TaxTMI 
TaxTMI 
1979 (7) TMI 212
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.... company and the formal purchase order was to be handed over to the petitioning creditor on or about 21st October, 1978, is set out hereunder, copy of which is annexed to the petition and is at p. 11 of the petition : "THE DURGAPUR PROJECTS LIMITED (A Government of West Bengal Undertaking, Office of the Controller of Stores & Purchase, P. O. Durgapur-2, Dist. Burdwan). Calcutta OfficeRegistered Office 1, Shakespeare SaraniNew Administrative Building Calcutta-700016.P. O. Durgapur-2 Phone 440221.Dist. Burdwan Phone 5381 (10 lines) Date 19.10.78. Ref. DP/CS-2089 To M/s. Hilton Rubbers Pvt. Ltd., 13-D, Everest 58-C, Chowringhee Road, Calcutta-700 071. Sub : 800 mm Conveyor Belt. Dear Sir, This has reference to our discussion had with your Mr. Day. Kindly arrange to deliver 200 mm. of the subject belt to our plant stores immediately. The material is urgently required for over-haulintor 4th and 5th unit of our power station. Our formal purchase order will be handed over to you on 21-10-78. Please treat this as letter of intent Yours faithfully, Sd/-P. K. Sinha Controller of Stores & Purchase Durgapur Projects Ltd". On ....
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....nce report submitted by the senior maintenance engineer, boiler, which is referred to in the said letter. Subsequently by another letter dated 12th May, 1979, the company through the secretary replied to the advocate on record of the petitioning creditor that the goods were not according to the specification and have been rejected and referred to the clause in the contract regarding acceptance and rejection and that the decision of the management would be final and binding on the parties. Therefore, the only dispute in this case, as raised by the company, is that the goods are not according to the specification and have been rejected by the company and their decision was final in terms of clause 12 of the purchase order. Mrs. U. B. Mukherjee, appearing for the petitioning creditor, placed the petition and the annexures together with the correspondence and submitted that the company had accepted the goods and entered into the contract on the representation that the goods were urgently required for immediate consumption by the company and the railway receipt was also handed over to the company on the very same day, i.e., on the 19th October, 1978, when the Controller of Stores & P....
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....final and binding on the petitioning creditor. He referred to clause 12 of the terms of the contract which is printed at the back of the purchase order. He cannot dispute that the goods were received, as the same were urgently required by the company, through its Controller of Stores & Purchase. It is further admitted that the certificate was duly issued on the 21st December, 1978, in respect of the said goods but what is now contended is that by the letter dated 5th May, 1979, the company intimated the petitioning creditor about the rejection of the goods, as, after test, it was found to be defective and not according to the specification. It is admitted by Mr. Ghose that the letter was somewhat delayed but under the terms of the contract the decision of the management was final and, therefore, the petitioning creditor was not in a position to dispute the same. He further submitted that in such circumstances it must be held that a bona fide dispute had been raised as to the terms of the contract and also if the court thinks fit the company should be directed to deposit the entire amount with the advocate on record of the company and the petitioning creditor would be relegated to a....
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.... The goods have not been rejected within a resonable time and it was only after the statutory notice was served on the company that the question has been raised. No document has been produced to show that the company at any time gave any notice to the petitioning creditor as to the test in respect of the said goods, and, as the property in the goods has passed to the company, in any event, if the company wants to deprive the petitioning creditor of the price and reject the goods, it should have given a notice to the petitioning creditor as to the date of test, nature of test and also the goods to be tested. There is no material whatsoever that the petitioning creditor's goods have been tested. If it is to be accepted, that the order of the officers of a public undertaking would become statute or an order of a court and as such binding on everybody concerned including the court, then the matter is different, and, that appears to be the attitude of the officer of the company as if no law or commercial morality exists in this country. The petitioning creditor has supplied goods as far back as on 19th October, 1978, which was received and then accepted in good condition and checked by ....