TaxTMI 
TaxTMI 
1985 (12) TMI 344
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....st ground, the allegations made were that the petitioner-firm was appointed as agent by the respondent for the sale of the articles manufactured by the latter and that under the agency agreement signed between the parties, the petitioner deposited Rs. 15,000 on November 16, 1979, as security which was to carry interest at the rate of 12 per cent, per annum. On account of the security amount and the interest, an amount of Rs. 24,725 was alleged to be due till December 31, 1984. Another amount of Rs. 11,254.81 was alleged to be due from the respondent on account of the deductions in respect of damaged goods, freight paid and expenses incurred on incentives and display prizes. A demand notice under section 434 of the Act qua the said amount wa....
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....one of the decisions cited, however, supports the proposition of law put forward by learned counsel. In all these decisions, the liability to pay the alleged debt was admitted by the respondent-company. So, there was no dispute regarding the liability of the company and as it was not discharged even after the service of the demand notice, it was inferred that the company was unable to pay its debt. As held by the Supreme Court in Madhusudan Gordhan-das & Co. v. Madhu Woollen Industries P. Ltd. [1972] 42 Comp. Cas. 125 (SC), it is only where the debt is undisputed that the court will not act upon a defence that the company has ability to pay the debt, and in a case where the liability is disputed, the principles on which the court acts are t....
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....edgment contained in annexure P-1 to claim a fresh start of limitation from December 4, 1982, the date of that letter. All that is said in that letter is that "your outstanding old payments, if any, will be adjusted in the consignments after two months". The said words, obviously, contain no acknowledgment of any liability and, as such, would furnish no ground to claim a fresh period of limitation from December 4, 1982. The bar of limitation against this claim set up by the respondent is prima facie well merited. As regards the set-off against the security amount, the respondent in paragraph 6 of the written statement, on merits, alleged that goods worth Rs. 16,495.78 were supplied to the petitioner in June, 1983, but no payment was made b....