ARHAM ENGINEERS PRIVATE LIMITED Vs. CEPHAM ORGANIC LIMITED

JUDGEMENT

(1.) Arham Engineers Pvt. Ltd. has sought the winding up of Cepham Organics Ltd. (hereinafter called the 'company') on the ground, that the company invited quotation from the petitioner regarding air conditioning work on the companies project for manufacturing Ampicilin, Sodium Steryl at Kundli. The tender submitted by the petitioner, for execution of the said work, was separated into two parts; one for supply of equipment and accessories for exhaust and fresh air system and the other for the installation of said equipment. The first part of the contract was awarded to the petitioner. On acceptance of the offer, the company paid an advance ofRs.50,000.00 to the petitioner. The petitioner executed the work and submitted the invoices from time to time. On completion of the contract, the petitioner submitted its final bill/invoice for Rs.89,804.66 p., balance as against the total bill of Rs. 1,79,804.76 p. the company cleared the bill to the extent of Rs. 1,78,764.75 p.there by leaving a principal sum of Rs.88,764.75 p. due. This outstanding due is payable by the company. The company infact confirmed the credit balance. The company also issued Form 'C' in respect of the material supplied by the petitioner. The petitioner had been calling upon the company to clear the entire outstanding amount and ultimately served the statutory notice under Section 434 of the Companies Act calling upon the company to pay the principal amount plus interest at the rate of 18% p.a. When the company inspite of notice did not make the payment, hence the petition.

(2.) The show cause notice was issued to the respondent, who in response to show cause notice, filed the reply and took up the plea that the petition is barred by time. As the acknowledgement of debt is dated 31st March, 1990 the period of three years has to be counted from 31st March, 1990. The petition having been filed on 17thMay, 1993,on the face of it is barred by time. On merit, it was contended that since the claim is barred by time, therefore, the respondent was not liable to make any payment.

(3.) Mr. Arun Kathpalia, appearing for the petitioner, contended that the period of limitation is to be counted from the date the confirmation was signed by the respondent and not from the date the balance was struck. The confirmation of balance as on 31st March, 1990 was signed in this case by the authorised representative of the respondent on 6th September, 1990, or thereafter. Hence limitation is to run from 6th September, 1990. On the other hand, Mr. Chaudhary, appearing for the respondent, contended that since the debt was due and payable from 31 st March, 1990 the credit balance was also struck on 31 st March, 1990, the mere confirmation of the same on 6th September, 1990 would not extend the limitation. It is apparent that after 31st March, 1990 no account continued nor any transaction took place. Hence the period of limitation has to be counted from 31st March, 1990.