JUGALKISHORE BENARSIDAS Vs. SOUTH INDIA SAW MILLS (P.) LTD.
HIGH COURT OF KERALA
South India Saw Mills (P.) Ltd.
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BALAGANGADHARAN NAIR, J. -
(1.) THIS is a creditor's petition under Section 439 read with Sections 433(e) and 434 of the Companies Act.
(2.) THE averments in the petition are briefly the following: The respondent -company's principal business is to run a saw mill and carry on trade in timber. In respect of the supply of band saw and circular saw blades and other goods made by the petitioner, the company was indebted to the petitioner in a sum of Rs. 1,167.43 on account of principal and interest under the ledger maintained by the petitioner. On February 24, 1973, the petitioner issued a registered notice demanding payment of this debt and it was accepted by the company on February 28, 1973. Thereafter, the company paid the petitioner Rs. 100 on March 14, 1973. The petitioner understands that large amounts are due by the company by way of arrears of employer's share of contribution of provident fund sums as well as employer's share of E.S.I. payable to the Employees' State Insurance Corporation. It is also understood that a suit had been filed by the Corporation Bank Ltd., Calicut, against the company for recovery of a sum of Rs. 62,449.22 and interest and costs. It is thus manifest that the company is unable to pay its debts. The petition was filed on August 16, 1973.
On February 18, 1974, the company's manager filed a counter -affidavit to the following effect: The company was having dealings with the petitioner from 1959. The petitioner's ledger produced in the case would show that the actual amount outstanding on November 13, 1972, was only Rs. 1,087.43. There was no settlement of accounts and the company had been making payments for several of the items purchased. After receipt of the notice, the company paid Rs. 40 also on March 19, 1973, besides the Rs. 100 admitted in the petition, for some of the items purchased. The petitioner has not, however, given credit to the payment of Rs. 40. The company has also paid Rs. 50 on October 3, 1973, and another Rs. 50 on December 29, 1973. After these payments, the balance due to the petitioner would only be Rs. 847.43. It was not correct to say that large amounts are due from the company by way of arrears of E.S.I. and E.P.F. contributions. The company is regularly making such payments as and when they become due. The allegation that the respondent has many other debts is wrong. The Corporation Bank, Calicut, had not filed any suit or taken any other proceeding against the company in any court for realising a sum of Rs. 61,449.22. Although the company has dealings with the bank, the bank had no occasion to bring any suit against the company. The financial position of the company is very sound and it is very solvent and the petitioner has been moved by some improper motives to file the petition without any merits. The company has no intention either to evade or avoid payment; in fact the company is prepared to pay the balance due to the petitioner in a lump.
(3.) TO this the petitioner filed a reply -affidavit on March 26, 1974, that the payments mentioned in the counter -affidavit which have not been given in the affidavit were subsequent to the petition. The Corporation Bank/ Kozhikode, had filed O.S. No. 94 of 1972 on the file of the Sub -court, Kozhikode, for Rs. 68,704.39 against the company for recovery of a debt and the statement to the contrary in the counter -affidavit of the company is false. The affidavit proceeded to say that the financial position of the company is not at all solvent and that there are a number of attachments pending against the company, effected by officers for the revenue recovery collections in the Taluk Office, Kozhikode.;
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