TaxTMI 
TaxTMI 
1996 (3) TMI 395
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....he respondent-company. As per the averments made in the petition, the respondent-company is engaged in manufacturing bike and auto bike wheels whereas the petitioner-company is manufacturing and supplying CR strips. The respondent-company had been placing orders for the supply of CR strips of different sizes and during the period November, 1993, to September, 1994, in pursuance of the various orders placed by the respondent-company, goods worth Rs. 17,18,480.39 were supplied by the petitioner-company. However, against the aforesaid amount which represents transactions between the parties, the respondent-company paid only an amount of Rs. 12 lakhs and thus an amount of Rs. 5,18,480.39 is still outstanding against the respondent-company. The ....
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....t took place between the parties during the period November, 1993, to September, 1994. When in spite of repeated requests the respondent did not make any payment of the outstanding amount, the petitioner-company served a notice under sections 433, 434 and 439 of the Act, copy annexure P-16 on the respondent-company which was received by it on May 31, 1995. In notice, annexure P-16, it was clearly mentioned that as on September 14, 1994, a sum of Rs. 5,18,480.39 was outstanding against the respondent-company and since the amount has not been paid despite several demands, the respondent is also liable to pay interest thereon. In response to the notice issued, the respondent-company filed a reply. By way of preliminary objections it was ple....
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....o it on account of supply of the goods. It is crystal clear from letter, annexure P-5, written by the respondent to the petitioner that the former had been requesting the petitioner-company for supply of material. Further, after having a glance at annexures P-8 and P-9 there remains no doubt that these two cheques were issued by the respondent in favour of the petitioner-company and these cheques could not be encashed by the bank on account of inadequate funds in the account of the respondent-company as is evident from the letter annexure P-10 issued by the bank. Not only this, as noticed above, the respondent-company made a request for supply of material vide its letter dated August 1, 1994, annexure P-5 and this fact stands further proved....
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....spondent on different occasions and as on September 14, 1995, a sum of Rs. 5,18,480.39 is outstanding against the respondent. The factum of issuing two cheques in the sum of Rs. 1,45,000 and Rs. 1,05,000 by the respondent in favour of the petitioner-company, apparently for payment towards the outstanding amount stands established from entry dated July 26, 1994 of annexure P-15. The said entry further shows that the cheques were not encashed and were returned by the bank. Thus, from what has been noticed above, it is clear that the respondent-company did not clear its debts despite repeated requests and reminders. Learned counsel for the respondent, however, submitted that all the pending accounts were settled between the parties on Septe....
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....towards the outstanding amount. Thus, from the mere fact that the respondent issued a pay order in the sum of Rs. 1 lakh in favour of the petitioner as part payment of the outstanding amount, it can be easily concluded there was no complaint whatsoever regarding quality of goods. Thus, in the absence of any proof on the record in this behalf, the contention of learned counsel cannot be accepted. Lastly, learned counsel for the respondent submitted that no notice under sections 433, 434 and 439 of the Act was ever received by the respondent. This submission also has no merit. During the course of hearing, learned counsel for the petitioner produced on record a postal receipt evidencing the fact that on May 26, 1995, a registered letter wa....
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....was found defective. But the respondent has not been able to bring any material on record either to show that the payment of the said amount was made by it or that the respondent lodged any complaint to the petitioner regarding defect in the quality of the material supplied on September 13, 1994. In the wake of this fact it can unhesitatingly be concluded that the respondent did not make the payment of the aforesaid amount and it can, in other words, be held liable for payment thereof. The payment of Rs. 50,000 by the respondent that finds mention in annexure R-2 cannot in any way be said to be the payment for the material supplied by the petitioner on September 13, 1994, as in the letter, annexure R-2, it has been recorded that "we acknowl....