Partly allowed

Hindustan Organic Chemical Ltd. v. Sriman Organic Chemical Industries Ltd.

Bombay HC4 Sept 2008CP/779/2000

Case brief

AI extract

What is this about?

In a winding up petition, the court addressed a bona fide dispute over the quality of chemicals supplied by the petitioner. The court directed the respondent to deposit Rs.60,00,000 and conditioned dismissal of the petition on this deposit and the filing of a civil suit, avoiding premature termination of the company.

What did the court decide?

Directed respondent to deposit Rs.60,00,000 within eight weeks; on deposit, petition dismissed and suit to be filed within four weeks.

and 434 of the Companies Act, 1956. According to the petitioner, they supplied Benzene to the respondent in pursuance of an order for 600 metric tons for an aggregate price of Rs.1,00,80,000/-. The cheque issued by the company of the value of Rs.93.5 lakhs were all dishonoured, except one. The petitioner then demanded an amount of Rs.1,10,86,893/- being the outstanding payment. The respondent has not made the payment.

Benzene supplied by the petitioner was not as per specification and had high water and ethyle benzene content. The learned counsel for the respondent relies on a letter dated 12.6.1997. In fact, according to the company, they have raised two debit notes at the value of about Rs.31,16,951/- and Rs.25,58,298/-. They, therefore, submit that there is a bona fide dispute.

3. Mr.Davar, the learned counsel appearing for the petitioner, submitted that the material supplied could not have been rejected since it was consumed by the company. On the other hand, according to the learned counsel for the company, only some of the goods were consumed because the substance had become volatile and the rest of the goods were not. According to the company, the defects in the goods were noticed during the process of consumption. All these are matters which would require proper investigation by way of a civil suit.

4. On the aspect of liability, the company has claimed that it has issued debit notes of a sum indicated above. The claim of the petitioner, however, is Rs.1,18,05,334/-. It appears that the balance of Rs.61,30,085/- is outstanding even after taking into account the debit notes. Hence, it would be expedient to direct the company to deposit a sum of Rs.60,00,000/- in this Court within a

Company Petition shall stand admitted and the petitioner shall advertise the petition in two local newspapers, viz., "Free Press Journal", "Maharashtra Times" and in the Maharashtra Government Gazette. The petitioner shall deposit an amount of Rs.10,000/- with the Prothonotary & Senior Master towards the publication charges within three weeks from the date of default with an intimation to the Company Registrar, failing which the petition shall stand dismissed for non-prosecution.

5. In case the said amount is so deposited as directed hereinabove, the Company Petition to stand dismissed and the petitioner to file a suit within a period of four weeks from the date of the communication of the deposit by the Advocate for the respondent to the Advocate for the petitioner. If such a suit is filed, then the deposit will go to the credit of the said suit. The Prothonotary & Senior Master, High Court, Bombay, to invest the said amount in Fixed Deposit of any Nationalised Bank for a period of three years initially and to renew the same from time to time till further orders. In the event the suit is not filed within the stipulated period, the company will be at liberty to withdraw the amount after the expiry of the aforesaid period.

Hindustan Organic Chemical Ltd. v. Sriman Organic Chemical Industries Ltd.

Case brief

What is this about?

What did the court decide?

Hindustan Organic Chemical Ltd. v. Sriman Organic Chemical Industries Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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