TaxTMI 
TaxTMI 
2013 (2) TMI 945
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....228.15. The consignment was to be shipped to Mumbai and the payment was to be made within ninety days from the date of bill of lading. The petitioner shipped the goods from South Africa to Mumbai under the invoice dated September 10, 1996, which were got released by the respondent from Mumbai port. It appears that due to adverse market conditions where Hosiery market had crashed, the respondent could not make payment of the amount due as per the agreed terms and sought extension vide letter dated August 8, 1997 (annexure P5) with a promise to pay US$ 10,000 before September 30, 1997 and the balance amount before December 30, 1997. The respondent after paying US$ 10,000 requested the petitioner vide letter dated January 19, 1998 (annexure P6) to extend the period of payment till April 30, 1998. 3. The respondent-company, however, did not pay anything towards the balance liability within the extended period also and sent another request dated August 11, 1998 (annexure P7) promising the petitioner to pay the remaining dues as per the following schedule : "US$ 8228.15 in September, 1998 US$ 15000 in December, 1998 US$ 15000 in January, 1999 US$ 15....
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....ce of the winding up notice ; and (v) that the present petition is barred by period of limitation. On merits, it has been reiterated that due to delay in the delivery of consignment the respondent suffered a huge loss as the hosiery market in India had meanwhile crashed and when the bales were opened in September, 1998, it was found that the material supplied by the petitioner was defective and not of the quality agreed to between the parties. It has been further averred that against its total loss of Rs. 12,50,000 even after adjusting the price for which the consignment was sold in the Indian market, the answering respondent is entitled to recover a sum of Rs. 10,58,000 from the petitioner, for which a civil suit had already been filed. 9. The petitioner in its rejoinder has controverted the petitioner's preliminary objections besides disputing the reply on merits and has reiterated its claim as contained in the petition. 10. I have heard learned counsel for the parties and gone through the record. 11. It was urged on behalf of the petitioner that the factum of placing of order by it ; supply of material ; acceptance of consignment ; utilisation of the material sent ;....
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....ation and which emanates from the preliminary objection taken by the respondent is whether the winding up petition filed by the petitioner is barred by limitation ? 15. According to the respondent articles 14 and 15 of the Schedule to the Limitation Act, 1963, are relevant to determine whether or not the winding up petition has been filed within limitation as it could be instituted within the period of three years prescribed for filing of civil suit for the recovery of price of goods, sold and delivered with or without fixed period of credit, under both the articles. In the instant case, the goods were delivered on September 10, 1996 and the three years' period expired on September 9, 1999. As regard the letters dated August 11, 1998 and August 31, 1998 (annexures P7 and P8), it was maintained that even if these letters were taken as the acknowledgment of debt, yet the limitation period of three years expired on August 30, 2001, whereas the winding up petition was filed on February 28, 2002 and that too in a defective format which was finally removed on May 9, 2002, when the petition was re-filed. Reliance is placed on Bhakti Hari Nayak v. Vidyawati Gupta AIR 2005 Cal 145. ....
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....nd 434 pertains to the amount due which is "legally recoverable". The Companies Act does not prescribe any period of limitation to institute a winding up petition filed by a creditor on the ground of inability of a company to discharge its debt liability. Since the debt, which the company does not have the capacity to pay has to be legally recoverable, it is to be seen whether the debt claimed by the creditor is within the time-limitation as prescribed under the Limitation Act. 19. The respondent-company made no payment towards the due amount after the receipt of the consignment within the agreed period and sought extension till December 30, 1997, vide its letter dated August 8, 1997 (annexure P5). The respondent though made a payment of US$ 10,000 but sought postponement of the balance amount till April 30, 1998 (annexure P6). No payment was, however, made even thereafter albeit another extension was requested vide letters dated August 11, 1998 and August 31, 1998 (Annexures P7 and P8), for the balance payment to be made in four instalments commencing from September, 1998 till February, 1999. The extended schedule also failed to secure any further payment in favour of the petit....
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....ails to honour his promise to make payment on the consented date that the cause of action will arise afresh or revive in favour of the creditor. The respondent though acknowledged its liability on August 31, 1998, but it was preceded with a promise to make the due payment by way of four instalments, commencing from September, 1998 onwards. The cause of action that arose in favour of the petitioner was in September, 1998 only when the respondent failed to pay the first agreed instalment. 25. Since the respondent-company volunteered to split its debt liability in four parts and promised to pay each part of the due amount on different future dates and since none of the part was contingent or subject to or dependent upon the previous part, it appears to me that every default would give rise to a fresh cause of action in favour of the petitioner to the extent of the defaulted instalment. However, such a cause of action cannot renew the period of limitation for the previous abandoned cause of action if the petitioner-creditor had failed to initiate legal action within the prescribed period of limitation in relation thereto. 26. The winding up petition in the instant case was instit....
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.... that the winding up jurisdiction of a company court cannot be invoked for realising debts due from the company though a company in debt can be ordered to be wound up if it is incapable to repay the admitted debt. It would be wholly immaterial whether the substantial part of the petitioner's claim is time-barred and only a part thereof is legally recoverable. The acknowledgment of its debt by the respondent-company in communications one after the other clearly establishes that the extensions were sought by the respondent-company as it was in financial crisis and unable to pay the due amount. 30. The plea that the respondent has bona fide disputed its debt merely deserves to be noticed and rejected. There was not even a whisper by the respondent after the receipt of the consignment on December 10, 1996, that there was a delay to its detriment or that the bales sent were of inferior quality contrary to the agreed terms and conditions. The respondent claims to have stored the consignment till it was opened in September, 1998 and if there was any adverse impact on the quality of material, it could be as a result of sheer and gross negligence of the respondent as well. The fact o....