RST Semiconductors Private Limited v. Make Indiasmart Private Limited

1. On 20.08.2018 this court has passed the following order:- “This petition is filed under sections 433, 434 and 439 of the Company Act, 1956 (hereinafter referred to as the ‘Act’) seeking winding up of the respondent company. It is the case of the petitioner that a sum of Rs.21,79,997.62 is due and payable to the petitioner for the chips to be used in Rastriya Suraksha Beema Yojana Card (in short the ‘RSBY Card’) supplied to the respondent. Reliance is placed on the acknowledgement which is issued by the respondent being Annexure P-4 whereby the respondent has acknowledged their dues as on 03.03.2014 to the Rs.58,79,997/-. Thereafter, the payments were released to the petitioner leaving the said balance payable. The learned counsel appearing for the respondent has, however, taken me through their reply. In the reply, it has been clearly stated that as per the terms of the agreement, the fact which is not denied by the petitioner, that the chips were to be 2018:DHC:5709 of Samsung/Infineon/NXP(from Philips). It is pleaded that the chips that had been issued by the petitioner were not the make of Samsung make and hence, debit notes have been issued to the petitioner. A perusal of the rejoinder filed by the petitioner would show that there is no rebuttal of the allegation of the respondent, namely, that the chips that were supplied by the petitioner were not of Samsung make. At this stage, the learned counsel for the petitioner seeks some time to take instructions from the petitioner in this regard. At his request, adjourned to 05.09.2018.”

2. The case of the petitioner is that petitioner supplied to the respondent RSBY cards in terms of various purchase orders placed from time to time. Various invoices totalling Rs.1,87,89,997.62 were raised out of which by March 2014 the respondent paid a sum of Rs.1,34,10,000/-. An amount of Rs.21,79,997/- is claimed as unpaid.

3. It is also pleaded that the respondents have matched the petitioner’s ledger account and acknowledged the liability of Rs.58,79,997.62 on 3.3.2014. As no payments were received a legal notice was sent on 1.6.2015.

4. As noted above, the main defence of the respondent is that the chips were to be of Samsung/Infineon/NXP make but are not of the said make. Reliance has also been placed on two debit notes dated 31.3.2014 to claim that in view of incorrect chips supplied debit notes were raised by the respondent. Respondent has also denied the acknowledgement stating that the alleged acknowledgement dated 3.3.2014 was never signed by the respondent.

5. I may note that the relevant portion of the Supply Agreement dated 25.7.2013 reads as follows:- “3.Quality of cards 1.[1] SCOSTA certified RSBY card 64 KB with genuine SAMSUNG/INFINEON/NXP (from Philips) Chip”....

4. Acceptance Testing 4·1 MAKE INDIA SMART PVT. LTD reserves the right to inspect the goods before dispatch and inspect RST production facility. RST shall provide necessary assistance and tools for their inspection and testing.

5. Payments &. Delivery Terms Delivery to be within 3 days from PO Payment to be released within 30 days after delivery.”

6. Hence, the cards were to be of Samsung/INFINEON/NXP make. The respondent also had a right to inspect the goods before dispatch. The payment was to be made within 30 days after delivery. The case of the respondent is that genuine Samsung Chips were not supplied by the petitioner. I may note that in all 22 invoices were raised by the petitioner from 8.8.2013 to 22.2.2014. Total 6,94,564 chips with cards have been supplied to the respondent. The respondent never exercised the right prescribed in the agreement to inspect the goods and inform the petitioner that the chips were not of the right quality. Further though they were obliged to make payment within 30 days of the delivery, the respondent on receipt of the goods took no such steps to make the payment or inform the petitioner that the chips were not of the right quality.

7. To support its plea that wrong chips were supplied the respondent has claimed that on 31.3.2014 it had issued a debit note. The debit note reads as follows:- “MAKE INDIASMART PRIVATE LIMITED M-8 ESSEL HOUSE Asaf Ali Road, Delhi-11002 Debit Note Dated 31 Mar 2014 Party’s Name: Rst Semiconductors Pvt.Ltd. Particulars Amount AS PER AGREEMENT RST IS NOT INBUILD SAMSUNG/INFINEON/NXP (FROM PHILIPS)

CHIP IN CARD SUPPLY TO THIS REASON WE ARE RETURN 66500 @ 28.48/- CARD TO RST Amount (in words): Rs. Eighteen Lakh Ninety Three Thousand Four Hundred Fifty Three Only 18,93,453.00 -sd- Authorised Signatory”

8. This debit note inspires no confidence. It is dated 31.03.2014, namely, much after supply of the goods. There is nothing to show that the Debit notes were received by the petitioners. There is also nothing placed on record by the respondents to show that these chips and cards were returned as has been claimed in the debit notes. Further the debit note claims 66,500 cards were returned. In the reply that has been filed by the respondents there is an averment made that the chips supplied by the petitioner are not of SAMSUNG/INFINEONNXP (from Philips) chips as per the agreement. However, the quantity of these chips that were not as per the agreement is nowhere stated. Nearly 7 lac chips have been supplied but the debit note pertains to only 66,500 chips. Pursuant to supply of goods the respondent has paid large amounts above Rs.One Crore to the plaintiff. Clearly, a joint reading of the debit note and the reply of the respondent shows that the debit note is in the facts an afterthought.

9. I may also look at the acknowledgement relied upon by the petitioner. In the books of accounts of the respondent at the bottom the stamp of the respondent company has been affixed and there is an acknowledgement on 3.3.2014 for a sum of Rs.1,87,89,997. The rubber stamp is affixed of the respondent company. Respondent has of course denied having made such acknowledgement.

10. I have already concluded that the debit note relied upon by the respondent to claim that the chips were not of the stated quality inspires no confidence and cannot be believed. Hence, I need not go into the controversy as to whether the acknowledgement dated 03.03.2014 was actually executed by the respondent or not.

11. In my opinion, the defence of the respondent is prima facie not bona fide. However in the facts of the case I am inclined to give an opportunity to the respondent to prove its defence. If the respondent were to deposit with the Registrar General of this court the said sum of Rs. 21,79,997/- within four weeks from today, the petitioner would be free to commence appropriate civil proceedings before a civil court. In case such proceedings are commenced within six weeks of deposit of the amount by the respondent, the said deposit would be subject to outcome of the civil proceedings. The Registry will keep the said amount in the appropriate fixed deposit. In the said civil proceedings, the petitioner will be free to make an application under Section 14 of the Limitation Act which will not be opposed by the respondent. In case the respondent fails to deposit the said amount within four weeks from today, this court would appoint the Official Liquidator as the Liquidator of the respondent Company.

12. List on 15.10.2018.