Case Law Details

Case Name : Maheshwary Ispat Ltd. Vs Neo Carbons (P.) Ltd. (Calcutta High Court)
Appeal Number : CA No. 770 of 2012
Date of Judgement/Order : 12/12/2012
Related Assessment Year :


Maheshwary Ispat Ltd.


Neo Carbons (P.) Ltd.


CA No. 770 of 2012
CP No. 263 of 2009

Date of Pronouncement – 12.12.2012


1. Sufficient grounds have been made out as to why the applicant was not represented on November 20, 2012 when CP No.263 of 2009 was dismissed for default. The order dated November 20, 2012 is recalled and CP No.263 of 2009 is restored to the file.

2. CA No.770 of 2012 is allowed as above without any order as to costs.

3. By consent of the parties, CP No.263 of 2009 is taken up for hearing.

4. The claim is on account of price of goods sold and delivered. Pursuant to purchase orders issued by the company on the petitioner in October and November, 2007, the petitioner supplied calcined petroleum coke of agreed specifications of size 0-1 mm to the company and duly raised invoices therefor. There is no dispute that the company received the goods and accepted the invoices. The petitioner says that four of the bills remain outstanding: the bills dated November 13, 2007 and November 28, 2007 pertaining to supplies made at the Burdwan unit of the company; and, the bills dated November 21, 2007 and December 8, 2007 pertaining to supplies effected at Cuttack unit of the company.

5. The company says that the claim is disputed and the company had complained of the quality and the size of the goods long prior to the issuance of the statutory notice by the petitioner and, indeed, prior to the issuance of the first demand for payment by the petitioner. The company refers to a letter dated November 22, 2007 wherein it complained that 48% of the goods supplied by the petitioner to the company under the invoice dated November 13, 2007 at the Burdwan unit of the company had been found to be in powder form. The company requested the petitioner to supply 80% of the goods of size 1mm or more “and the rest may be in dust form.” The company refers to another letter dated December 12, 2007 issued in respect of the November 13, 2007 and November 21, 2007 supplies effected by the petitioner to the Burdwan and Cuttack units of the company, respectively, wherein it suggested that 48% of the goods were found in powder form and that resulted in excess use of the material than was necessary.

6. The petitioner did not immediately issue any reply to the company, but reminded the company by its letter of April 1, 2008 that since this size was specified in the purchase orders to be 0-1 mm with no restriction on either side, the modified specifications were not acceptable. The petitioner also conveyed to the company that the pricing of the goods was based on the specifications as indicated in the purchase orders and such specifications could not be subsequently modified. The letter of April 1, 2008 also demanded the balance payment of Rs.9,01,157/-. A subsequent reminder for payment was issued on April 24, 2008.

7. The company replied to the petitioner by a letter of May 2, 2008 where the company asserted that it had required the petitioner to ensure that the dust content in the supply was not more than 48% but the petitioner had apparently failed to adhere to such condition. The company did not, however, deny the receipt of the goods nor does the letter of May 2, 2008 reveal that the company had any grievance as to the quality of the goods save the complaint relating to the size.

8. In response to the statutory notice of September 25, 2008 issued on behalf of the petitioner seeking payment in respect of the four bills, less an amount of Rs.2 lakh which had been paid, the company asserted that the company had called upon the petitioner, by the company’s letter of November 22, 2007, that the petitioner was to supply 80% of the material of size 1 mm and 20% of size 0 mm. Whatever the company may have meant by such assertion, it is apparent that the letter dated November 22, 2007 was issued by the company to the petitioner subsequent to the tranches of supply being effected by the petitioner and even after the supplies were effected in respect of the invoices of November 13 and November 21, 2007. The letter of November 22, 2007 complained of the size of the goods and sought to modify a key feature of the specifications indicated in the purchase orders, but did not contain any complaint as to the quality of the goods supplied. It is evident that the company sought to create an air of dispute as the supplies were due to end with a view to obtaining a discount from the petitioner.

9. The company cannot demonstrate that it had, contemporaneously or otherwise, complained of the goods supplied by the petitioner not adhering to any of the specifications stipulated in the purchase orders. Even the company’s grievance as to the size of the goods is not tenable since the purchase orders specified the size to be 0-1 mm.

10. The company has no defence to the claim and has relied on the correspondence exchanged between the parties as a cloak to hide its inability to pay the creditor. The petition is liable to be admitted.

11. CP No.263 of 2009 is admitted for the principal sum of Rs. 9,01,157/- together with interest thereon at the rate of 12% per annum from September 25, 2008, which is the date of the statutory notice. If the company pays off the entire amount, inclusive of interest and costs assessed at 1000 GM, within a week from date, the petition will remain permanently stayed.

12. In default, the petition will be advertised once in The Statesman and once in Bartaman. The advertisements should indicate that the matter will appear before Court on the first available working day after the expiry of four weeks from the date of publications being made. Publication in the Official Gazette will stand dispensed with.

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