2012 (6) TMI 464 - HC - Companies Law

Winding up - petitioner-company acted as an agent to forward and custom clear respondent s cargo for voyages to its various clients abroad. However, the respondent had failed to pay the invoices in spite of repeated requests Held that - no agreement between the respondent and the petitioner-company. There is an agreement between the petitioner and the H for payment of freight charges and respondent is not liable to pay the amount. as per the order issued by the H , they will stitch the garments as per their specifications and supply the same to their agents in India, the agents in India in turn will ship the materials to its destinations and there is no responsibility of the respondent to pay any charges. in the absence of any contract between the petitioner and the respondent, the petitioner cannot insist upon the respondent to pay the debts of H . company petition is to be dismissed

Issues Involved:
1. Maintainability of the winding-up petition.
2. Existence of a contract between the petitioner and the respondent.
3. Liability for payment of freight and shipment charges.
4. Bona fide dispute regarding the debt.

Issue-wise Detailed Analysis:

1. Maintainability of the winding-up petition:
The petitioner filed under sections 433(e), 434(1)(a), and 439(1)(b) of the Companies Act, 1956, read with Rule 95 of Companies Court Rules, 1959, seeking winding up of the respondent-company for non-payment of debts. The respondent argued that the petition was not maintainable either in law or on facts, as there was no contract between the petitioner and the respondent, and thus no debtor-creditor relationship existed.

2. Existence of a contract between the petitioner and the respondent:
The petitioner contended that the respondent approached them to act as an agent to forward and clear its cargo for various clients abroad. The petitioner claimed to have performed their contractual obligations but did not receive payment for the invoices issued. The respondent denied any such contract, stating they had no agreement with the petitioner and that the petitioner was the nominated clearing and forwarding agent for H & M Hennes & Mauritz AB.

3. Liability for payment of freight and shipment charges:
The petitioner argued that the respondent was liable to pay the shipment charges as per the instructions from H & M Hennes & Mauritz AB and the norms of international commerce (INCO terms, CPT). The respondent contended that their responsibility ended upon delivering the goods to the H & M agents in India, and the freight charges were to be borne by H & M Hennes & Mauritz AB. The court noted that there was no agreement between the petitioner and the respondent regarding payment of freight charges. The agreement was between the petitioner and H & M Hennes & Mauritz AB, and the petitioner could not enforce the dues of H & M Hennes & Mauritz AB on the respondent.

4. Bona fide dispute regarding the debt:
The court observed that the respondent had a substantial and bona fide defense, arguing there was no contract with the petitioner and no obligation to pay the alleged dues. The court cited the Supreme Court's ruling in IBA Health (India) (P.) Ltd. v. Info Drive Systems SDN BHD, which held that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the winding-up petition and leave the creditor to establish his claim in an action. The court emphasized that the winding-up procedure should not be used as a means of enforcing payment of a bona fide disputed debt.

Conclusion:
The court concluded that in the absence of any contract between the petitioner and the respondent, the petitioner could not insist upon the respondent to pay the debts of H & M Hennes & Mauritz AB. The petitioner's claim was not substantiated, and thus, the company petition was dismissed.

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