MADDI LAKSHMAIAH Vs. DUNCAN AGRO INDUSTRIES LTD

JUDGEMENT

(1.) This appeal has been preferred against an order dated September 13, 1990. It falls for this court to decide whether the direction sought for by the appellants in an application made under Section 392 of the Companies Act, 1956, was sustainable. In the present circumstances it would appear to me, that appellants Nos. 1, 2 and 3 have supplied tobacco to National Tobacco Limited. Duncan Agro Industries Limited and National Tobacco Limited referred to as DAIL and NTC in the judgment were amalgamated, by a scheme of merger which had been duly sanctioned by an order dated January 18, 1978, of the court. Thereafter, the appellants supplied tobacco to one TABAC impleaded in the petition and DAIL, on the understanding or arrangement according to the appellants that DAIL would be responsible for payment for the supplies, though invoices would be raised upon TABAC or the Tobacco Division of DAIL. A sum of Rs. 60,24,689.32 it had been contended by the appellants had become due and payable by DAIL to the appellants after giving credit for all earlier payments. Refusal, failure and neglect by DAIL to pay in spite of repeated demands led the appellants to make an application under Section 392 of the Companies Act in this court and pray for a direction on DAIL to pay the dues of the appellants and in default an order be made to wind up the business of DAIL. The hon'ble judge in his order, dated September 13, 1990, from which this appeal has been preferred, has recorded in detail the submissions of counsel for the parties, and considered the law applicable in the matter, together with a decision of the Supreme Court which had been cited before him.

(2.) Admittedly, the reason for the appellants to come to the court was to obtain payment of their alleged claim. The appellants had also alleged that since the amalgamation, they had supplied tobacco to TABAC or DAIL on the basis of an "understanding or arrangement" that DAIL would be responsible for payment for the supplies. It was not obviously an admitted position. In other words, it would be necessary for the appellants to prove their alleged claim. Section 392 of the Companies Act, 1956, provides :

(3.) In the case of S.K. Gupta v. K. P. Jain [1979] 49 Comp Cas 342 the Supreme Court held (page 351) :