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Stantech Project Engg. Pvt. Ltd. v. Nicco Corporation Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 7373 of 2005)Decided 13 Aug 2015
Civil Appeal No. 7373 of 2005
Justice Vikramajit Sen · Justice Shiva Kirti Singh

Background

Stantech had filed winding-up petitions against Nicco Corporation for unpaid dues (plus TDS amounts withheld) after a statutory notice under Section 434 of the Companies Act went unanswered. Nicco's counsel had conceded before the Company Judge that the dues would be paid in instalments to avoid the winding-up petition being advertised, but Nicco later argued this concession was made by mistake. The Calcutta High Court's Division Bench accepted that argument, set aside the Company Judge's order, and sent the matter back for a fresh hearing. Stantech appealed to the Supreme Court against that reversal.

Decision Breakdown

The Supreme Court held there was no justification for the Division Bench to undo the Company Judge's order, since Nicco had admittedly failed to pay an undisputed debt even after statutory notice. The Court found the junior counsel's instalment concession was in fact a sound strategic move that had spared the company from advertisement of the winding-up petition, not a mistake needing correction. It held that excusing such concessions only encourages prolonged litigation and delay. The Supreme Court set aside the Division Bench's order, allowed the appeals, and directed Nicco to pay the principal admitted dues, TDS amounts, interest, and costs within 45 days, with no further extensions permitted.

Lesson Learnt

A concession made by a party's own counsel in court, especially one that worked in that party's favour by avoiding an adverse consequence, cannot later be disowned as a "mistake" simply because the party wants a second chance: courts are reluctant to let litigants use such claims to indefinitely delay payment of admitted debts.

Official source (sci.gov.in)View Judgment (PDF)

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