Saraswati Printers vs Blessing Advertising Pvt. Ltd.
2018 Latest Caselaw 2270 Del

$~CP-17
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                             Date of decision: 12.04.2018
+      CO.PET. 244/2015 & CA No. 1150/2015
       SARASWATI PRINTERS                              ..... Petitioner
                    Through            Mr.Rakesh Kakkar, Adv.

                          versus

       BLESSING ADVERTISING PVT. LTD.         ..... Respondent

Through Mr.Mukul Girdhar, Adv.

CORAM:

HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.(ORAL)

1. On 28.02.2018 I had heard the learned counsel for the parties and indicated that I am inclined to admit the petition to appoint the OL as provisional liquidator. At that stage, the learned counsel for the respondent sought an opportunity to take instructions from his client regarding payment of the dues of the petitioner. Thereafter, the learned counsel for the respondent has taken two adjournments on 19.03.2018, 03.04.2018 and now the matter has been fixed for today.

2. Today, the learned counsel for the respondent states that he is not getting instructions from his client and he would like to withdraw from the matter. I, hence proceed to decide the petition.

3. This winding up petition has been filed by the petitioner under Sections 433(e), 434 and 439 of the Companies Act, 1956 (hereinafter referred to as the Act) seeking winding up of the respondent company.

4. It has been pleaded that the respondent approached the petitioner to start business transaction and placed certain orders. On 25.01.2014 the respondent issued a cheque for Rs.73,500 in favour of the petitioner company leaving outstanding balance of Rs22,29,526.95/-. It is further pleaded that the respondent introduced its sister concern M/s. Life Essentials Personal Care Pvt. Ltd. which was said to be under control of the same management as of the respondent company. The sister concern had also failed to clear its dues. It is pointed out that on 01.09.2014 when the petitioner visited the registered office of the respondent, the respondent admitted separate liability of both the companies in writing and assured the release of the outstanding dues to the petitioner within three days. The respondent issued a cheque of Rs.5 lakhs towards the liability of sister concern M/s. Life Essentials Personal Care Pvt. Ltd. The cheque when deposited was returned unpaid. Subsequently, the respondent has paid the sum of Rs.5 lakhs.

5. A legal notice was issued to the respondent on 24.02.2015. Despite service, no payment has been received. Now this winding up petition has been filed.

6. I have heard the learned counsel for the parties on 28.02.2018.

7. The learned counsel for the respondent had on the said date made two submissions to oppose the petition. Firstly, he submitted that the letter of acknowledgement dated 01.09.2014 relied upon by the petitioner has been signed by Mr. Sanjeev Nayyar who is not a director or officer of the respondent company and the acknowledgement is of no avail and cannot be relied upon by the petitioner. Secondly, he submits that several e-mails are on record to show that there was a problem in the quality of the products

supplied by the petitioner. He relies upon several such e-mails in this regard. Hence, it was pleaded that no dues are payable to the petitioner.

8. I may first see the acknowledgement letter dated 01.09.2014 relied upon by the petitioner. The same reads as follows:

"Date: 1st September 2014, CREDIT BALANCE OUTSTANDING AS ON DATE It is agreed that following outstanding is confirmed from our side on account of M/s Life Essentials Personal Care Pvt. Ltd. admitted to pay amount of Rs 3531446.00 (Rupees Thirty Five Lakh Thirty One Thousand Four Hundred Forty Six Only) to M/s Saraswati Printers for the work executed by M/s Saraswati Printers in respect o the orders place by us. Our company has not paid the balance outstanding payment of Rs 13,01,920.00 (Rupees Thirteen Lakh One Thousand Nine Hundred Twenty Only).

Our Company also placed orders through our sister concern M/s Blessing Advertising Pvt. Ltd. and also ought to pay Rs 2229526.00 (Rupees Twenty Two Lakh Twenty Nine Thousand Five Hundred Twenty Six Only) to M/s Saraswati Printers.

We have handed over a cheque amount of Rs 500000.00, contain cheque no. 969925 dated on 10th October 2014 to account of M/s Life Essentials Personal Care Pvt. Ltd. out of our total outstanding payment duly signed by me and our other director in favour of M/s Saraswati Printers and the balance outstanding will be cleared as per above said commitment of 30 days of M/s Life Essentials Personal Care Pvt. Ltd. and as well as other payment on behalf of us.

Ms/ Life Essentials Personal Care Pvt. Ltd.

Sanjeev Nayyar Director

I, Vikas Narang partner of M/s Saraswati Printers accepting the cheque amount of Rs 500000.00 (Rupees Five Lakh Only) as token money out of total dues and Saraswati Printers agreed to take as per above said commitments of Life essentials Personal Care Pvt. Ltd.

M/s Saraswati printers

Vikas Narang Partner"

9. What is essentially pleaded by the respondent is that the acknowledgement is signed by Sanjeev Nayyar who is not a director or the officer of the respondent company.

10. The shareholdings of the respondent Company show that there is one Mr.Amandeep Singh who holds 75% shares in the respondent Company. In the connected company, namely, Life Essentials Personal Care Pvt.Ltd. the said Amandeep Singh holds 50% shares whereas Mr.Sanjeev Nayyar holds 50% shares. Hence, Mr.Sanjeev Nayyar and Mr.Amandeep Singh jointly hold 50% shares each in Life Essentials Personal Care Pvt. Ltd. It becomes manifest that for the respondent Mr.Sanjeev Nayyar is not an unknown entity. He had authority on behalf of the respondent Blessing Advertising Pvt. Ltd. to execute the above letter. Respondent and Life Essential Personal Care Pvt. Ltd. were operating as common economic entities.

11. In these facts, in my opinion, the acknowledgment dated 01.09.2014

that has been signed by Mr.Sanjeev Nayyar cannot be brushed off for the purpose of these proceedings. He had the authority on behalf of the respondent company to execute the said document.

12. As far as the complaints regarding quality are concerned, a perusal of the e-mails dated 23.12.2013 and 11.04.2014, shows that these e-mails have been written regarding the poor quality of the products received by Life Essential Personal Care Pvt. Ltd. None of these e-mails pertains to any defect which has been pointed out by the respondent. Hence, for the purpose of these proceedings, which are filed against the respondent, the respondent cannot be permitted to rely upon the complaints of quality of products sent to Life Essential.

13. I may note that when it comes to the reading the acknowledgement dated 01.09.2014, the plea is taken that it has been signed by Mr.Sanjeev Nayyar who is the director of Life Essential Personal Care Pvt. Ltd. but when it comes to saying that the goods supplied by the petitioner were defective, the respondent chooses to rely upon a communication sent by Life Essential Personal Care Pvt. Ltd. Obviously, the respondent cannot be permit to approbate and reprobate.

14. In view of the above, in my opinion, it is clear that the defence set up by the respondent is moonshine. The company is unable to pay its dues.

15. In Mediquipsystems (P) Ltd. vs. Proxima Medical System GMBH, (2005) 7 SCC 42 the Supreme Court held as follows:-

"18. This Court in catena of decisions held that an order under Section 433(e) of the Companies Act is discretionary. There must be a debt due and the company must be unable to pay the same. A debt under this section must be a determined or a definite sum of money payable immediately or at a future date

and that the inability referred to in the expression 'unable to pay its dues' in Section 433(e) of the Companies Act should be taken in the commercial sense and that the machinery for winding up will not be allowed to be utilized merely as a means for realising debts due from a company."

16. The settled legal position is that the debts claimed should be payable by the respondent company. It is only where the respondent company raises a bona fide dispute then no winding up petition would lie.

17. As noted above, in the facts of the above case the respondent company has failed to show any bona fide dispute.

18. I, accordingly, admit the present petition 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 Rs.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.

19. List on 24.08.2018.

JAYANT NATH, J.

APRIL 12, 2018/v corrected and released on 04.05.2018