Delhi High Court
Wacker Metroark Chemicals Pvt Ltd vs Mccoy Silicons Ltd on 17 May, 2012
Author: Manmohan
18
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CO.PET. 232/2012
WACKER METROARK CHEMICALS PVT LTD ..... Petitioner
Through: Mr. Partha Sil, Advocate.
versus
MCCOY SILICONS LTD ..... Respondent
Through: None.
% Date of Decision: 17th May, 2012
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J (Oral)
1. Present winding up petition has been filed under Section 433(e)
read with Sections 434 and 439 of the Companies Act, 1956 stating
that respondent company is unable to pay its debts allegedly
amounting to ` 38,48,466.67/-.
2. The facts as stated in the petition are that the petitioner supplied
silicon products to the respondent from September, 2010 to May,
2011. Learned counsel for petitioner has drawn attention of this Court
to the respondent's E-mail dated 03rd January, 2012 wherein the
respondent in its books of accounts has admitted that a sum of
`31,52,563.42/- is due and payable to the petitioner.
3. However, a perusal of the reply to the statutory winding up
notice reveals that the defence of the respondent is that the petitioner's
holding company namely, M/s. Wacker Chemie, Germany is liable to
pay monies in excess of ` 8 crores to the respondent. The relevant
paragraphs of the reply are reproduced hereinbelow:-
"5. Without prejudice to all other arguments available
to our clients, we are instructed to stated that at no time
have our clients ever admitted payments of any amounts to
your client. In fact, to the contrary, it is your client and
its holding company Wacker Chemie, Germany (alongwith,
M/s. Wacker Metroark Chemicals Pvt. Ltd., collectively
referred to as "Wacker") that are liable to pay huge sums
of monies to our clients.
6. You may be aware that our clients have on various
occasions by written communications and verbal
discussions sought the release of their claims currently in
excess of Rs.8 Crores (approximately US$1.65 million). In
this connection, representatives of our clients have held
various discussions in Germany and also at New Delhi,
Mumbai and Kolkata. Your client‟s alleged claims against
our clients are manifestly illegal, malicious and non-est in
law. Your clients has obviously not presented you with
correct facts.
xxx xxx xxx
8. We are instructed to state that in addition to
payments of aforementioned amounts due to our clients,
our clients are prejudiced by various other illegal and
unethical actions of Wacker, including but not limiting to:
a) Breach of the exclusively commitment given to our
client;
b) Termination of the entire distribution arrangement,
without any cause and prior notice to our client;
c) Deliberate sale of goods as loss leaders or at a
discounted and predatory price by Wacker in India,
to ensure losses to our client and destroy its market
and business;
d) Misuse by Wacker of confidential and proprietary
data that was provided by our client to Wacker in
good faith to destroy our client‟s business and to
create its own independent customer network;
e) Various defamatory and slanderous statements by
Wacker to cause loss and damage to our client‟s
goodwill and reputation resulting in serious
business losses to our client;
f) Default of payment by customer, strictly on account
of Wacker‟s conduct resulting in further losses to
our client;
g) Losses suffered by our client in undertaking
significant marketing and distribution expenses
based on the promises made by Wacker.
10. In view of the above, we do not wish to address a
parawise reply to your notices. Please be advised that our
clients specifically deny that any sum, let alone the sums of
Rs.33,58,150/- or Rs.31,52,563.42p. is either due or
payable to your client. As stated above, it is in fact
Wacker Metroark that is liable to pay a sum of Rs.8 crores
to our clients. Therefore, all threats in your notice under
reply and your notices dated November 4, 2012 are
baseless and illegal and are rejected by our clients."
(emphasis supplied)
4. Further, this Court takes note of the legal notice dated 04th
November, 2011 wherein it has been stated as under:-
"When the non-payment of the amounts due to our client
was discussed, you have never denied the amount due to
WMC but raised various extraneous and irrelevant issues
including receipt of feedback from Wacker Chemie A.G.,
Germany, in respect of your alleged pending claim with
them as will appear form your e.mail dated 9 th September,
2011 addressed to our client. You have been informed by
our client‟s e.mail dated 14th September, 2011, that
payments due to our client cannot be conditional upon
response from Wacker Chemie A.G., Germany."
(emphasis supplied)
5. Though learned counsel for petitioner admits that the
respondent has had business transactions with the petitioner's holding
company, but he states that the petitioner's holding company is an
independent corporate entity and consequently the aforesaid defence
should not be looked into by this Court.
6. However, this Court in its judgment dated 23rd March, 2011 in
Co. Pet. 131/2008 Pankaj Aluminium Industries Pvt. Ltd. vs. M/s.
Bharat Aluminium Company Ltd. has held that the doctrine of single
economic entity is not only well established, but also well recognized
by the Courts. In DHN Food Distributors Ltd. and Others v. London
Borough of Tower Hamlets [1976] 3 ALL ER 462 at Page 467, the
Court held as under:-
".....We all know that in many respects a group of companies
are treated together for the purpose of general accounts,
balance sheet and profit and loss account. They are treated as
one concern. Professor Gower in his book on company law
says : „there is evidence of a general tendency to ignore the
separate legal entities of various companies within a group,
and to look instead at the economic entity of the whole group‟.
This is especially the case when a parent company owns all the
shares of the subsidiaries, so much so that it can control every
movement of the subsidiaries. These subsidiaries are bound
hand and foot to the parent company and must do just what the
parent company says. A striking instance is the decision of the
House of Lords in Harold Holdworth & Co. (Wakefield) Ltd. v.
Caddies. So here. This group is virtually the same as a
partnership in which all the three companies are partners.
They should not be treated separately so as to be defeated on a
technical point. They should not be deprived of the
compensation which should justly be payable for disturbance.
The three companies should, for present purposes, be treated
as one, and the parent company, DHN, should be treated as
that one. So that DHN are entitled to claim compensation
accordingly. It was not necessary for them to go through a
conveyancing device to get it."
7. Accordingly, this Court is of the view that the defence of the
respondent would have to be examined. However, this Court cannot
do so as its jurisdiction is summary in nature.
8. Moreover, the Supreme Court in M/s. IBA Health (I) P. Ltd.
vs. M/s. Info-Drive Systems SDN. BHD. (2010) 10 SCC 553 has held
that "the Company Court is expected to ascertain that the company's
refusal is supported by a reasonable cause or a bona fide dispute in
which the dispute can only be adjudicated by a trial in a civil court."
(Refer 'para 31').
9. Consequently, the present petition is dismissed with liberty to
the petitioner to file a recovery proceeding in accordance with law.
10. It is made clear that the civil Court would decide the matter on
its merits without being influenced by any observations made by this
Court.
MANMOHAN, J
MAY 17, 2012
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