Fourseasons Marketing Pvt. Ltd. vs The Indure Limited
2004 Latest Caselaw 1474 Del

JUDGMENT

A.K. Sikri, J.

1. The petitioner claims that it has to receive a sum of Rs. 18,75,000/- from the respondent company. It is not paid to the petitioner even after service of statutory notice dated 27.7.1998 under Section 434 of the Companies Act. Present petition is filed seeking winding up of the respondent company on the ground that respondent is unable to pay this debt. As per the averments made in the petition, the petitioner and respondent company entered into an Agreement dated 16.6.1997 as per which petitioner company was to provide lassoing and related services for projects under Hidalgo Industries Ltd. (Renusagar Power Division). The respondent company was to pay a lump sum amount of Rs. 75 lakes to the petitioner company for these services. 50% of this amount was to be paid on receipt of advance payment from the customer and balance 50% was to be paid during the execution of the contract. On 3.7.1997 the petitioner raised invoice of first 50% amount i.e. for Rs. 37, 50,000/-. However, as against this, payment of only Rs. 18, 75,000/- was made on 10.7.1997. The petitioner followed up the matter with the respondent company demanding the balance amount of Rs. 18, 75,000/- towards first 50% and as per invoice dated 3.7.1997. As mentioned above, when the respondent the present petition did not pay it was filed. The defense of the respondent company is two fold:

1. The petition is hopelessly barred by the limitation and

2. The petitioner did not provide proper and efficient services and in fact even the petitioner acknowledged its inefficient handling because of which petitioner was willing to settle the deal for Rs. 25 lakes out of which a sum of Rs. 18.75 lakes had been paid by the respondent to the petitioner in good faith. However, respondent, in view of failure on the part of the petitioner to fulfilll its obligation properly because of its inefficient handling of the work, refused to give any amount in excess ofRs.18.75 lakes already paid by the respondent and, therefore, no further amount is due and payable. Since issue of limitation was the bone of contention, both the parties argued this point exhaustively. We may note certain facts relating to the issue of limitation in chronological order:16.6.1997 Agreement entered into between the parties. Clause relating to payment of commission and validity period contained in this agreement are as under:

"Your Commission:

We are agreeable to compensate by you paying a lump sum commission of Rs. 7,500,000/- (Rupees Seven million five hundred thousand only) as follows:a) 50% on receipt of advance payment from the customer's) 50% prorate during execution of the contract.

Validity:

This appointment will remain valid for a period of 24 months or uptil conclusion of the contracts whichever is later.''3.7.1997 Invoice in the sum of Rs. 37, 50,000/- is raised.10.7.1997 Payment of Rs. 18, 75,000/- made.21.3.2001 Present petition filed. From the aforesaid chronology, it is obvious that petition is filed much after the lapse of three years from the part payment made on 10.7.1997. However, learned counsel for the petitioner submitted that the validity of the agreement was 24 months ortill the conclusion of the contract whichever is later. According to him although the contract was concluded much later, even if three years period is to be counted after 24 months i.e. 16.6.1999, the petition would be within limitation. Learned counsel for the respondent on the other hand submitted that as per the clause relating to commission, 50% payment was to be made '' on receipt of advance from the customer."

2. Therefore, cause of action to receive this payment arose in favor of the petitioer on the date when advance payment was received by the respondent from the customer. He submitted that the Invoice in question was raised on 3.7.1997 when the advance payment was received and, therefore, three years period was to be counted from that date. In the present case since part payment was made on 10.7.1997, period of three years could be counted from this date which expired on 9.7.2000 and, therefore, present petition is time barred. After considering the respective submissions, I am inclined to agree with the contention of the respondent and hold that the petition filed is relating to the purported debt which has become time barred. The petitioner has himself placed on record letter dated August 19,1997 demanding balance payment of Rs. 18.75 lakhs wherein it is, inter alia, mentioned '' meanwhile, we would be thankful if you can have the payment of the outstanding sum of Rs. 18,75,000/- expedited against our Invoice dated 3rd July,197''. Similarly in the statutory notice dated 27.7.1998 sent by counsel of the petitioner, following averments were made:

"That our client made their efforts and as a result thereof, you were awarded the said contract and were paid the mobilisation advance on 1/2nd July,1997 and as such our client became entitled to the first installment of the payment of their remuneration."

Even in para-14 of the petition the petitioner has maintained by stating as under:

"The petitioner company contacted the respondent company in or about 20th July,1997 over telephone and reminded them of the payment which was to be made by the respondent company to the petitioner company on or about 17th July,1997."

3. It is thus clear from the aforesaid stance of the petitioner itself that according to the petitioner payment had become due and was to be paid by 17.7.1997. That is the term even in the agreement as per which 50% amount was to be paid on receipt of advance from the customer. It could not be disputed by learned counsel for the petitioner that invoice was raised only after the advance was received by the respondent from the customer. The contention of the petitioner that the petitioner could ask for this amount during the currency/validity of the contract and, therefore, three years period is to start only from 16.6.1999 when the validity period of the agreement expired is clearly misconceived. This submission would have relevance, had the claim of the petitioner been in respect of balance 50%, which was to be paid, prorate during the execution of the contract. Insofar as first 50% is concerned, the contract categorically provided that this amount was to be paid on receipt of advance from the customer. Therefore, the cause of action accrued in favor of the petitioner to receive this amount immediately when the respondent from the customer received the advance. Learned counsel for the petitioner referred to the judgment in the case of an and Synthetics v. An and Synthetics Employees Union 2001 VI AD (DELHI) 233 to buttress his submissions that since the contract had not been terminated, in the absence of termination, the debt would not become time barred. However, this judgment would not be of any assistance to the petitioner. That was a case of payment of wages to the workmen under an agreement between Management (Company) and the Workmen and order of winding up was passed primarily on the ground that apart from the fact that company was unable to pay its debts, in view of dismal picture of the company as payment had not been made by the company and it had not been carrying on any business for more than 8ears, the winding up order was upheld by the Division Bench. Other judgment relied upon by the learned counsel for the petitioner was of this court in the case of Diwan Chand Kapoor v. New Rialto Cinema (P) Ltd. 1987 (62) Company Cases 810. What was held in that case was that if petition for winding up was properly maintainable when filed, there would not be any question of debt becoming time barred during the tendency of such a petition. We are not dealing with this position in the present case. He, even before the petitioner approached the court, debt had become time barred. It is trite law that if claim is for payment of dues which has become barred by limitation, company petition is not maintainable (see Chandradhar Goswami and Ors. v. Gauati Bank Ltd. and Anil Pratap Singh v. M/s.Onida Savak Ltd 2002 VI AD (DELHI) 713). Although not necessary, it may, however, be mentioned that there is even a dispute about the payment of the alleged dues as case of the respondent is that petitioner did not perform its part of the agreement efficiently. Admittedly, the petitioner has not claimed balance 50% and no invoice was raised for this purpose. One thing became clear is that the petitioner had not carried out its full obligation under the contract otherwise it would have raised invoice for balance 50% amount as well. Again it has also come on record that the petitioner had agreed to accept Rs. 25 lakhs against invoice raised which would show that the petitioner even was ready to accept Lesser amount. However, respondent was not willing to give anything more than what was already given as according to the respondent the petitioner did not deserve any further amount in view of inapt and inefficient handling of the project. Therefore, even otherwise it is not a case where this court should exercise its discretionary jurisdiction. This petition is accordingly dismissed.