First Flight Courier Ltd. vs Indian Express Newspapers ...
2001 Latest Caselaw 252 Bom

JUDGMENT

Chandrachud, J.

1. This is a dispute between a courier company and a newspaper publishing entity. The petitioner had provided courier services to the respondent for transportation of the daily editions of its newspapers and of other publications to various destinations. The arrangement commenced sometime in 1993 and upto 30-6-1997, it is common ground that there was a barter arrangement between the parties. According to the petitioner, as of 30-6-1997, there would be a credit of approximately Rs. 45 lakhs in favour of the petitioner as a result of the barter arrangement, under which as against the invoices raised by the petitioner for the transportation of the publications of the respondent, the amounts due would be adjusted by the publication of advertisements for the petitioner in the publications of the respondents. On 9-5-1997, a letter was addressed by the petitioner to the respondent by which a review of the barter arrangement was sought. By its letter, the petitioner sought the continuance of the existing system with the modification that 75 per cent would be the proportion of the barter component and 25 per cent shall be directly paid by the respondent to the petitioner. In response, the respondent by its letter dated 11-7-1997, accepted the offer of the petitioner but clarified that the new arrangement would become operational only with effect from 1-7-1997. In other words, on and after 1-7-1997, 75 per cent of the invoice value in respect of the services rendered by the petitioner would be set off against the barter arrangement whereby the petitioner would have its advertisements published in the newspapers/publications of the respondent. 25 percent of the invoice value would be paid in the monetary form by the respondent to the petitioner. The bills prior to 1-7-1997, would have to be adjusted exclusively against the earlier barter arrangement.

2. At Exh. D to the company petition, a statement of account is annexed on which the petitioner seeks to rely. According to the petitioner, between the period 1-7-1997, until 31-1-2001, an outstanding amount of Rs. 1.78 crores is due and payable by the respondent to the petitioner.

3. On 13-7-1999, the respondent addressed a letter to the petitioner stating that all barter arrangements would be operated for a period of one year, and on completion of the year, if the amount to the credit of the barter was not utilised, the balance would be considered as having lapsed. In exceptional cases, permission would, however, be granted for the carry forward of the credit balance in respect of the barter. The petitioner in its turn has disputed the contention of the respondent and by its letter dated 24-8-1999, has denied the claim of the respondent to the effect that the barter was liable to lapse at the end of one year. Thereafter, there has been

an exchange of correspondence between the parties which ultimately culminated into a statutory notice dated 1-4-2000, which was replied to by the respondent on 19-4-2000.

4. The submission on behalf of the petitioner is that though the arrangement between the parties was a barter arrangement (entirely a barter arrangement prior to 1-7-1997 and, thereafter, a barter arrangement to the extent of 75 per cent of the invoice value), there is a debt due and owing to the petitioner in the sense that the invoices in respect of courier services rendered by the petitioner to the respondent have not been paid. Under the barter arrangement, certain proportion of the invoices was to be set off against the publication of advertisements, but the barter component has not been completely adjusted. According to the petitioner, there is no dispute about the invoices of the amounts due and payable in respect of the invoices which have been raised by the petitioner.

5. The dispute between the parties can be divided between two heads. Firstly, the payment in respect of 25 per cent of the total bill amount and, secondly, the balance which represented the barter arrangement. It would be convenient initially to deal with the second aspect. Insofar as the claim in respect of the non-payment of the component of 25 per cent of the invoice is concerned, the learned counsel appearing on behalf of the petitioner stated that the bills of the petitioner for the period July, August, September and October, 1999, have not been paid. The total amount of the invoices for these four months is Rs. 18,23,000. The petitioner was, as stated earlier, entitled to receive 25 per cent of the invoice value amount in monetary term and this would work out to Rs. 4.70 lakhs approximately. Insofar as the bills for these 4 periods are concerned, they have been annexed to the rejoinder filed by the petitioner. It is common ground between the learned counsel that the claim in respect of the aforesaid amount has not been made either in the company petition or in the statutory notice of winding up. The grievance that the bills representing 25 per cent of the total invoice value for the period between July to October, 1999, have not been paid, has been made for the first time in the affidavit in rejoinder which has been filed in the company petition. Nonetheless, on behalf of the respondent, it has been submitted that the respondent has not received the bill for July, 1999, until for the first time it came to be annexed to the affidavit in rejoinder. Similarly, for the month of August, 1999, what has been annexed to the rejoinder is a revised bill in the amount of Rs. 6.28 lakhs approximately, whereas the earlier bill submitted by the respondent was for a larger amount of Rs. 7.23 lakhs. The bill for September, 1999, is in the total amount of Rs. 4.30 lakhs. On behalf of the respondent, it has been stated that the bills for July, August and September, 1999, are subject to due verification by the respondent and that, in any event, the respondent would be willing to pay the amount of the said bills within a period of one week of a reconciliation being jointly carried out by the parties. The attention of the court was also drawn to the fact that on 20-12-1999, a cheque was issued by the respondent to the petitioner in the amount of Rs. 2.63 lakhs representing the bill for the

month of August and September, 1999, which had been made available to the respondent. The cheque was not retained by the petitioner. In view of the revised bill which has now been annexed to the affidavit in rejoinder, the learned counsel stated that the respondent would in any event pay the amount which would be legitimately due and payable representing 25 per cent of the invoice value within a period of one week of a reconciliation being jointly carried out by the parties.

6. Insofar as the question of the barter component is concerned, it is common ground that between the period, 1993 right until 30-6-1997, the parties operated exclusively on a barter arrangement. With effect from 1-7-1997, the barter arrangement was modified so as to provide that the respondent would pay 25 per cent of the total value of the invoices raised by the petitioner in monetary terms while the balance of 75 per cent would continue to be adjusted in terms of the barter arrangement by which advertisements of the petitioner would be published by the Indian Express Group. According to the respondent, there is no averment either in the statutory notice or in the company petition that until 13-7-1999, any advertisement in respect of which a requisition was made by the petitioner was not published by the respondent. In fact, the principal defence of the respondent is that it was the petitioner which did not have any advertisement campaign or promotional material as a result of which an unutilised proportion of the barter continued to exist. Apart from the aforesaid defence, regard must also be had to the fact that one of the defences of the respondent is that any barter in accordance with the prevailing trade practice has to be utilised within a period of one year. The petitioner denies that there is any such trade practice or that the barter had to be utilised failing which it would lapse. In my view, these issues by their nature are not amenable to an adjudication in a petition for winding up, since a determination of those questions would require adjudication on the basis of evidence led at the trial of a suit. The court cannot rewrite the contract between the parties. The parties postulated that recompense for the courier services rendered by the petitioner would be provided by the respondent publishing advertisements of the petitioner in the newspapers and publication of the respondent. Until 30-6-1997, the arrangement was exclusively one of barter while, thereafter, 75 per cent of the value of the invoices was to be treated as that barter component. The court cannot rewrite the contract by converting the unutilised portion of the barter component as a debt due and payable in monetary terms. There is a bona fide defence and a dispute between the parties. The arrangement between the parties has not been fulfilled. According to the respondent, this was because of the failure of the petitioner to utilise the barter component or to place requisition for the publication of advertisement. An assessment of the merits of the individual cases in regard to who was responsible for the non-utilisation of the component would be a matter of evidence. In the circumstances, it will not be possible to hold that there is any debt due and payable by the respondent to the petitioner.

7. In the circumstances, the petition for winding up is rejected, leaving it open to the petitioner to pursue its remedies in a suit.