High Court of Judicature at Allahabad
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In The Matter Of M/S Shaila Crown Pvt.Ltd. - COMPANY PETITION No. 40 of 1996  RD-AH 4253 (17 October 2005)
Company Petition No.40 of 1996
M/s Coates of India Ltd. Vs. M/s Shaila Crown Pvt. Ltd.
Hon. Sunil Ambwani, J.
Heard Shri P.K. Mukerji for the applicant Company and Shri Raj Nath Shukla for the Official Liquidator. No one appears for the respondent Company.
This creditor's winding up petition was filed to wound up M/s Shaila Crown Pvt. Ltd. for failing to pay Rs.3,88,624/- as cost of the printing ink supplied to the respondent Company and the interest of Rs.93,274.08 at the rate of 24% per annum upto 31.8.1996, despite statutory notice dated 8.5.96.
The Company Petition was directed to be advertised on 17.9.97 and that by an order dated 28.11.97 it was directed to be wound up by the Court. On an application, stating that the notices were not served as they were sent to a wrong address and that the respondent Company were not aware of the proceedings, winding up order dated 28.11.97 was recalled by this Court on 6.4.99.
The respondent Company has, thereafter, filed a counter affidavit of Shri Sanjeev Chandra Prakash, the Executive Director of the respondent Company authorised to file the reply.
In the counter affidavit the respondent Company has alleged in paragraph 4 that the applicant Company supplied ink without any order from the respondent. Letters were sent by the respondent Company on 26.3.91, 22.7.91, 30.8.91, 13.9.91 and 31.3.92 informing the Company that the supplies made by them were without any purchase orders. Further it is stated in paragraph 6 that various consignment of ink were below standard and not according to the specifications, as a result of which the consignments were rejected and debit notes were issued/ raised by the respondent Company. These facts was duly informed by letter dated 18.10.94.
In para 8 it is stated that M/s Jaya Food Industries Ltd., M/s Maha Dev Shoap Industries and M/s T. Series Group rejected the finished goods on account of poor quality of ink and that the respondent Company suffered loss to the tune of Rs.2,91,327.20.
The applicant Company had denied these allegations in reply of Shri S. Sarkar to the counter affidavit. It is alleged that there is no bonafide dispute. The letters detailed in para 4 of the counter affidavit were manufactured to mislead the Court. The applicant Company supplied printing ink against invoices, which were duly acknowledged and that cheques detailed in para 9 issued by the respondent Company were dishonoured on presentation by the applicant Company.
The transactions in question were made in the year 1991. There is absolutely nothing in the winding up petition to show that the respondent Company is insolvent or is unable to pay its debts. Annual report and the balance sheet of the respondent Company has not been placed on record. From the contents of the affidavit I find that there is bonafide dispute with regard to the payment and that in any case, there is no acknowledgment from the respondent Company of the dates, to explain the period of limitation for recovering the amount due under the invoices. Su;;lies as it is apparent were made in the year 1991. The dishonour of cheques raises a strong presumption that the respondent Company is unable to pay its dues, however, since in the present petition they have discharged burden in showing that supplies cannot be made without any orders and were of inferior quality, the dispute requires adjudication from the competent Civil Court that these amounts were actually due to be paid by the respondent.
For the aforesaid reasons, I find that there is bonafide dispute with regard to the payment and the Company Petition cannot succeed.
The Company Petition is accordingly dismissed.
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