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Judgment
Anand Byrareddy, J.—The present application is filed in the following back ground:-
The Mysore Kirloskar Limited was ordered to be wound up vide order dated 1.4.2004 in Company Petition No. 166/2001 and connected petitions. The earliest of those petitions was filed on 14.3.2000. The Official Liquidator (OL) was appointed as the liquidator of the company.
It is stated that the respondent was having trade transactions with the company in liquidation. And that as per the Statement of Affairs filed u/s 454 of the Companies Act, 1956 (Hereinafter referred to as the ''Act'', for brevity) and as per the books of account maintained in the regular course of business by the ex-directors of the company, it is claimed that the respondent was indebted to the company in a sum of Rs. 9,81,475/-, as on 31.5.2000. The said amount is sought to be recovered with interest. A total sum of Rs. 16,58,693/- is claimed.
The respondent has entered appearance and contended that the respondent had placed a Purchase Order bearing No. 790053 dated 30.9.1999 on the applicant-Company for supply of Vertical Machining Centre, Model VMC-40 with accessories and Speed Reducer.
The applicant-Company accepted the Purchase Order and raised an invoice on the respondent, bearing No. 01385 dated 29.3.2000 for Rs. 31,06,480/-. The respondent paid advance against the submission of a Bank Guarantee of Rs. 3,86,250/- being 15% of value of the said machineries, through cheque bearing No. 045666 dated 15.10.1999 drawn on Citi Bank, N.A., Camp, Pune.
It is contended that the Purchase Order was accepted by the applicant-company vide its letter dated 27.3.2000 on the following terms and conditions:-
A. Respondent to release Rs. 1,48,093/- in favour of M/s. Patani Brothers, Mumbai, through Demand Draft, to receive the Speed Multiplier and collects.
B. Respondent to release Rs. 4,12,000/- towards payment of 16% excise duty and Rs. 1,19,480/- towards 4% CST.
C. Respondent to release balance amount of Rs. 2,54,480/- after the receipt of machinery.
D. Respondent shall adjust Rs. 14,86,250/- from the sales invoices outstanding on behalf of the applicant-Company and also from Precision Tooling Systems Limited as per original order terms.
E. Balance Rs. 3,00,000/- shall be paid within 30 days of installation of the machineries subject to deduction of applicable liquidated damages. (This Clause was inserted by the respondent vide its letter dated 27.3.2000).
The respondent, vide its letter dated 27.3.2000, accepted the terms and conditions of the applicant-Company and issued a cheque bearing No. 049329 dated 28.3.2000 drawn on Citi Bank, N.A., Camp, Pune, amounting to Rs. 5,31,480/- towards payment of Excise duty and CST and requested the applicant-Company to release the machinery immediately.
The applicant-Company, vide its letter dated 10.4.2000, supplied some of the machineries to the respondent and accepted the short supply of machineries. In view of the agreed terms and conditions, the respondent issued two cheques drawn on Citi Bank, N.A., Camp, Pune, bearing Nos. 50531 and 50930 dated 8.5.2000 and 31.5.2000, amounting to Rs. 1,21,250/- and Rs. 50,000/-, respectively, to the applicant-Company.
It is contended that the applicant-Company vide its letter dated 29.3.2000, supplied the balance machineries to the respondent and further requested the respondent to release the balance amount of Rs. 2,54,407/- immediately. The respondent, after receipt of machineries, issued a cheque bearing No. 50002 dated 11.4.2000 amounting to Rs. 2,54,407/- to the applicant-Company.
The respondent, in view of the request and conditions mentioned by the applicant in its letter dated 27.3.2000, adjusted Rs. 14,86,250/- towards book adjustment. It is further contended that the respondent also paid Rs. 1,48,093/- to the applicant''s sub-supplier M/s. Patani Brothers, Mumbai, vide its cheque bearing No. 242333 dated 28.3.20.00 drawn on Citi Bank N.A., Camp, Pune.
Further, in view of the delay caused by the applicant-Company, in the supply of machineries to the respondent, the respondent had to undergo huge loss in production, which lead to loss of business to the respondent. Under these circumstances, the respondent had no other alternative other than quantifying its loss from the applicant-Company and deducted the balance amount of Rs. 1,28,750/- as liquidated damages from the applicant-Company, as per the terms of the Purchase Order, leaving no amounts due to the applicant-Company.
The applicant-Company under liquidation represented by the OL is relying only on the entry made in the statement of affairs submitted by one of the ex-director of the applicant-Company and it is pertinent to note that the OL has not produced any relevant document to substantiate his claim against the respondent. It is well settled that when the applicant makes a claim against the respondent, the same has to be substantiated by producing the relevant materials (Shivamoni Steel Tubes Limited Vs. Tamil Nadu Electricity Board, ILR 2006 KAR 3113).
The respondent has indicated in tabular form the summary of payments made to the applicant.
The respondent has produced the supporting documents in respect of its defence.
The learned counsel for the OL would not seriously dispute the defence set up, except the claim towards deduction of liquidated damages. Hence, it is to be seen whether the OL has substantiated the claim towards this amount by demonstrating that such deduction by the respondent was not justified. In this regard, it was necessary for the applicant to have tendered cogent evidence to establish that the respondent was neither entitled to such damages or that the contract did not enable the respondent to unilaterally claim the same. There is no effort made in this direction. In that view of the matter the application is dismissed.