Dismissed

M/S.Doshi Brothers Marketing Pvt.Ltd. v. M/S.Mantra Industries Ltd.,Cin NO.U74990MH2009PLC192833

Bombay HC25 Apr 2014CP/309/2013

Case brief

AI extract

What is this about?

In a winding up petition for non-payment of goods, the High Court dismissed the petition due to non-compliance with the statutory notice period mandated under Section 434(1)(a) of the Companies Act, 1956. Additionally, the Court found triable issues regarding the quality of goods and the existence of an undisputed debt, necessitating evidence. Relief: Petition dismissed.

What did the court decide?

The petition is dismissed; no order as to costs.

M/S.Doshi Brothers Marketing Pvt.Ltd. Vs… — Contract and Commercial Disputes | Bombay HC (2014)

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3-CP309-13.DOC

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Agk

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 309 OF 2013

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M/s. Doshi Brothers Marketing Pvt. Ltd.…Petitioners
Versus
M/s. Mantra Industries Limited…Respondents

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Mr. Sagar Kasar, for the Petitioners.
Mr. O.A. Das, i/by M/s. O.A. Das & Associates, for the Respondents.

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CORAM: G.S. PATEL, J DATED: 25th April 2014

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PC:-

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The petitioners seek the winding up of Mantra Industries Limited (“ the Compan y”) on the ground that it is indebted to the petitioner in the amount of Rs. 7,17,231.50 ps. This is the amount allegedly due for supply of goods made by the petitioner to the Company, with interest at the rate of 24%.

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On 24th October 2011, the Company placed a purchase order by email with the petitioner for supply of 20000 ball bearings. The petitioner claims that a little more than this quantity was supplied. 10,000 units were supplied at the rate of Rs. 34.52 per unit and another 10,400 units were supplied at the rate of Rs. 34.42 per unit. A tax invoice for the aggregate amount of Rs. 7,17,231.50 ps was

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raised. According to the petitioners, payment was due in 60 days of
the invoice. This payment was not made. The petitioner repeatedly
made requests.

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The petitioner then claims to have served what it calls a statutory notice dated 8th May 2012 through its advocates. There was no reply to this notice, nor compliance of the same. It is on this basis this present petition is brought.

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Mr. Das, learned advocate for the Company, first points out that the notice is not in accordance with the requirements of the Companies Act, 1956. Mr. Kasar, learned advocate for the petitioners, contends that it matters not whether the notice mentions or does not mention the sections of the Companies Act or even the words “winding up”, there being no prescribed form. He relies on the decision of a learned Single Judge of the Rajasthan High Court in the case of Har Narayan Tandon V/s. Jaipur Smelting Private Limited 1 and of a learned Single Judge of the Punjab and Haryana High Court in J.G. Finance Limited V/s. Hansaflon Plastochem Limited .2 These submissions are entirely misconceived. Neither decision is an authority for the proposition that a notice can be sent in any form without complying with the minimum requirements of the statute. The provisions of Section 434(1)(a) are very clear. The notice required to be sent, whatever the form and the actual wording, must require compliance in no less than 21 days. That is not a period that can be waived by the Court. The advocates’ notice in this case demands payment in only 15 days.

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It would have been a different matter had the learned advocate for the petitioners been able to show that no part of his petition is

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1 [2003] 115 Company Cases 231

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2 [2001] 103 Company Cases 773

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based on non compliance of this statutory notice and that no part of
the claim was laid under Section 434(1)(a) of the Companies Act,
1056. That is not so. Several sub-paragraphs of paragraph 8,
including in particular paragraphs 8(viii), (ix) and (x) make it clear
that the entire cast of the petition is on the basis of non-compliance
with the statutory notice. If there was any doubt about this, it is
completely eliminated by paragraph 14 of the petition which says

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“in the premises aforesaid, by virtue of the said Company
having failed to pay or secure or compound the dues of the
petitioner within 21 days of the receipt of the statutory notice
under the Companies Act the said Company is deemed to be
unable to pay its debts …...”.

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Ex-facie, the petition is not maintainable on this ground alone.

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However, the Company also raises another ground, namely, that the goods supplied was sub-standard. It is true that there is no reply to the statutory notice where this is stated. But this is not merely a bald assertion without supporting material made in the affidavit in reply. The Copany has, to its affidavit in reply, annexed a letter dated 25th November 2011 (Exhibit “B” to the affidavit in reply) and further letters dated 4th December, 2011, 19th December 2011, 9th January 2012, 23rd January 2012 and emails dated 26th November 2011, 5th December 2011, 20th December 2011, 10th January 2012 and 24th January 2012. All of these are in very close temporal proximity to the purchase order of 24th October 2011. It is not possible to say, therefore, that these letters are an afterthought.

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In paragraph 5 of the rejoinder, the petitioners now dispute even the receipt of these letters as also these emails. On the face of it, this is a disputed question of fact which cannot be examined in the summary jurisdiction of this Court. It is, to my mind, extremely

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unlikely on a prima-facie assessment that these emails and letters
would be fabricated as is now sought to be contended. The print-outs
of the emails, especially those marked as Exhibit “C” and “C3”,
indicate that they were probably sent at the relevant time, as can be
seen from the footer of these emails. This is not to suggest that there
is conclusive evidence of despatch these emails but merely that these
are, prima-facie, disputed questions of fact that demand the taking of
evidence.

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One final matter remains. In the affidavit in reply the Company has offered to return all the goods that it says are substandard. In the affidavit in rejoinder the petitioner has said that it was willing to take back the goods, but added that the goods should be verified. It is therefore not possible to hold that there is an ascertained, undisputed debt due to the petitioners. It is also not possible in these circumstances and having regard to these facts to say that the defence is entirely without substance or lacking in bona fides . Several triable issues are raised that require the taking of evidence.

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The petition is not maintainable. The petition is dismissed with no order as to costs.

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(G. S. PATEL, J.)

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M/S.Doshi Brothers Marketing Pvt.Ltd. v. M/S.Mantra Industries Ltd.,Cin NO.U74990MH2009PLC192833

Case brief

What is this about?

What did the court decide?

M/S.Doshi Brothers Marketing Pvt.Ltd. v. M/S.Mantra Industries Ltd.,Cin NO.U74990MH2009PLC192833

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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