1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. COMPANY PETITION NO.548 OF 2009 M/s.Entremonde Polyecoaters Ltd. ..Petitioner. Vs. M/s.Alpha Foam Limited ..Respondent. .... Mr. J. Chandran i/b M. Janardhanan for the Petitioner. Mr. Yatin R. Shah for the Respondent. .... CORAM : DR. D.Y. CHANDRACHUD, J. 6th November, 2009. P.C. : 1. The Petitioner sold, supplied and delivered diverse quantities of P.U. Foam, Aluminum foil to the Respondent in pursuance of purchase orders placed by the Respondent. During the financial year 2007-08 goods of a total value of Rs.8,41,693/- were supplied. The Respondent paid an amount of Rs.5 lacs on 9th July, 2008 leaving a balance of Rs.3,41,693/-. The Petitioner has claimed interest on the outstanding. On 27th December, 2008 a statutory notice under Sections 433 and 434 of the Companies Act, 1956 was 2 addressed to the Respondent. In response thereto a reply was addressed by the Respondent claiming that certain debit notes have been raised on account of ‘bad quality’. A letter was addressed by the Petitioner to the Respondent denying that any debit notes have been raised by the Respondent. According to the Petitioner, the Respondent was to be allowed discount of 11% subject to payments being made within the stipulated time. A petition for winding up has been filed. 2. An affidavit in reply has been filed to the Petition. 3. At the hearing of the Petition, two defences have been urged on behalf of the Respondent. Firstly, it has been submitted that the Petitioner has not accounted for the debit notes raised by the Respondent and that according to the account maintained by the Respondent only an amount of Rs.2,266/- is due to the Petitioner. Secondly, it has been urged that the Respondent was entitled to a discount of 11% over the agreed rate of Rs.258/- per sq. mtr. and reliance has been placed on various credit notes which were issued by 3 the Petitioner in respect of certain invoices. The credit notes are at Exhibits A-1 to A-6 of the reply. 4. Insofar as the issue of the debit notes is concerned, it is apparent from the statement which is annexed at paragraph 7 of the Petition that the goods were supplied by the Petitioner under diverse bills between 31st March, 2008 and 30th July, 2008. No allegation that the goods were defective was made at any stage prior to the reply addressed by the company to the notice dated 27th December, 2008. The goods admittedly were utilized by the Respondent. Counsel appearing for the Respondent has fairly stated before the Court that the Respondent has no documentary evidence to establish that the debit notes were transmitted to the Petitioner or that matter they were acknowledged by the Petitioner. In the circumstances, the defence that certain debit notes were raised on the ground that the goods were not of the requisite quality is totally lacking bonafides and is only an afterthought to defeat the Petition for winding up. 4 5. The second defence as already noted is that the Petitioner ought to have given a discount of 11% over the agreed rate of Rs. 258/- per sq. mtr. According to the Petitioner a discount was allowable only where payments were made within the stipulated period. However, to my mind even if a discount of 11% was to be allowed on the balance outstanding of Rs.3.41 lacs, the Respondent will still be liable to pay an amount of approximately Rs.3 lacs which would be exclusive of interest. In the circumstances, in order to enable the company to secure the claim of the Petitioner, it will be appropriate to grant it an opportunity to deposit an amount of Rs.3 lacs in Court. The Petitioner would then have to be relegated to the remedy of filing a suit for the recovery of its dues and the amount of Rs.3 lacs deposited by the company would have to be transferred to the credit of the suit. In the event that the Respondent fails to deposit the amount of Rs.3 lacs within the period stipulated hereinafter, the Petition for winding up will stand admitted. In the circumstances, the following conditional order is passed : i) The Respondent shall within a period of six weeks from today 5 deposit an amount of Rs.3 lacs with the Prothonotary and Senior Master. Upon deposit of the aforesaid amount, the Petition for winding up shall stand dismissed; ii) Upon intimation by the learned advocate for the Respondent to the learned advocate for the Petitioner that a deposit has been effected, the Petitioner would be at liberty to file a suit for the recovery of its dues. The amount that has been deposited in pursuance to clause (i) above shall then stand transferred to the credit of the suit. The Petitioner would be at liberty to make an appropriate application before the Learned Trial Judge for the withdrawal of the amount and any such application, it is needless to add would be considered by the Learned Trial Judge; iii)The advocate appearing on behalf of the Petitioner shall furnish an intimation to the Prothonotary and Senior Master of the factum of default, in which event the Petition shall stand admitted and made returnable on 21st January, 2010. The Petitioner to advertise the Petition in two local newspapers viz. 6 Free Press Journal, Maharashtra Times and Maharashtra Government Gazette. The Petitioner to deposit Rs.10,000/- with the Prothonotary and Senior Master towards the publication charges. iv) In the event that no intimation is furnished, the registry shall proceed on the basis that the amount as directed has been deposited. There shall be an order in the aforesaid terms. *****