Delhi High Court
Flipkart India Private Limited vs Discovery Publishing House ... on 6 July, 2018
$~CP-16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 06.07.2018
+ CO.PET. 444/2016 & CA 1909/2016
FLIPKART INDIA PRIVATE LIMITED ..... Petitioner
Through Mr.Amitesh Kumar and Ms.Prerita
Aggarwal, Advs.
versus
DISCOVERY PUBLISHING HOUSE PVT.LTD. ..... Respondent
Through Ms.Neha Garg, Adv.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.(ORAL)
1. This petition is filed for winding up of the respondent company under
sections 433(e), 434 and 439 of the Companies Act, 1956(hereinafter
referred to as the 'Act, 1956').
2. Brief facts are that the parties entered into a Vendor Agreement on
29.10.2011. In terms of the said vendor agreement, the petitioner company
was to purchase the products of the respondent company, namely, books and
then market and distribute the said products. The petitioner purchased
various books from time to time worth Rs.87,24,781/-. Necessary payments
have also been made to the respondent company.
3. However, over a period of time it transpired that the books purchased
by the petitioner from the respondent company were not moving and had no
buyers/takers in the market. As a consequence, the petitioner company was
left with a huge inventory and piled up stock of the unsold books. Hence, the
petitioner requested the respondent company to take back the unsold books
CO.PET. 444/2016 Page 1 of 5
and remit the amount due on account of return of the books. It is pleaded
that the unsold books were sent back to the respondent and hence, the
respondent is now liable to pay to the petitioner a sum of Rs.66,27,991/-. It
is pleaded that this amount has been duly acknowledged by the respondent
company. Subsequently on 04.02.2016 a winding up notice was sent to the
respondent company. On 08.02.2016 the respondent have sent their reply. In
the reply, it was stated that failure of the petitioner to sell the books cannot
be said to be on account of any default on the part of the respondent. It was
also stated that the respondent had never agreed to take back the unsold
books. Only as a goodwill gesture, a return of books was accepted to
accommodate the petitioner so that the respondent could adjust the amount
in the next consignment. However, the respondent never agreed for
refunding the amount.
4. I have heard the learned counsel for the parties.
5. The learned counsel for the petitioner vehemently relied upon the
statement of account whereby it is pleaded that the respondent have
acknowledged the pay of Rs.66,24,136/-. Based on this, he has pleaded that
the respondent company has failed to fulfil its obligation.
6. I may have a look at the said acknowledgement dated 31.08.2015,
which reads as under:
"Dear Flipkart Team,
We accepted that amount 66,24,136/- is payable to you.
As per the previous talk with your team we will adjust this
pending amount only against your future purchase. We can only
adjust this amount with supply of books against your future
purchase orders."
7. It is quite clear from the perusal of the above so called
CO.PET. 444/2016 Page 2 of 5
acknowledgement that respondent was acknowledging the amount of
Rs.66,24,136/- stating that the said pending amount would be adjusted only
against future purchases.
8. To the same effects are some of the emails which were sent later in
time which show the stand of the respondent company that they would
adjust the payment against future orders that may be received.
9. In fact, I had pointed out to the learned counsel for the petitioner that
the respondent would be obliged to take back unsold books and refund the
prices only in case there is a specific provision in the agreement between the
parties. The learned counsel for the petitioner has failed to show any
provision in the vendor agreement dated 29.10.2011 which obliges the
respondent to take back the surplus stocks lying with the petitioner and
refund the consideration paid.
10. The learned counsel for the petitioner however states that this
condition was mutually agreed between the parties and the respondent is
bound by the terms and conditions of the said agreement that was agreed
upon between the parties.
11. Under section 19 of Sales of Goods Act, 1930, the property in the
goods is transferred to the buyers at such time as the parties to the contract
intended it to be transferred. In the present facts, there is nothing to show
that when the goods were purchased by the petitioner, the title to the goods
did not pass to the petitioner. Hence, it cannot be said that the respondent
company is liable for the stated dues.
12. It is settled legal position that it is not the function of the company
court to enter into an adjudication of disputed facts which should have been
the subject matter of the Civil Suit.
CO.PET. 444/2016 Page 3 of 5
13. Reference in this context may be had to the judgement of the Supreme
Court in IBA Health (I) Pvt. Ltd. vs. Info-Drive Systems Sdn.Bhd., (2010)
(4) CompLJ 481 (SC) where the Supreme Court held as follows:-
"17. The question that arises for consideration is that when there
is a substantial dispute as to liability, can a creditor prefer an
application for winding-up for discharge of that liability? In such
a situation, is there not a duty on the Company Court to examine
whether the company has a genuine dispute to the claimed debt?
A dispute would be substantial and genuine if it is bona fide and
not spurious, speculative, illusory or misconceived. The
Company Court, at that stage, is not expected to hold a full trial
of the matter. It must decide whether the grounds appear to be
substantial. The grounds of dispute, of course, must not consist of
some ingenious mask invented to deprive a creditor of a just and
honest entitlement and must not be a mere wrangle. It is settled
law that if the creditor's debt is bona fide disputed on substantial
grounds, the court should dismiss the petition and leave the
creditor first to establish his claim in an action, lest there is
danger of abuse of winding-up procedure. The Company Court
always retains the discretion, but a party to a dispute should not
be allowed to use the threat of winding-up petition as a means of
forcing the company to pay a bona fide disputed debt."
14. The respondent has raised disputes that are bona fide. Clearly, the
contentions which are now being raised by the petitioner are the issues
which ought to have raised before the Civil Court. There is no merit in the
present petition. Needless to add that any observations made herein will not
in any manner prejudice the rights of the parties.
15. The petition is accordingly dismissed.
JAYANT NATH, J.
JULY 06, 2018/v corrected & released on 18.07.2017
