Astra Netcom India Private Ltd. vs Khoday India Ltd. & Anr.
2011 Latest Caselaw 6349 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                                Judgment delivered on:     23.12.2011

              IA No.1902/2011 in C.S. (OS). No.1367/2010

Astra Netcom India Private Ltd.                     .....Plaintiff

                     Through: Mr Jayant Nath, Sr. Adv. with
                                Mr L.M. Asthana and Mr Udit
                                Gupta, Advs.

                       Versus

Khoday India Ltd. & Anr                          .....Defendants
                     Through: Mr Gopal Jain with Mr Ankur Sood,
                              Mr Anand Sukumar and Mr Bhupesh
                              Kumar, Advs.
CORAM:-
HON'BLE MR JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order I shall dispose of the present application filed by the plaintiff under Order XII Rule 6 of CPC stating that the defendants have made admission of facts in their written statement. The instant recovery suit has been filed by the plaintiff for recovery of Rs.45,60,006/- along with interest @ 24% per annum from the defendants.

2. As per the plaintiff, it provided consultancy services to the defendants for setting up a call center at Kanakpura Road, Banglore. A dispute arose between the parties over payment of consultancy fee and certain cases were filed by the plaintiff against the defendants. A Company Petition No.88 of 2004 was also filed for winding up of the

defendant company on account of non-payment of dues amounting to Rs.4,63,02,424/- to the plaintiff. Thereafter the defendant approached the plaintiff for settlement of disputes and on 02.04.2005 an agreement was executed between the parties and the dues on account of were settled at Rs.200,00,000/-, Rs.15,20,006/- were settled on account of travelling expenses and Rs.20,40,000/- were settled for payment of service tax. Thus, a total liability came to Rs.2,35,60,000/-.

3. In the present application it is stated by the plaintiff that on 29.09.2010 the written statement was filed by the defendant No.1 and on 10.12.2010 the defendant No.2 also adopted the written statement.

4. It is stated the plaintiffs that the present case is based on the agreement dated 02.04.2005 which was executed between the parties, wherein, the details of amount due, mentioned in para 5 was Rs.2,35,60,000/-. The details of part payment made by the defendants is mentioned in para 6 and the remaining amount due is mentioned in para 7 of the said agreement. Thereafter, the defendants made part payment of Rs.62,00,000/- to the plaintiff on various dates w.e.f. 15.12.2005 to 04.06.2007.

5. As per the plaintiffs, in the written statement filed by the defendants, there is admission of the execution of agreement in para 1 sub-para C under heading preliminary objections. In para 1 sub-para I by mentioning total amount due by agreement i.e. Rs.2,35,60,000/- as per agreement dated 02.04.2005 the defendant admitted that amount due to the plaintiff is Rs.45,60,000/- and that till date made the payment of Rs.1,90,00,000/- which is admitted by both the parties and

after this payment difference of amount is claimed by the plaintiff as per the agreement comes to Rs.45,60,000/-. Thus the plaintiff has claimed the amount of Rs.45,60,000/- by way of this application.

6. The defendants have filed their written statement. Mr Gopal Jain, the learned counsel appearing on behalf of the defendants, has not denied the fact of the agreement arrived at between the parties. He has also admitted that the defendant No.1 has also paid a substantial amount of Rs.1,90,00,000/- out of the claim of Rs.2,35,60,006/- of the plaintiff. He submits that the defendant No.1 has actually signed the agreements in order to buy the peace, although, the defendant No.1 is not liable to pay the same to the plaintiff company. He states that the amount was paid under the threat of winding up of the defendant company and in view thereof the liability was admitted.

7. In support of his contention, Mr. Gopal Jain, the learned counsel for the defendants has referred to the decision of the Supreme Court in the case of IBA Health (India) Private Limited v. Info-Drive Systems Sdn. Bhd.; (2010) 10 SCC 553, wherein it was observed as under:

"33. We may notice, so far as this case is concerned, there has been an attempt by the respondent Company to force the payment of a debt which the respondent Company knows to be in substantial dispute. A party to the dispute should not be allowed to use the threat of winding-up petition as a means of enforcing the company to pay a bona fide disputed debt. A Company Court cannot be reduced as a debt collecting agency or as a means of bringing improper

pressure on the company to pay a bona fide disputed debt. Of late, we have seen several instances where the jurisdiction of the Company Court is being abused by filing winding-up petitions to pressurize the companies to pay the debts which are substantially disputed and the courts are very casual in issuing notices and ordering publication in the newspapers which may attract adverse publicity. Remember, an action may lie in appropriate court in respect of the injury to reputation caused by maliciously and unreasonably commencing liquidation proceedings against a company and later dismissed when a proper defence is made out on substantial grounds. A creditor's winding-up petition implies insolvency and is likely to damage the company's creditworthiness or its financial standing with its creditors or customers and even among the public.

35. We have referred to the above aspects at some length to impress upon the Company Courts to be more vigilant so that its medium would not be misused. A Company Court, therefore, should act with circumspection, care and caution and examine as to whether an attempt is made to pressurise the company to pay a debt which is substantially disputed. A Company Court, therefore, should be guarded from such vexatious abuse of the process and cannot function as a debt collecting agency and should not permit a party to unreasonably set the law in motion, especially when the aggrieved party has a remedy elsewhere."

8. On the other hand, Mr Jayant Nath, the learned Senior counsel appearing on behalf of the plaintiff, has referred to the

decision of the Constitution Bench in the case of Andhra Sugars Ltd. v. State of A.P..; (1968) 1 SCR 705, wherein it was observed.

"4. Under Section 4(1) of the Indian Sale of Goods Act, 1930, a con tract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. By Section 3 of this Act, the provisions of the Indian Contract Act, 1872 apply to contracts of sale of goods save in so far as they are inconsistent with the express provisions of the later Act. Section 2 of the Indian Contract Act provides that when one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal. When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise. Every promise and every set of promises forming the consideration for each other is an agreement. There is mutual assent to the proposal when the proposal is accepted and in the result an agreement is formed. Under Section 10, all agreements are contracts if they are made by the free consent of parties competent to contract for a lawful consideration and with a lawful object and are not by the Act expressly declared to be void. Section 13 defines consent. Two or more persons are said to consent when they agree upon the same thing in the same sense. Section 14 defines free consent. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake as defined in Sections 15 to 22. Now, under Act No. 45 of 1961 and the Rules framed under it, the canegrower in the factory zone is free to make or not to make an offer of sale of cane to the occupier of the factory. But if he makes an

offer, the occupier of the factory is bound to accept it. The resulting agreement is recorded in writing and is signed by the parties. The consent of the occupier of the factory to the agreement is not caused by coercion, undue influence, fraud, mis- representation or mistake. His consent is free as defined in Section 14 of the Indian Contract Act though he is obliged by law to enter into the agreement. The compulsion of law is not coercion as defined in Section 15 of the Act. In spite of the compulsion, the agreement is neither void nor voidable. In the eye of the law, the agreement is freely made. The parties are competent to contract The agreement is made for a lawful consideration and with a lawful object and is not void under any provisions of law. The agreements are enforceable by law and are contracts of sale of sugarcane as defined in Section 4 of the Indian Sale of Goods Act. The purchases of sugarcane under the agreement can be taxed by the State legislature under Entry 54, List 11.

Long ago in 1702, Holt, C.J. said in Lane v. Cotton:

"When a man takes upon himself a public employment, he is bound to serve the public as far as this employment goes, or an action lies against him for refusing."

The doctrine that one who takes up a public employment is bound to serve the public was applied to innkeepers and common carriers. Without lawful excuse, an innkeeper cannot refuse to receive guests at his inn, and a common carrier cannot refuse to accept goods offered to him for carriage. See Halsbury's Laws of England, 3rd Edn., Vol. 4, Article 375 and Vol. 21, Article 938. A more general application of the doctrine was

arrested by the growth of the principle of laissez faire which had its heyday in the. midnineteenth century. Thereafter, there has been a gradual erosion of the laissez faire concept. It is now realised that in the public interest, persons exercising certain callings or having monopoly or near monopoly powers should sometimes be charged with the duty to serve the public, and, if necessary, to enter into contracts. Thus, Section 66 of the Indian Railways Act, 1890 compels the railway administration to supply the public with tickets for travelling on the railway upon payment of the usual fare. Section 22 of the Indian Electricity Act, 1910 compels a licensee to supply electrical energy to every person in the area of supply on the usual terms and conditions. Cheshire and Fifoot in their Law of Contract, 6th Edn., p. 23 observe that for reasons of social security the State may compel persons to make contracts. One of the objects of Act No. 45 of 1961 is to regulate the purchase of sugarcane by the factory owners from the canegrowers. The canegrowers scattered in the villages had no real bargaining power. The factory owners or their combines enjoyed a near monopoly of buying and could dictate their own terms. In this unequal contest between the canegrowers and, the factory owners, the law stepped in and compelled the factory to enter into contracts of purchase of cane offered by the canegrowers on prescribed terms and conditions.

9. After having considered the rival submissions of the parties, there is no dispute that a company petition No.88/2004 was filed by the plaintiff for winding up of the defendant company on account of non-payment of dues amounting to Rs.4,63,02,424/- to the plaintiff. it is also not denied by the defendant company that the disputes between

the parties were settled by means of agreement dated 02.04.2005 and the defendant No.1 agreed for liability of Rs.2,35,60,000/-. It is also undisputed fact that the defendant had paid a sum of Rs.1,90,00,000/- in terms of the amicable settlement. If that is the position and admittedly the defendant has paid substantial portion of the amount of the claim of the plaintiff in terms of the settlement, then why the defendants are not paying the remaining amount in terms of the settlement. The learned counsel for the defendant has also not denied the fact that the defendant has not initiated proceedings in any court to suggest that the said agreement arrived at between the parties was under the threat of winding up of the defendant company. Therefore, the facts in the present case materially different than the facts of the case referred by the learned counsel for the defendants. I do not agree with the submission of the learned counsel who has argued that the trial in the present case is necessary.

10. In the case of Roop Kumar Vs. Mohan Thedani, (2003) 6

SCC 595 wherein the scope and meaning of the Evidence Act has

been discussed in great details, it was held as follows :

"13. Section 91 relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This section merely forbids proving the contents of a writing otherwise than by writing itself; it is covered by the ordinary rule of law of evidence, applicable not merely to solemn writings of the sort named but to others known some times as the "best evidence rule". It is in really declaring a doctrine of the substantive law, namely, in the case of a written contract, that of all proceedings and contemporaneous oral expressions of the

thing are merged in the writing or displaced by it. (See Thaver's Preliminary Law on Evidence p. 397 and p. 398; Phipson Evidence 7th Edn. p. 546; Wigmore's Evidence p. 2406.) It has been best described by Wigmore stating that the rule is no sense a rule of evidence but a rule of substantive law. It does not exclude certain data because they are for one or another reason untrustworthy or undesirable means of evidencing some fact to be proved. It does not concern a probative mental process - the process of believing one fact on the faith of another. What the rule does is to declare that certain kinds of facts are legally ineffective in the substantive law; and this of course (like any other ruling of substantive law) results in forbidding the fact to be proved at all. But this prohibition of providing it is merely the dramatic aspect of the process of applying the rule of substantive law. When a thing is not to be proved at all the rule of prohibition does not become a rule of evidence merely because it comes into pay when the counsel offers to "prove" it or "give evidence" of it; otherwise any rule of law whatever might reduced to a rule of evidence. It would become the legitimate progeny of the law of evidence. For the purpose of specific varieties of jural effects - sale, contract etc. there are specific requirements varying according to the subject."

11. Therefore, the application filed by the plaintiff under Order

XII Rule 6 CPC is liable to be allowed and the Court is empowered to

pronounce the judgment even in view of the provision of Order XV of

CPC.

12. Thus, I am of the view that the trial in the matter is not required as the parties are not at issue on any question of law or act to be determined further. The provisions of Order XII Rule 6 CPC are therefore applicable. The Court is empowered to pronounce the

judgment under the said provision besides the provision of Order XV of the CPC.

13. I allow the application filed by the plaintiff and consequently the suit of the plaintiff is decreed for a sum of Rs.45,60,006/- with costs. The plaintiff has claimed interest @24% per annum from the defendants. I feel that claim of the plaintiff for charging the interest @24% is not reasonable rather it was on higher side. Hence, this court is not inclined to grant the interest as claimed. However, I grant interest @8% per annum from the date of filing of the suit till the date of realization. Decree be drawn accordingly.

MANMOHAN SINGH, J.

DECEMBER 23, 2011 jk