Salil K. Roy Chowdhury, J.
1. This is an application for stay of a Company Petition No. 201 of 1971, including all proceedings thereunder.
2. The relevant facts are as follows :
The petitioning-creditor (hereinafter referred to as 'the respondent '), pursuant to diverse orders received on different dates at an agreed rate, sold and delivered to the applicant (hereinafter referred to as ' the company '), various mill stores and equipment between October, 1968, and July, 1969, and submitted their bills. The respondents submitted their bills to the company which were accepted by the company and the company from time to time made diverse payments and a sum of rupees 98,583.44 remained due by the company to the respondent in respect of balance of price of goods sold and delivered as aforesaid. As the company failed to pay the respondents the said dues, the respondents by a notice of their solicitor dated the 28th of November, 1970, served on the company under Section 434 of the Companies Act, 1956. The company never replied to the said letter.Thereafter, on the 18th of May, 1971, the respondent presented the said Company Petition No. 201 of 1971 for winding up of the company. Thereafter, on the 8th of July, 1971, the present application for stay of winding up proceeding has been filed by the company.
3. Mr. Biswarup Gupta, appearing for the company, submitted relying on the allegations in the affidavit of one P. K. Mahadevan, the chief accountant of the company, affirmed on the 7th of July, 1971, in support of this application in or about November, 1968, that there was an alleged oral agreement between the company represented by the deponent and one partnership firm, Shri Laxmi Trading Company, represented by Umasankar Saraf, a partner thereof, and Binode Kumar Saraf, representing the respondent, that all outstanding and/or dues from the said firm, Shri Laxmi Trading Company, to the company would be set off periodically against the total dues of the company to the respondent and whatever balance would remain after such adjustment would be paid by the said firm, Shri Laxmi Trading Company, to the company. It was alleged that a large sum of about Rs. 7,58,120.65 was due and owing to the company by the said Shri Laxmi Trading Company and as the dues of the company from the said Shri Laxmi Trading Company have always been much more than the total dues of the respondent from the company as such no set-off was ever effected by the respondent and the said firm. It was alleged that most of the shares of the respondent-company are owned by Binode Kumar Saraf and Inderchand Saraf, and/or their nominees and/or family members. It was alleged that the respondent is really in the nature of a partnership and a family concern. The said Binode Kumar Saraf is also a partner of the said Shri Laxmi Trading Company. It was again alleged that after the said statutory notice was served by the respondent on the company the deponent rang up Binode Kumar Saraf and there was a discussion between them in the 3rd week of December, 1970. It is also alleged to have been agreed between them that no further notice need be taken of the said statutory notice served by the respondent on the company. It was further alleged that it was agreed by the said oral discussion with the deponent and Binode Kumar Saraf and one Umasankar Saraf, a partner of the said firm of Shri Laxmi Trading Company, that the dues of the company against the said firm of Shri Laxmi Trading Company should be paid off or adjusted by supplying raw jute and it was further alleged that it was agreed that the parties should meet at a future date for discussing ways and means with notice to the said firm. Mr. Gupta submitted that in view of such allegations and also in view of the statements in the affidavit of Binode Kumar Saraf and Inderchand Saraf which are vague and devoid of any particulars it should be held that there are genuine and bona fide defences of the company to the alleged claim of the respondent. Mr. Gupta also made a comment that one of the parties to the said alleged tripartite agreement being Umasankar Saraf has not filed any affidavit in this application denying the alleged tripartite agreement of November, 1968, and December, 1970.
4. Mr. R. C. Kar, appearing for the respondent, submitted that the whole contention of the company of the alleged oral agreement for setting off the alleged dues of the company from Shri Laxmi Trading Company against the claim of the respondent from the company is absolutely a myth and without any basis whatsoever. The alleged agreement or discussions are said to be verbal and never been recorded in writing at any stage since 1968. There is no particular whatsoever of the said alleged agreement. The deponent is the chief accountant making such false statements deliberately only to create cloud and confusion about the bona fides and admitted claim of the respondent, if possible. The directors of the company have deliberately avoided affirming any affidavit in respect of the alleged agreement for obvious reasons that the story of such an agreement is absolutely false. Mr. Kar submitted that the said Shri Laxmi Trading Company is a partnership firm and the respondent is a private limited company and they are separate legal entities. The said firm and the respondent had independent and separate transactions with the company. Mr. Kar also referred to the statement of the outstanding bills annexed to the winding-up petition showing clearly that the goods were supplied by the respondent to the company and bills were submitted in respect of such supplies pursuant to the order of the company even as late as 19th of July, 1969, and payments were received by the respondent from the company. As such the said alleged agreement in November, 1968, for setting off the respondent's claim against the alleged dues of the company from Shri Laxmi Trading Company seems to be highly improbable and absurd. The company never replied to the statutory notice of the respondent. With a view to give sufficient time to pay off the respondent's dues the petitioning-creditor presented the winding-up petition in May, 1971. The winding up petition, as Mr. Kar submitted, is a bona fide application as the company is unable to pay its debts within the meaning of the Companies Act, 1956. It is not an abuse of the process of this court.
5. After carefully considering the respective contentions raised in the affidavits and correspondence and also the submission of Mr. Biswarup Gupta and Mr. Kar, I am of the view that the alleged oral agreement between the chief accountant of the company and the respondent for adjustment by way of set-off is highly improbable and has been set up in this application by the company only to create confusion and raise some sort of disputes as to the claim of the petitioning-creditor, if possible. It is significant that the company and the petitioning-creditor are both limitedcompanies within the meaning of the Companies Act, 1956, are alleged to have entered into an agreement or adjustment verbally without any writing and not even such an agreement subsequently recorded in writing is something which a court of law cannot accept. It is also significant that none of the directors of the company has come forward to make an affidavit or support the chief accountant in this application. Not a scrap of paper has been produced to show that such a huge claim of the company against the said firm of Shri Laxmi Trading Company was sought to be adjusted against the comparatively small claim bf the respondent from the company. It is also strange that the alleged oral agreement was entered into in November, 1968, but no effect was given to the alleged agreement by setting off the claim of the respondent against the claim of the company from the said Shri Laxmi Trading Company. In fact, the respondent has supplied goods to the company even after November, 1968, and submitted their bills in respect thereto and received payments from the company even after November, 1968. The significant fact is that the company has not even cared to reply to the statutory notice served by the respondent through its solicitor on the company. Had it been the case that there was any such agreement for adjustment then it was only natural for the company to reply to the said statutory notice setting off the said oral agreement for adjustment of the respondent's claim. On the other hand, another oral agreement is sought to be set up by the company in this application for the first time that it was agreed that no effect to be given to the said statutory notice by the respondent. I have no hesitation in rejecting the contention of the company as being wholly false and untenable and has been set up with the sole purpose of raising some sort of disputes as to the claim of the respondent, if possible. I cannot accept any of the contentions of the company raised through its chief accountant in this application. As there is no dispute as to the claim of the respondent against the company and the company has not replied to the statutory notice served by the respondent through its solicitor, I cannot hold that the winding-up application by the respondent is an abuse of the process of this court. Prima facie, the winding-up application is bona fide. In the circumstances, I hold that the dispute sought to be raised by the company as to the debt due by the company to the petitioning-creditor is not at all a bona fide dispute.
6. In the result, I make an order that if the company pays a sum of Rs. 98,583.44 to the respondent's solicitor by 15th November, 1971, towards the respondent's claim, then the Company Petition No. 20I of 1971 and all proceedings thereunder would be permanently stayed.
7. In default of such payment by the company to the respondent's solicitor in terms of this order this application for stay will stand dismissed with costs and the interim stay will stand vacated. In that event thewinding-up petition would be advertised once in The Statesman, once in the Ananda Bazar Patrika and once in the Calcutta Gazette by the 15th of December, 1971, and the matter will appear in the list on the 3rd of January, 1972. The interim stay will continue till the 15th of November, 1971.