TaxTMI 
TaxTMI 
2010 (2) TMI 592
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....f manufacture of tea. Over a period of time, the company, in purported discharge of its liabilities, issued seven cheques amounting to a total of Rs. 43,43,933 as per the following particulars : Date Cheques Nos. Amount (Rs.) 16-12-2005 430840 3,00,000 18-12-2005 430841 3,00,000 20-12-2005 430842 3,00,000 08-06-2006 430877 3,00,000 10-06-2006 430578 3,00,000 12-06-2006 430579 3,00,000 20-06-2006 120751 25,43,933 3. All the cheques save the last were drawn by the company on the State Bank of India, Dalhousie Square Branch, Calcutta. The last was drawn on ICICI Bank, R. N. Mukherjee Road, Calcutta. 4. Prior to the present petition being filed, the petitioner had instituted C. P. No. 416 of 2006 on the self-same cause. At the hearing it was noticed that the petitioner was unable to produce the acknowledgment card evidencing service of the statutory notice on which the previous petition was founded. An order dated August 27, 2007, recorded that since the service of the statutory notice was a precondition for a creditor invoking section 434(1) (a) of the Companies Act and the petitioner had not satisfactorily ....
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....d the accounts on behalf of the company. It is the admitted position that upon the company receiving such statement, the company's authorised officer disputed the quantum that had been claimed by the petitioner and wrote down the quantum that appeared from the company's version of the accounts before signing the document and affixing the company's rubber stamp thereon. The company's officer confirmed that the closing balance in favour of the petitioner as at March 31, 2005, was Rs. 43,43,933. The writing on behalf of the company is in hand in a document which is otherwise printed except the signatures thereon. 8. To return to the yarn that has been spun in the reply to the statutory notice. The company was aware that there existed an indisputable document where the company had clearly and unequivocally acknowledged and admitted its indebtedness; where the company had consciously contested the balance amount that the petitioner had suggested and had put in the amount that appeared to be due to the petitioner from the company's books. Yet, there is a lot of imagination that has gone into the reply to the statutory notice, notwithstanding this debility on the part of the company, t....
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....eplace the old cheques. The company again insisted that the letter of June 7, 2006, also stipulated that these fresh cheques should not be deposited without (though the reply mistakenly used the word "with") the prior approval of the company. The company claimed that the six cheques for Rs. 3 lakhs each were unfairly attempted to be encashed by the petitioner though the petitioner was aware that the three previous cheques were to be returned unencashed and the three subsequent cheques were not to be presented without the previous authority of the company. This is a hackneyed defence put up every so often to rebut the presumption that arises upon a cheque being issued ; it is distressing that such line of defence continues to be repeated mindlessly. 13. This story improves thereafter. Now that the first six cheques were apparently taken care of, one set of three having allegedly been furnished to replace the previous set of three, the company embarked on the more difficult task of trying to explain away the last cheque bearing a broken figure. The company suggested that it had a warehouse in Siliguri where blank signed cheques were kept to facilitate its employees to meet the day....
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....ip over the 25 pages and reach the annexures thereto. The first annexure to the company's affidavit is a letter of April 12, 2006, which is professed to have been sent both by the registered post and by hand. The copy of the letter appearing at page 26 of the company's affidavit is alleged to have been received by the petitioner with a rubber stamp affixed thereto and one Baboo Lal having allegedly signed on behalf of the petitioner in Hindi. The letter proclaims to be a covering letter for forwarding a debit note dated March 31, 2006, for Rs. 33,78,597. Page 27 of the company's affidavit reflects a copy of the debit note. Such debit note also calls for a second look. There are seven financial years which are indicated in the first column of the debit note. The second column indicates the alleged overcharging of rates in the gunny bags. The third column details the numbers of bags that were apparently sold by the petitioner to the company during the relevant financial years and the fourth column records, possibly, the excess payment made to or demanded by the petitioner. Save an amount of Rs. 76,544 the balance amount in the total claim in the debit note of Rs. 33,78,597 pertains t....
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....efence being set up to meet an otherwise unimpeachable claim of the petitioner. If the letter of September 2, 2005, had not been there, and had not indicated what it has, the company's defence would have been hollow. On any intelligent reading of the letter of September 2, 2005, which the company claims to have issued, it is obvious that the company has obliquely attempted to take care of the admission of indebtedness that the company issued on April 1, 2005. For a first, there is a challenge to the rates at which the petitioner charged. Secondly, the company advised the petitioner to amend its bills already raised on the company. Thirdly, the letter indicated that a debit note would subsequently be issued. Any person with ordinary intelligence would see through the dubious design of the company and not read the purported letter of September 2, 2005, to be anything but an attempt to create a false and dishonest defence. The petitioner has denied the issuance and receipt of the letters which have been relied upon in the company's affidavit. 21. The letter said to have been issued on December 19, 2003, does not appear to have been served on the petitioner. The company appears to h....
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.... apparently bear the signature of one Phool Kumar, an employee of the petitioner. The petitioner has categorically denied the receipt of such letters and the existence thereof and the petitioner has referred to such documents as having been manufactured and brought into existence for the purpose of present proceedings. The petitioner has also denied the existence and receipt of the letters said to have been issued by the company on December 19, 2003, March 30, 2004, September 2, 2005, April 12, 2006 and the debit note of March 31, 2006. The petitioner has disowned the purported rubber stamp bearing the name of the petitioner's proprietorship concern that the company has relied on to claim service of some of these letters on the petitioner. 24. The next set of documents that appears in the company's affidavit comprises letters allegedly issued on June 17, 2006, July 7, 2006 and July 29, 2006. The first three purported letters referred to the petitioner having wrongfully deposited the six cheques each of value of Rs. 3 lakhs. The second purported letter of July 29, 2006, referred to the final cheque for Rs. 25,43,933. The company appears to have asserted that such cheque had never....
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....company raised on the petitioner or more than one debit note. At the following sub-paragraph the company has pleaded that the bills submitted by the petitioner were received in good faith and on the impression that they were on the basis of the agreed rates, "however during audit, it was discovered that the bills submitted by the (petitioner) were not raised in accordance with the rates agreed . . ." Audits of companies are statutorily required to be held every year for the relevant financial year. If the company was aware in December, 2003, or even in March, 2004, that the petitioner had overcharged it, there was no question of the company confirming the accounts as at March 31, 2005, prepared on the basis of the petitioner's rates. 28. At paragraph 3(d ) of the company's affidavit, it has said that payments were made by it to the petitioner at the agreed rates and not on the basis of the rates quoted by the petitioner in the invoices that have been relied upon in the petition. There is no denial of the receipt of the invoices by the company. There is no letter of protest relating to the invoices, save the contrived and utterly incredulous letters of December 19, 2003 and March....
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....ector of the company who has affirmed the affidavit has alleged that "the price/rate was not agreed and as such the petitioner (sic, the company) by its letter dated December 19, 2003, March 30, 2004 and September 2, 2005, duly requested the applicant to amend the rate ..." For the reasons discussed earlier, it is impossible to believe that these letters were issued on the dates claimed or, in any event, that they had been received by the petitioner. In any event, since it is irrelevant after the company admittedly confirmed the balance of Rs. 43,43,933 in the document dated April 1, 2005, as to whether it issued the previous letters said to be dated December 19, 2003 and March 30, 2004, it is the letter said to have been issued by the company on September 2, 2005, that will require a closer scrutiny. 31. In the sixteenth paragraph of the petition, it has been averred that in the letter dated April 1, 2005, the company had confirmed that a sum of Rs. 43,43,933 was then due and payable to the petitioner. A copy of the document appears as annexure "D" to the petition, at page 536 thereof. The company has dealt with paragraphs 15 and 16 of the petition at paragraph 9 of its affidav....
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....e company in the document dated April 1, 2005. The letter said to have been issued by the company on September 2, 2005, proceeds as if there was no admission of indebtedness by the company to the petitioner prior thereto. The petitioner has disclosed documents, copies whereof have been appended to the petitioner's supplementary affidavit, to show that after December 19, 2003 and after March 30, 2004, there were two documents where the company had categorically admitted its liability, if not to the exact extent of the petitioner's claim, at least to an extent which would be incongruent with the assertions contained in the letters said to have been issued by the company on December 19, 2003, March 30, 2004 and September 2, 2005. There is no attempt to explain this glaring anomaly in the letter said to have been issued by the company on September 2, 2005. 33. Again, if it is to be believed that the petitioner had overcharged the company and the company had protested by its letters said to have been issued on December 19, 2003, March 30, 2004 and September 2, 2005, it would be hard to digest that the company would still accede to the petitioner's request for furnishing security as a....
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...., (g), (h ) and (i) of paragraph 3 and deny all allegations contrary thereto. I say that the said company by practising fraud and adopting such illegal practices foisted a claim for a sum of Rs. 18 lakhs and after receipt of the blank cheque the said applicant with a mala fide motive and intention filled the said cheque for a sum of Rs. 25,43,933 instead of Rs. 15,000 and got it dishonored with a threat to proceed under section 138 of the Negotiable Instruments Act by suppressing the fact that the aforesaid cheques were not payable inasmuch as no consideration was passed for the purpose of issuance of the said cheques which will be crystal clear from the letters issued by the company and received by Ankit and company I reserve my right to make appropriate submission in respect of the 138 proceedings at the time of hearing of the said application." 36. The paragraph has been quoted verbatim as it appears in the company's affidavit, complete with the mistakes in form and otherwise. Without digressing to mention the carelessness with which pleadings are recklessly hurled at court these days, the substance of the stand may now be scrutinised. The expression "further reference" that ....
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....eges it was and if the company's letters of April 12, 2006, enclosing the debit note of March 3, 2006, had been served on the petitioner, then the company ought to have charged the petitioner with such facts immediately upon receiving the notices of dishonour. Indeed, the company's against the petitioner as is evident from the purported letters of September 2, 2005 and April 12, 2006, is completely inconsistent with the company having made over cheques by way of security to the petitioner thereafter. Then again, if the company's letter said to have been issued to the petitioner on June 17, 2006 (annexure "E" page 36 of the company's affidavit) was authentic, it would defy logic for the company to have trusted the petitioner or its employees thereafter to make over a blank cheque on June 20, 2006. All of these only point to the purported letters that the company has relied on in its affidavit having been manufactured and ante-dated to give the illusion of a defence. The contents of the purported correspondence now relied upon by the company and not referred to in any of the admitted documents are so utterly inconsistent with the contemporaneous conduct of the company that there is a....
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....itioner categorically asserted that "the entire story set up by the company in sub-paragraph (1) of the said affidavit is false, mala fide and made with an intent to mislead this court." 40. There is nothing of any merit that the company has been able to show in support of its bogus defence. On any reading of the company's affidavit and the detailed stand taken in its response to the statutory notice, it is palpably clear that the company has set up a moonshine defence which the company has fraudulently invented for the purpose of seeking to resist the valid claim of the petitioner. There is no explanation as to why the rate differences which were allegedly noticed prior to the company acknowledging its indebtedness on April 1, 2005, had not been pointed out at the time of the admission. The company's letter of September 2, 2005, has been attempted to be brought on record seeking to demonstrate that it was only around such time that the company was aware that the petitioner's bills were inflated. However, even assuming that the other documents which have been referred to in the company's letter of September 2, 2005, are genuine, it would demonstrate that the company was aware lo....
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....lowing passage from paragraph 5 of the report is relevant (page 5) : "5. The courts of law are meant for imparting justice between the parries. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation." 46. There are many instances of deponents of false affidavits being sent to the criminal courts for appropriate action. To cite but one, the judgment reported at [2001] 5 SCC 289 (Suo Motu Proceedings against R. Karuppan, Advocate, In re), may be referred to (page 293) : "13. The courts are entrusted with the powers of dispensation and adjudication of justice of the rival claims of the parties besides determining the criminal liability of the offenders for offences committed against the society. The courts are further expected to....
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....l seal these documents immediately. The original copy of the affidavit-in-opposition affirmed on behalf of the company by Subhojit Ghose on February 14, 2008, will also be sealed by the Registrar, original side. The company's said affidavit and the following documents, the originals whereof have been handed over, should be forwarded by the Registrar, original side to the appropriate forum as subsequently directed : (1)The letter dated April 12, 2006, said to have been sent by hand ; (2)The letter dated April 12, 2006, said to have been sent by registered post, including postal receipt therefor ; (3)The debit note dated March 31, 2006 ; (4)The letter dated September 2, 2005, said to have been sent by registered post, including the postal receipt therefor ; (5)The letter dated December 19, 2003, said to have been sent by courier service ; (6)The letter dated March 30, 2004, said to have been sent by registered post, including the postal receipt therefor ; (7)The letter dated December 16, 2005, said to bear the rubber stamp of the petitioner ; (8)The letter dated June 7, 2006, said to bear the rubber stamp of the petitioner ; (9)The letter dated June 17, 200....