TEXCON ENERGIES Vs. EURO COTSPIN LIMITED

JUDGEMENT

(1.) Texcon Energies a partnership concern through its partner Smt. Anieshia Vasudeva has filed this petition under sections 433 (e), 434 and 439 of the Companies Act, 1956 (hereinafter referred to as "the Act"), for winding up of Euro Cotspin Limited (hereinafter referred to as "the respondent-company") for its inability to repay its admitted debts. The respondent-company is a limited company duly incorporated under the provisions of the Act has its registered office at Chandigarh. It is stated by the petitioner that it had been supplying paper cones for a considerable period to the respondent-company and running account for the supply made and received was being maintained between the parties. The items supplied are taxable under the Sales Tax Act. The respondent-company was sending their statement of account for reconciliation of accounts throughout the periods 1996-97 and 1997-98. Lastly, on March 31, 1998, the statement duly signed by the respondent-company was duly received by the petitioner-company showing a sum of Rs. 7,68,100 payable to the petitioner. However, the petitioner had pointed out that, in fact, a sum of Rs. 8,95,553 was due and not Rs. 7,68,100 as stated by the respondent-company. These statements of account have been placed on record as annexures P-1 to P-2. The respondent-company issued a cheque for a sum of Rs. 1,00,000 on April 13, 1998, which was dishonoured on presentation and, thereafter, it has come on record that a bank draft for the said sum was issued in lieu thereof to discharge this limited liability.

(2.) From April 30, 1998, further material worth Rs. 3,13,560 was supplied. Copies of the bills, etc. , have been placed on record. Upon the final reconciliation of the accounts and taking into consideration the payments made by the respondent-company, the petitioner-company claimed a sum of Rs. 10,48,408 on account of principal amount while Rs. 5,56,398 was claimed on account of interest. In paragraph 14 of the petition the petitioner has stated as under : "14. That after the service of the notice the respondent-company has issued the following amounts : (i) Dated May 2, 1998, DD of Rs. 1,00,000; (ii) Dated may 2, 1998, credit note Rs. 1,925; (iii) Dated May 14, 1998, cheque for Rs. 15,000. In this manner the respondent-company paid only a sum of Rs. 1,15,000 and credit note of Rs. 1,925 credited in the account of the respondent-company and as such as on the date of the filing of the present petition, the principal amount due is Rs. 10,48,408 besides the interest, which was calculated up to April 30, 1998, as Rs. 5,56,398. "

(3.) The petitioner-company could not recover the amount despite the service of notice under sections 433 and 434 of the Act. Hence, the petitioner-company has filed the present petition for winding up of the respondent-company. The respondent-company received the notice issued on behalf of the petitioner and sent reply dated August 10, 1998, annexure P-34 to the petition. No dispute whatsoever was raised. The said reply reads as under : "dear Sir, Under the instructions of my client, Euro Cotspin Ltd. , Lalru Office, receipt of legal notice dated 16-5-1998, sent by you through your advocate Sh. Chetan Mittal, is acknowledge by my client. On receipt of further instructions from my client, I would revert to the subject for detailed reply. Yours faithfully, (Abnash Singh) Advocate. " In the reply filed before this court, now the respondent-company has raised mainly two issues. Firstly, that the material supplied by the petitioner was of a poor quality and the respondent-company had informed the petitioner of this fact, vide letter dated April 21, 1998, May 4,1998, and May 9, 1998, copies of which have been placed on record as annexures R-1 to R-3. Secondly, it is pleaded that by payment of Rs. 1,00,000 the entire account was settled and another sum of Rs. 48,120 was paid in cash towards the full and final settlement of the account and, as such, nothing is due to the petitioner and the winding up petition is not maintainable. Both the issued raised in the reply are a mere afterthought and are without any merit.