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Judgment
V.S. Aggarwal, J.—This is a petition filed by S. N. Goenka & Co. (P) Ltd. (for short, ''the petitioner'') u/s 439 read with sections 433 and 434 of the Companies Act for winding up of the respondent company (Sharomani Alloys & Steel Castings (P) Ltd.).
The relevant facts are that the petitioner was importing heavy melting scrap from Mauritius. It was to be supplied by G. Runghen and Company. The consignment was shipped and imported to India. The respondent company entered into three High Seas Sale Contracts within the petitioner company on 10 November, 1996, for purchase of heavy melting scrap. The respondent company was to pay for the custom duty, fine, penalty, port, wharfage, demmurage, transportation and other incidental charges. The respondent company got cleared the above consignment and had taken all delivery of the consignment of heavy melting scrap. It utilised the raw material and availed MODVAT under rule 57 of the Central Excise Rules.
It is claimed that the respondent company is liable to pay a sum of Rs. 11,49,050 to the petitioner company for heavy melting scrap. No payment has been made. Interest has also been claimed at the rate of 18% per annum from 1 May, 1997. In all, it is stated that Rs. 15,83,708 is due which has not been paid despite notice.
Earlier, the respondent had been proceeded ex parte and the petition had been admitted. Subsequently, the said order had been recalled.
In the written statement filed, the petition has been contested. It has been pleaded that payment has already been made through Surinder Nanda of Nanda Brothers, Loha Mandi, Naraina, New Delhi. It was Surinder Nanda who has actually been dealing with the respondent company. It was explained that Nanda Brothers had approached the respondent for supply of heavy melting scrap to be imported from Mauritius. The heavy melting scrap from Mauritius was to be supplied by Nanda Brothers to the respondent company for manufacturing of steel ingots non alloys. Three invoices were sent by the petitioner out of five. The respondent had got the goods released from port authorities. The payment in entirety had been made except Rs. 1,40,919 which is due to be paid to Nanda Brothers. Special attention has been paid by mentioning the fact that the contract is for a sum of Rs. 11,49,050, whereas the invoices pertained to a sum of Rs. 13,07,599.
It was pleaded that the respondent company was having correspondence with the petitioner regarding supply of heavy melting scrap. Copy was endorsed to Nanda Brothers who are the main persons for supply of the same. It was stated that the respondent is not aware of the transaction between the petitioner and Nanda Brothers.
Principle of law in this regard is well settled. The Supreme Court in the case of Madhusudan Gordhandas and Co. Vs. Madhu Wollen Industries Pvt. Ltd., categorically held that petition should only be admitted, if the defence is not likely to succeed. In paragraph 21, the Supreme Court held -
"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 SL 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 quantify the debt precisely (See Re, Tweeds Garages Ltd. 1962 Ch 406). The principles on which courts act are first that the defence of the company is in good faith and one of substance; secondly, the avouring Nanda Brothers, New Delhi, for rupees five lakhs only, drawn on Oriental Bank of Commerce, New Delhi, a part payment of your consignment made by us on behalf of you. A photocopy of the demand draft is attached herewith for your ready reference and confirmation. Please issue us a credit note or journal transfer note against this payment made by us on behalf of you".
Thanking you,
Yours faithfully, For Sharomani Alloys & Steel Castings (P) Ltd. Sd. ...................... Director"
In similar terms is the letter, dated 6 February, 1997. Annexure R-15, followed by the letter copy of which is Annexure R-16, dated 9 February, 1997. These letters clearly show that petitioner even was informed that payment is being made for the goods to Nanda Brothers. Copy of the same was being endorsed to Nanda Brothers.
As mentioned above, though it appears that there was a contract between the parties, but at this stage, without expressing any opinion and embarrassing either party, it can conveniently be stated that defence cannot be outright rejected. It would be appropriate that this controversy as to in what circumstances the payment, if any, which was made to Nanda Brothers should be investigated. The defence cannot be outright rejected to be sham.
There is another way of looking at the matter. The respondent claims and asserts on the basis of the documents referred to above that it has made the payment to another person. In these circumstances, even by adjudging as to if the respondent is unable to pay the debts on commercial basis, still it cannot be held that ingredients of section 433(e) in the facts of the present case would be satisfied. Consequently, at this stage, the petition does not require to be admitted.
For these reasons, the petition fails and is dismissed. It is clarified that nothing said herein should be taken as any expression of opinion on merits of the matter, if the petitioner chooses to file the civil suit.