350.89 paise, inclusive of interest, from the respondent company (hereinafter referred to as `the company'). This amount is for supply of commutators by the petitioner to the company for which the company had placed orders from time to time. Details of these supplies vide different invoices, thirty in number, are given in the petition and copies of such invoices are also filed collectively as Annexure P-3. These supplies are from 17th June, 1997 to 24th January, 1998. The total value of these supplies, according to the petitioner, was Rs. 7,03,520.89 paise. As the payment was not made, the petitioner is also adding interest for the delayed period at the rate of 24 per cent per annum thereby making a total claim of Rs. 9,69,350.89 paise till 31st March, 2000. According to the petitioner, when the payment was not made inspite of repeated demands, statutory notice dated 30th May, 1999 followed by reminder dated 30th June, 999 under under Section 434 of the Companies Act, 1956 (for short `the Act') was served upon the company calling upon it to pay the amount within 21 days. As this amount was not paid even after the lapse of statutory period, the petitioner wants that resumption be drawn that the company is unable to pay the debts and on this ground, present petition is filed seeking winding up of the company.

2. The case of the company, in nutshell, is that goods supplied were defective and, therefore, were returned. The petitioner's bank was informed about this rejection vide letters dated 25th May, 2001 and 11th July, 2001 and therefore, no question of payment arises. It is also averred that no statutory notice was received by the company and thus there was no question of replying the same. .

3. The place of orders and supply of these goods by various invoices, particulars whereof are given in the petition, are the facts which are not specifically denied. Although there is a vague denial thereof in the reply filed by the respondent, this may b e contradictory to the main defense, i.e. the goods were not up to the desired quality and therefore, were rejected. Further, these goods, according to the petitioner, were dispatched through various transport agencies and copies of lorry receipts are al o enclosed by the petitioner in support of these dispatches. Even during the arguments, Mr. Sharma, learned counsel appearing for the company did not specifically dispute non-receipt of the goods and the entire thrust of his argument was that therefore, were rejected. It may also be added here that the company admittedly sup-plied C Forms for these goods which would show that insofar as delivery of these goods is concerned the goods were of inferior quality, not supplied as per the requirement and, , these supplies were in fact made. Thus, the basic question which is to be determined is as to whether the goods were of inferior quality and there was any rejection thereof and whether the company was within its right to reject those goods. .

4. As already pointed out above, these supplies were made between 17th June, 1997 to 24th January, 1998 i.e. within the period of seven months. The petitioner sent letter dated 2nd March, 1998 stating that inspite of repeated reminders and phone calls th e petitioner was not getting the payment and there was no response from the company's end. Again, another letter dated 15th September, 1998 was sent wherein it was mentioned that the petitioner had not been receiving the payments inspite of reminders which was putting the petitioner into serious financial problems. Thereafter, the petitioner sent legal notice dated 30th May, 1999 followed by reminder dated 30th June, 1999. There is no reply to any of these communications. .

5. The company has, on the other hand, produced on record a letter dated 10th May, 1999 in which it was stated as under:

''This refer to your supplies of commutator to our concern in this regard we request you to depute any of your representative for accounts re-conciliation and also lifting of your rejections lying at our end. The same was also discussed by our Managing Director Sh. Harish Kumar during his visit to Bangalore.

You are requested to take this matter at priority as we are also keen to clear your account.''

6. This is, admittedly, first letter wherein the petitioner was told to reconcile the accounts and lift the rejected material. The last supply of the material was on 24th January, 1998. Various orders were executed between January, 1997 and January, 1998 , and supplies were effected. However on which dates these goods or part thereof were rejected, are not disclosed by the company. Therefore, this letter dated 10th May, 1999 written almost two years after the first supply and one and half years after t e last supply alleging some rejection may not be of much help to the company. Further, this letter would suggest that entire quantity was not rejected as the company had requested the petitioner to depute its representative for reconciliation of the accounts and lifting of rejections. Reconciliation of accounts would indicate that some of the goods were rejected and for remaining goods which were accepted by the company, reconciliation in the accounts was needed. However, neither in this letter nor thereafter the details were provided as to which goods and what quantity of goods were rejected. More significantly, nothing is brought on record to show any such rejection immediately after the supplies were made. Even in the reply, it is stated that th intimation was given to the bankers, namely, M/s Canbank Factors Limited with which the petitioner had discounted the bills, about the rejection vide letter dated 25th May, and 11th July, 2001. Such letters written almost three and a half years after the supplies may also be of no consequence in view of the legal position, I shall state sometime later. .

7. There is a bald denial of the receipt of two legal notices dated 30th May and 30th June, 1999. Along with these notices served through a lawyer, the petitioner has annexed originals of the registered receipts issued by the postal authorities, acknowledgment due cards as well as certificate of posting in support of the plea that the notices were sent through UPC as well. It is not denied that address of the company mentioned on the AD cards as well as certificates of posting is correct. It may also e mentioned that in one of the AD cards, there is stamp of the company as well. Therefore, it is clear that notices were duly served on the company. However, no reply was sent to these notices at that time and from this also presumption can be drawn against the company. .

8. Along with the additional affidavit filed by the company, certain letters are annexed which are of the year 1996 and prior to the dates of supplies. In these letters, some problem of supply of PJ-93 commutators instead of PJ-3 commutators is mentioned. The company has also annexed some letters of the year 1998 about the same problem. However, while on the one hand it can be argued that these may not be of much consequences in the absence of specific rejection of the goods in question, at the same time, it cannot be said that the allegation about the rejection of the goods is surfacing for the first time in reply to this petition. The correspondence on record shows that there was some dispute about the specifications of the commutators supplied and if the commutators supplied were not of the specifications, the question would be whether the company had right to reject these goods. Further, the company has placed on record certain letters of the dealers to whom the goods were supplied, complaint about the quality of the goods supplied by the petitioner. Therefore, it cannot be said that it is a case where plea is taken as an after thought or it is totally sham and moonshine. .

9. Keeping in view that some aspects weigh in favor of the petitioner and some in favor of the company, equitable order that can be passed in this case is to relegate the petitioner to civil proceedings on the ground that some dispute has been raised by the company and it would be necessary to have proper adjudication thereof after parties lead the evidence. At the same time, the company should be put to some terms having regard to the weak nature of defense ( I may hasten to add this is only a prima acie opinion). The ends of justice would, therefore, be met if the company is directed to deposit the amount in question in the court to secure the payment in case the petitioner ultimately succeeds.

10. This petition is accordingly disposed of with the direction that the company would deposit the amount claimed in the petition within six weeks from today with the Registrar General of this Court. The petitioner would be entitled to file civil suit for recovery and would be entitled to claim the benefit of Section 14 of the Limitation Act and it would for the civil court to take a final view in the matter after the evidence is led before it without being influenced by the observations made in this judgment. The civil court shall also be entitled to pass necessary direction about the amount which would be deposited by the company.

11. There shall, however, be no order as to costs.