DURGAPUR PROJECTS LTD Vs. STATE

JUDGEMENT

(1.) This is a winding-up petition which was presented on 11th June, 1979, and direction was given for serving the notice along with a copy of the petition on the company. The company appeared and took direction for filing affidavit.

(2.) The petitioning creditor's claim is for price of goods sold and delivered. It appears that previous to the present purchase order being placed by the company with the petitioning creditor there were negotiations for supply of a settled quality of goods but the said contract was cancelled. Be that as it may, those are not relevant or admissible for the purpose of the present application. The letter dated 19th October, 1978, by which the company asked the petitioning creditor to deliver 200 mm. of Conveyor Belts which were urgently required by the company and the formal purchase order was to be handed over to the petitioning creditor on or about 21st October, 1978, is set out hereunder, copy of which is annexed to the petition and is at p. 11 of the petition :

(3.) On the same date, it appears, the petitioning creditor handed over a railway receipt No. 655909 dated 19th June, 1978, to the company for which a receipt was granted. It appears in the copy that instead of 19th June, 1978, it is wrongly written as 19th June, 1976. The same was duly acknowledged by the company on the 19th October, 1978, being the date of the letter which has been set out. Thereafter the company placed the formal order dated 7th December, 1978, for the supply of the said goods by the petitioning creditor to the company. There is no dispute that the company received the said goods and in fact by a goods receipt note duly issued by the company dated 21st December, 1978, the company certified that the above 200 mm. conveyor belts were "certified that the above materials have been taken into custody of the stores department in good condition duly checking up, sound and weight in conformity with the purchase order dated 7th December, 1978". A copy of the said goods receipt note with the said certificate is annexed to the petition and is at p. 18. Thereafter the petitioning creditor duly submitted its bill to the company for the price of the said goods together with sales tax and other charges amounting to Rs. 64,958.16. A copy of the said bill is annexed to the petition and is at p. 19. The company having failed to pay the price of the goods the petitioning creditor by several letters dated 29th January, 1979, 2nd February, 1979, 28th February, 1979, demanded payment of the said bill being the price of the said goods and the said letters were duly acknowledged being received by the company on 1st March, 1979, from its office at Calcutta, at No. 46-C, Chowringhee Road. The company never cared to give any reply and ultimately by a statutory notice dated 12th April, 1979, through its advocate on record the petitioning creditor caused a notice under Section 434 of the Companies Act served on the company for the price of the goods sold and delivered together with interest thereon. It is then for the first time in reply dated 10th May, 1979, to the said statutory notice that the company through the same officer, who entered into the contract with the petitioning creditor as evidenced by the said letter dated 17th October, 1978, raised a question that the goods were not acceptable to the company as the quality was very bad (according to) the alleged performance report submitted by the senior maintenance engineer, boiler, which is referred to in the said letter. Subsequently by another letter dated 12th May, 1979, the company through the secretary replied to the advocate on record of the petitioning creditor that the goods were not according to the specification and have been rejected and referred to the clause in the contract regarding acceptance and rejection and that the decision of the management would be final and binding on the parties. Therefore, the only dispute in this case, as raised by the company, is that the goods are not according to the specification and have been rejected by the company and their decision was final in terms of Clause 12 of the purchase order.