NEPA LTD Vs. JNANAMANDAL LTD

JUDGEMENT

(1.) By means of this company petition, the petitioner M/s. Nepa Ltd. ("petitioner" in short) has sought the winding up of the respondent-company M/s. Jnanamandal Ltd. (respondent-company) under Section 433(e) and (f) read with Section 439(b) of the Companies Act, 1956 ("the Act" in short), on the ground that the said respondent-company has failed to pay its debts despite the receipt of the statutory notice ; hence, it deserves to be wound up.

(2.) The petitioner's case in brief is that it is a Government company within the meaning of Section 617 of the Act and is engaged in the business of manufacture and sale of newsprint which is a controlled commodity and covered by the Newsprint Control Order, 1962. The petitioner has been supplying newsprint under the entitlement certificate to the respondent-company for the past several years against its quantity allotted by the Registrar of Newsprints of India under the Newsprint Control Order, 1962. The payments for such supplies which were made either by rail or road transport as per the orders of the respondent were made against the invoices accompanied by despatch documents presented through the banks or direct for payment on due dates as agreed between the parties. Between the period October 19, 1992, to June 11, 1993, the total amount which fell due against the supplies made to the respondent-company was to the tune of Rs. 2,43,58,920. The respondent though assuring that they would be making the payments had defaulted in paying the same. Therefore, ultimately the petitioner had to stop the supplies. Request was being made repeatedly to the respondent to make the payments and for the said purpose registered letters, telex and fax messages were sent to the respondent, personal approaches were also made but as the payment was not received a registered notice of demand was served on May 16, 1994, on the said respondent. Vide their reply dated June 9, 1994, sent through their advocate, the respondent-company for the first time and as an afterthought stated therein that the newsprint which was sent to them contained a large quantity of waste paper for which the petitioner had agreed to give discount to the tune of 40 to 50 per cent. but as no discount has been given, the respondent was not liable to make payment. The petitioner sent a reply through their counsel on July 2, 1994, denying that any waste material was sent or there was any such agreement to give discount and admitted the payment of Rs. 2,43,58,920 from the respondent-company. Since no payment was received a statutory notice dated July 23, 1994, was served on the respondent-company. Despite the same, no payment was made and neither was any reply sent to the said notice. Consequently, the present petition was filed before this court.

(3.) On notice being issued to the respondent it put in appearance and filed a counter affidavit wherein it inter alia denied that the amount claimed by the petitioner in its notice was due against the respondent. It was alleged that prior to October 19, 1992, there was no dispute regarding the bills between the parties but the dispute began as various consignments of the newsprint reels which were sent to the respondent were substandard, rejected material and very old. On the said facts being brought to the notice of the petitioner they had agreed to give a discount to the tune of 40 per cent. on the bill amount raised for the sub-standard and rejected newsprint sent to them. However the said assurance was not complied with and wrong bills without making the deductions were sent. According to the respondent after adjusting the amount of discount the amount which will be payable by the petitioner will be of about Rs. 3 lakhs odd. It was also averred that such disputed questions, which pertain to the accounts between the parties, could not be decided in the present winding-up petition which has been filed mala fide.