Application for recovery of dues under the Companies Act was dismissed due to a bona fide dispute over good receipt and improper service of statutory notice.
Petition dismissed; applicant relegated to file a suit in the matter.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY PETITION NO.1037 OF 2001
In the matter of the Companies
Act, 1956
And
In the matter of Tej Gaurav
Farms Limited, having their
regd. office at Tej Gaurav
Building, Telang Road, Matunga
(Central), Bombay - 400 019.
M/s.Quality Plywood & Hardware
287, Safalya, S.K. Bole Road
Near Portuguese Church, Dadar
Bombay - 400 028 ... Petitioners
Mr.P.B. Kapadia for Petitioners
Mr.K.Mody i/b V.Mistry & Co. for Respondents
CORAM: SMT.NISHITA MHATRE, J.
DATED: DECEMBER 22, 2005
P.C.:
. The Petitioners have filed the present Petition
claiming an amount of Rs.83,081.40 as the "admitted"
amount due and payable by the Respondent-Company on the
basis of the invoice dated 30.4.1999. Interest @ 18%
per annum is also demanded from 1.6.1999 upto the date
of filing of the Petition. Accordingly, a total amount
of Rs.1,12,910/- is payable to the Petitioners for the
plywood supplied to the respondent-company. Copies of
: 2 :
the delivery challan No.090 dated 30.4.1999 and bill
No.039 dated 30.4.1999 for an amount of Rs.831.018.40
are annexed to the Petition. The petitioners claim that
the goods have been sold and delivered to the
Respondent-company. According to the Petitioner, the
respondent-company has received the goods and there is
an endorsement on the challan/invoice indicating that
the goods have been received. On the reverse of the
challan, there is an endorsement with a rubber stamp
"checked and verified, time-in: 7.30am date: 1.5.1999,
signed- security officer, date - 1.5.1999". A statutory
notice was issued to the Respondent-company on 11.5.2001
calling upon the Company to pay Rs.83,018.40 together
with interest. A copy of the registered post A/D card
bearing an acknowledgement is also annexed to the
Petition, which according to the Petitioner is the
acknowledgement of the receipt of the statutory notice
by the Respondent-Company. The Petitioner has also
annexed to the Petition a xerox copy of the proof that
the statutory notice was sent Under Certificate of
Posting to the same address as the address borne on the
registered post.
2. An affidavit has been filed by the respondents
denying that any amount was due and payable to the
Petitioner. According to the Respondents, they had not
: 3 :
received any goods from the Petitioner-Company. Nor
have they received the statutory notice and, therefore,
according to the Petitioner, the claim in the Petition
is false. The respondents have also annexed a letter
issued by one S.M. Furniture indicating that payment
for the plywood used by S.M. Furniture for the
carpentry work carried out on the Respondents’
establishment in Mahabaleshwar was made to the
Petitioners and an amount of Rs.1,24,767.70 was paid to
them on 15.3.1999. No further payment was required to
be made, according to S.M. Furniture.
3. Mr.Kapadia, for the Petitioners, submits that
the respondents have falsely denied that the goods were
delivered to their establishment. These goods were
delivered to the Respondent Company’s establishment at
Mahabaleshwar and were received by and on behalf of the
respondents on 30.4.1999, according to the learned
Advocate. He submits that the bill dated 30.4.1999
indicates that an amount of Rs.83,018.40 was due and
payable to the Petitioners. He then points out that the
annexure 1 to the affidavit in reply to the petition
shows that besides the amount of Rs.1,24767.70, the
respondent-company was expected to pay a certain balance
amount which the respondent-company was well aware of.
He points out that on 5.4.1999, which is the date on the
: 4 :
document annexed to the affidavit, an amount of
Rs.93,898.70 was the balance amount payable to Quality
Plywood and Jolly Timber Mart. According to him, this
document which is annexed to the affidavit of the
respondents indicates that there was a balance amount
payable to the Petitioner and that amount was
Rs.93,898.70. He then submits that though the statutory
notice may not have been received by the respondents, it
has been received by its sister concern and that would
be "good service". Besides that according to the
learned advocate, a copy of the notice was served Under
Certificate of Posting which also would amount to good
service. He submits that there is no reply to the
statutory notice and hence, the Petition ought to be
allowed.
4. Mr.Mody, appearing for the Respondent-Company,
denies that the respondent-company ever received the
goods mentioned in the invoice No.090 from the
Petitioners. He submits that there is no endorsement on
the invoice indicating that the goods were received by
the respondent-company. The bill dated 30.4.1999 also,
according to Mr.Mody, does not bear any indication that
it was received by the respondent-company. He submits
that the reliance placed by the Petitioners on the
summary statement dated 5.4.1999 annexed to the
: 5 :
affidavit of the respondents does not support the case
of the Petitioners. Mr.Mody points out that the summary
is dated 5.4.1999 and shows that an amount of
Rs.93,898.70 was payable to M/s.Quality Plywood, the
Petitioners herein and Jolly Timber. The bill dated
30.4.1999 is for an amount of Rs.83,018.40. Therefore,
this summary dated 5.4.1999 could not contain the figure
for the bill of 30.4.1999. He submits that the xerox
copy of the acknowledgement due card annexed to the
Petition seeks to demonstrate that the statutory notice
was received at the registered office of the company.
However, it does not bear any endorsement for and on
behalf of the company. He submits that the statutory
notice must be served at the registered office of the
Company by Registered Post acknowledgment due; sending
it through Under Certificate of Posting would not
suffice.
5. In my opinion, the company has raised a bonafide
dispute regarding receipt of the goods. The documents
annexed to the petition do not bear the signature of the
Respondent-Company’s representative or the rubber stamp
of the company. Therefore, it would be difficult to
assume that the Company has received the goods from the
Petitioner without there being any evidence on record.
This position would be clear only when oral evidence is
: 6 :
led and not in a summary proceeding such as the present
one. In my view, the petitioners would have to be
relegated to filing a suit to claim the amount.
6. Furthermore, the endorsement on the
acknowledgement due shows a rubber stamp of Suman
Motels. This in my view, would not be good service of
the statutory notice. The mere fact that Suman Motels
is a sister concern of the Respondent-Company would not
necessarily mean that there is compliance with sections
433 and 434 of the Companies Act. Therefore, once the
statutory notice has not been served, as required by
law, it would be difficult to allow the petition.
7. Apart from this, the reliance placed by the
learned Advocate for the Petitioners on the summary
statement dated 5.4.1999 annexed to the affidavit of the
respondents is also of no avail to the Petitioners. The
summary dated 5.4.1999 indicates that Rs.93,898.70 was
the balance bill for the material supplied by Quality
Plywood, the Petitioners herein and Jolly Timber Mart.
However, this would not cover the bill dated 30.4.1999
on which basis the present petition has been filed.
There is therefore, no admission of the debt as is
: 7 :
sought to be contended on behalf of the Petitioners.
Therefore, in my view, the petition must be dismissed
and the Petitioners have to be relegated to file a suit
in the matter.
8. Petition is accordingly dismissed.
3 issues framed by the court
Whether the petition for recovery of dues under the Companies Act should succeed where the receipt of goods is disputed and statutory notice was not properly served.
Whether a summary statement in the company's affidavit admitting a different debt amount constitutes admission of the specific debt claimed in the petition.
Whether service of a statutory notice on a sister concern via Under Certificate of Posting constitutes valid service on the respondent company.
2 provisions across 2 enactments
M/s.Quality Plywood & Hardware
Tej Gaurav Farms Limited
NISHITA MHATRE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court