TaxTMI 
TaxTMI 
2011 (3) TMI 1468
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....nd Bharat Aluminum Company Limited (BALCO) for sale of CG/EC Grade Aluminum Properzi Rods. M/s. Anish Metals Pvt. Ltd. & Group Companies agrees to purchase and Balco agrees to supply approx. 600 MT of CG/EC Road during the period 1-4-2003 to 30-6-2003 on company prices & terms. 1. Existing Price : Product Existing Basic Price Existing Trade Discount (Rs/T) (Rs/T) Alu. CG Road 90500.00 6000.00 Alu. EC Road 91000.00 6000.00 2. Excise Duty : @ 16% extra 3. CST : @ 2 per cent against Form 'C' 4. Export Tax : @ 0.10 per cent on invoice value will be applicable. 5. Payment Terms : 100 per cent payment in advance by way of Cheque/DD/LC prior to dispatch of material. 6. Monthly Quantity/Destination : Will be applicable as per Balco's policy. Discount 7. Price Variation Clause : Prices, duties, taxes and all other discounts shall be charged as ruling on the date of dispatch. 8. Balco agrees to give MOU discount of Rs. 500 PT subject completion of minimum 200 M.T. per month during the period 1-4-2003 to 30-6-2003. For Anish Metals Pvt. Ltd. For Bharat Aluminum Co. Ltd. Sd/- Sd/-" 3. Similar Memorandums of Un....
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....r petitioner submitted that petitioner-company and M/s. Anish Metals Pvt. Ltd. are not group companies. He stated that MOU had been executed by different companies with respondent to avail of certain discount offered by the respondent only on bulk purchases. According to him, each of the companies with whom respondent had entered into an MOU had separately made payment of goods ordered by it and it was never the practice of these companies to make payment for goods supplied by the respondent to any other company. He also laid emphasis on the fact that it was not even the practice of the respondent to adjust payment of one of the said companies towards amount owed to respondent by any of the other companies. 11. Mr. Krishna Kumar further submitted that even if the petitioner and M/s. Anish Metals (P.) Ltd. were group companies, still set off or adjustment could not have been made by the respondent. In this connection, Mr. Krishna Kumar relied upon decisions in P.C. Agarwala v. Payment of Wages Inspector [2005] 8 SCC 104(63 SCL 109) , Life Insurance Corpn. of India v. Escorts Ltd. [1986] 1 SCC 264, Indowind Energy Ltd. v. Wescare (I) Ltd. AIR 2010 SC 1793 and Punjab National Bank v.....
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....dice in the suit filed by the petitioner in the Bombay High Court. 18. Mr. Nayar also laid emphasis on the fact that a learned Single Judge of the Bombay High Court had specifically found that the petitioner was not entitled to any interim relief as disputed questions of facts were required to be adjudicated after giving the parties liberty to lead evidence. 19. In rejoinder, Mr. Krishna Kumar submitted that order of the learned Single Judge of Bombay High Court was an interim order and could not operate as res judicata in the present proceedings. He also laid emphasis on the minutes of Settlement dated 31-3-2005 to show that the respondent had dealt with each of the companies with whom it had executed Memorandum of Understanding as a separate independent corporate identity. 20. Having heard the parties and having perused the papers, I am of the opinion that it would be first appropriate to outline the principles which have to be kept in mind while deciding a winding up petition. A Division Bench of this Court in German Homoepathic Distributors (P.) Ltd. v. Deutsche Homeopathic-Union DHU-Arzneimittel Gmbh & Co. KG [2009] 94 SCL 176 has held that in a winding up proceeding, the f....
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....ition." 21. In the present case, I do not have to lift the corporate veil as petitioner and its group companies had throughout been representing themselves to be a single economic entity. In fact, the Memorandums of Understanding clearly show that they were executed between the respondent on the one hand as well as petitioner and other group companies on the other. 22. In this connection, the Memorandums of Understanding dated 4-4-2004 and 1-4-2005 are reproduced hereinbelow:- (i)1-4-2004 "Ref: MKT/MOU/QTRY/04-05 Dated 4th April, 2004 MOU Between M/s. Pankaj Group (Pankaj Aluminum/Ashish Metals etc.) and Bharat Aluminum Company Limited (BALCO) for sale of EC/CG/Alloy Grade Aluminum Wire Rods. M/s. Pankaj Group (Pankaj Aluminum/Ashish Metals etc.) Agrees to Purchase and Balco Agrees to supply approx. 600 MT of EC/CG/Alloy Grade Aluminum Wire Rods during the period 1-4-2004 to 30-6-2004 on company Prices & Terms." (ii)1-4-2005 "Ref MKT/MOU/ANNUAL/05-06 Dated 1st April, 2005 MOU Between M/s. Pankaj Aluminum Industries Ltd. & Hiren Aluminum Ltd. and Bharat Aluminum Company Limited (BALCO) For Sale of EC/CG/Alloy Grade Aluminum Wire Rods. M/s. Pankaj Aluminum Industries Ltd.....
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..... specify 3. Pankaj Extrusion Ltd. 4. Hiren Aluminium Ltd. ** ** ** For Pankaj Metal Private Ltd. Sd/- Director Applicants Signature Name: (E)Bharat Aluminium Company Limited P.O Balconagar, korba-495684 Chhattisgarh Application form for Authorised Dealership for Rolled Products 1. Name of the firm Hiren Aluminium Limited. ** ** ** Applied for any other name 1. Anish Metals Pvt. Ltd. sister firms, etc., if yes 2. Pankaj Metals Pvt. Ltd. specify 3. Pankaj Alum. Inds. Ltd. 4. Hiren Extrusion Ltd." ** ** ** For Hiren Aluminium Ltd. Sd/- Director Applicants Signature Name:" [Emphasis supplied] 24. Also from the documents placed on record, petitioner's group companies kept a group account which reflected the total dues payable by the respondent to the petitioner group companies. One such statement of claim sent by the petitioner to respondent and placed on record by the respondent is reproduced hereinbelow:- Anish Metals-group Name of the Party Party Amount Total Code Claim Amt. Old Pending Claims with Bharat Alu. Co. Ltd. as....
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....following up the matter with your office since last so many months for the issuance of pending credit notes but regret to mention that, till date we have not even received the copies of the credit notes which were settled by our representatives with your SAG section at Korba during Nov' 03. ** ** ** .............Please confirm us in writing regarding the adjustment of this excess payment amount of Rs. 818798 against invoice number 02/9232 dated 9-11-03 for Rs. 907469, so that we can make the balance payment of Rs. 88671 against the said invoice as being confirmed by you. Kindly look into the matter and respond us immediately considering the urgency and seriousness of this issue. This time as a special case we are releasing the payment, however, this type of lapses should be avoided in future. Thanking You. Yours faithfully, For Pankaj Aluminium Industries Ltd. (Director)"[Emphasis supplied] 26. The doctrine of single economic entity is not only well established but also well recognized by Courts. In DHN Food Distributors Ltd. v. London Borough of Tower Hamlets [1976] 3 ALL ER 462, the Court held as under:- "....We all know that in many respects a group of companies are t....