Express House Keeper (P) Ltd. vs Ensol Power (P) Ltd.
2017 Latest Caselaw 5200 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                       Reserved on: 11th September, 2017
                                      Pronounced on: 19th September, 2017

+     CO.PET. 117/2016
      EXPRESS HOUSE KEEPER (P) LTD.             ..... Petitioner
                   Through : Mr.T.L. Garg and Mr.Rohan Garg,
                             Advocates.

                           versus

      ENSOL POWER (P) LTD.                                ..... Respondent
                   Through :              None.

CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA

YOGESH KHANNA, J.

1. The petitioner company is engaged in providing man power services on hire. The respondent approached the petitioner and requested it to provide man power for pay roll management. This means on one side the respondent would select and employ the staff for its work and on the other side, the petitioner were to provide 'salary disbursal' to the employee by respondent on agreed terms. The written agreement dated 10.10.2013 was executed between the parties. The relevant clauses of the agreement in question read as under:-

"Clause (3) PERIOD OF AGREEMENT.

That this Agreement shall be effective in initially for a period of One year w.e.f. 01.10.2013 unless this agreement is executed for such further period of another one year and on such terms and

conditions as may agreed to by the SECOND PARTY thereto.

Clause (5) TERMS OF PAYMENT That the FIRST PARTY shall pay to the SECOND PARTY as per Annexure C, and the Service & Edu. Tax as applicable in total per month, subject to TDS for rendering the said services. That the FIRST PARTY will make the payments by cheque or Bank transfer within 60 days of submission of Bills. Second Party shall liable to disburse two months wages to the Manpower, but 3rd month salary shall be distributed only after receiving 1st month Bills payment from First Party.

Clause (6) SUBMISSION AND VERIFICATION OF BILLS

a) That the SECOND PARTY shall submit the bills by the end of the month for the said services, on monthly basis to enable the FIRST PARTY to verify and process the same and the FIRST PARTY will release the payment on proper verification of such bills.

Clause (12) TERMINATION/ SUSPENSION That the SECOND PARTY shall always be entitled to terminate and/ or suspend this agreement in whole or part, after giving one month notice similarly the SECOND PARTY shall have one months notice in writing for termination of this Agreement.

Clause (14) JURISDICTION That this Agreement shall be deemed to have been made and executed at Delhi for all purposes. In the event of any dispute related to the interpretation or right of liabilities arising out of this Agreement, the same shall, at first instance, be amicably settled between both the parties. If any dispute is

not settled amicably, the same shall be subject to the jurisdiction of the Courts at Delhi only."

2. The petitioner rendered services in the year 2013-14 and an amount of ₹1.75 Crore was due and hence the petitioner asked the respondent to make the payment of its outstanding dues. The respondent rather sent two proposals to the petitioner for clearing its debt. The said proposals are dated 28.07.2014 annexed as annexure G to the petition, read as under:-

"RE: Payment schedule Dear Sir, We have gone through your letter and have noted the contents therein. Please note, none of the facts written to you in earlier letters are stories, they are all facts which can be verified. You have written about recovery department etc. and in this connection please be informed that recovery is done in case the company denies to pay but here the case is totally different. Also please note business relations can never be one sided and requires cooperation to face difficult situation which can come to either party. Now we are running through a very tough financial situation due to reasons known to you and shall request you to accommodate and cooperate with us during this period. Your actions like going to our customers, involve your recovery department will effect our repayment capacity adversely. We are giving the payment schedule below which is perhaps the best possible that we can offer at this point of time. You are requested to accept the same as a special case.

a) July 2014 10 lakhs

b) August 2014 30 lakhs

c) Sep 2014 30 1akhs

d) Oct 2014 30 1akhs

e) Nov 2014 30 lakhs

f) Dec 2014 balance amount

Secondly, we are ready for the option discussed with you in our office that we will pass on the total payment that comes to us from customers, after our day to day expense which is very nominal, to you and you pay the salaries to our employees from our disbursed amount only and the pending will get adjusted gradually from the liability. Further, it is also possible that we pay you the extra pending of 34 Lakhs by 10th to 12th of august and again the cycle starts as it was earlier. This would help us a lot in this situation and your cycle will also run smoothly.

You are requested to approve any one of these option so that we can arrange accordingly. N. Chakraborty."

3. Vide this letter though the respondent company admitted its liability but preferred to pay it in installments. After discussions between the parties, on 28.07.2014 the final payment schedule was finalized by the petitioner and he sought confirmation of the respondent company, but the respondent gave its own payment schedule and undertook to remit ₹1.30 Core between July and November 2014 and to clear the balance by December, 2014. However, the respondent remitted only ₹1.10 Crore.

4. On 07.04.2015, the respondent remitted an amount of ₹5.00 Lac claiming it to be goodwill gesture with the understanding that nothing is due and payable and even after that remitted yet another cheque No.008305500533 for ₹10.00 Lac drawn on ICICI Bank, Sector - 16, Faridabad, Haryana, but it bounced. Hence, the petitioner sent a notice dated 17.06.2015 for the balance amount of ₹54,01,111/- along with

interest @ 18% pa. On 25.06.2015 the petitioner sent another notice to the respondent qua the dishonoured cheque of ₹10.00 Lac. Though, the respondent company sent a reply to the notice dated 17.06.2015, but did not reply to the notice dated 25.06.2015. Thereafter, the petitioner sent the statutory notice dated 05.01.2016 and called upon the respondent to pay an amount of ₹54,01,111/-.

5. The respondent vide its reply dated 21.01.2016 maintained that nothing was due and payable and that the payment of ₹5.00 Lac was made only as a goodwill gesture and took the defences that the cheque of ₹10.00 Lac was an advance post dated cheque but omitted to state why the said cheque dated 07.05.2015 was signed by the director of respondent company.

6. The petitioner referred to the balance sheet of the respondent company as on 31.03.2014 filed with the Registrar of Companies which shows current liability of `9.7 Crore and hence it is alleged that company is unable to make the payment of its debt and it being commercially insolvent, be liquidated.

7. Learned counsel for petitioner has relied upon the proposal dated 28.07.2014 annexure G sent by the respondent company wherein the company categorically admitted that they are running through a very tough financial situation and requested to accommodate and cooperate with it and gave its own payment schedule - the best possible they could have offered at that time. Such payment schedule was given by the company on the demand raised by the petitioner per annexure E to the

tune of `1.75 Crore sent vide email dated 09.07.2014 at 10.55am to the respondent and it notes:-

"Subject: Pending Payments Dear Sir, In continuations to our discussions on the failure of timely payments of our huge outstanding of Rs.1.75 Cr. by you, we would like to know your plan on clearing our dues. It would be highly appreciated, if you can give us your plan of clearing our outstanding, which is already overdue (As per our interim understanding and also the existing Agreement between us) by EOD. Our management has taken this issue very seriously and asked for immediate solutions of the same. A potential Business partner like Ensol Power, we are always expecting a very positive response from your end.

Waiting for your response on subject matter, Thanks & regards, M. K. Paul"

8. The respondent company was then served in this petition on 02.11.2016 and Mr.Durgesh Gupta, learned counsel for respondent entered appearance and sought time to file reply. On 24.04.2017, yet again he appeared and stated that though reply has been filed belatedly along with an application seeking condonation, but the same was not brought on record. He was directed to bring the reply and application on record so that an effective order can be passed thereon but due to the lackadaisical attitude of the respondent company, a cost of `20,000/- was imposed on the respondent. The matter was thus listed on 11.09.2017 when again neither any effort was made to place on record the reply and

application for condonation nor anyone appeared on behalf of the respondent.

9. Hence, considering the admission on the part of the respondent company to pay the balance amount by December 2014 - per its own proposal - annexure G, there is no reason why this petition be not admitted.

10. Consequently, the petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the respondent-company forthwith. The citations be published in the Delhi editions of the newspapers 'Statesman' (English) and 'Veer Arjun' (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall deposit a sum of `75,000/- with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required. The Official Liquidator shall also endeavour to prepare a complete inventory of all the assets of the respondent-company when the same are taken over; and the premises in which they are kept shall be sealed by him. At the same time, he may also seek the assistance of a valuer to value all assets to facilitate the process of winding up. It will also be open to the Official Liquidator to seek police help in the discharge of his duties, if he considers it appropriate to do so. The Official Liquidator to take all further steps that may be necessary in this regard to protect the premises and assets of the respondent-company.

11. In addition, the directors of the respondent-company shall file their statement of affairs within 21 days from today before the Provisional Liquidator. It is made clear that in the event the said statement of affairs is not so filed within the specified time, the concerned Directors, including the Managing Director of the respondent-company, shall remain personally present in Court on the next date of hearing, in order to enable this Court to examine them, if required, on that date.

12. Respondent company is directed to file an affidavit before the Provisional Liquidator hereby appointed, within 2 weeks from today, furnishing the following details:-

(i) The names and address of the Managing Director and Directors of the respondent-company.

(ii) Latest address of the registered office and corporate office of the Respondent Company.

(iii) The location of the books of accounts of the respondent- company.

(iv) The details of the movable and immovable assets of the company and the details of the Bank account operated in the name of the respondent company and statement of account thereof.

13. The respondent-company, as well its directors, are restrained from alienating, encumbering, or otherwise parting with possession of the assets of the respondent-company without the leave of this Court. The Official Liquidator shall file a compliance report before the next date of hearing.

14. A copy of the petition along with annexures be supplied to the Official Liquidator.

15. Ordered accordingly.

YOGESH KHANNA, J

SEPTEMBER 19, 2017 M