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TMI Blog2006 (3) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the respondent-company at Kolkata and Chennai, the petitioner was asked to liaise with TNPL on behalf of the respondent herein to initiate negotiations to procure the order. For the services rendered, it is stated that the respondent had agreed to compensate the petitioner an amount not exceeding 5 per cent on ex-factory value of the equipment to be supplied by the respondent s principal from Germany. 3. The petitioner s contentions are that consequent on the efforts taken, TNPL has placed a purchase order on 1-3-2002, for the design engineering, and manufacture and supply of sheet cutter and online ream wrapping machine with labelier, spare parts including supervision of erection, start up and commissioning as per the terms and conditions stated in the purchase order. The total value of the equipment supplied by the respondent s principal from Germany to TNPL for the said sheeter project was to the tune of Euro 19,35,700. Paragraph 8 of the petition given the terms and conditions of the purchase order. The petitioner submits that the respondent issued a letter of confirmation on 16-9-2002, setting out the details of the schedule of payment and with reference to commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission as regard the amount payable by way of commission at 5 per cent on the services rendered. Learned counsel also submitted that the respondent cannot deny their status as agent of their principal in Germany. In the above circumstances, there exists a definite debt, which ought to have been honoured by the respondent-company. In view of the passive attitude in not giving reply to any of those letters including its statutory notice, learned counsel submits that the petition submitted by the petitioner-company merits acceptance and that the prayer sought for can be granted. 6. In support of his claim, learned counsel also relied on the decision of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125 (SC) and invited my attention to paragraph 21 at page 638 and submitted that where there is definite debt and the defence of the company is lacking in good faith, the petition filed by the petitioner merited acceptance by this court. Learned counsel placed reliance on the guiding principles laid down by the Supreme Court to the effect that : ". . . The principles on which the court acts are first that the defence of the company is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out reference to the fax message dated 25-6-2002, by Hindustan Paper Corporation Limited of Kolkata. Taking me through the letter of the petitioner-company dated 26-6-2002, addressed to the respondent-company and enclosing the fax message, wherein, Hindustan Paper Corporation Limited had addressed the letter to the respondent-company, the respondent s counsel submitted that the letter dated 16-9-2002, on which heavy reliance was placed by the petitioner was referable to the one given in letter dated 26-6-2002, enclosing the letter from the Hindustan Paper Corporation Limited. Learned counsel for the respondent submits that the said letter dated 16-9-2002, on which the claim is now based was being misused by the petitioner-company, to make an unmerited claim as regards the purchase order dated 1-3-2002, placed on TNPL for the German company. Learned counsel further submitted that the fax message of Hindustan Paper Corporation Limited, Kolkata, was addressed to the respondent-company as regards arranging for administration for proper technical evaluation of the respondent-company s product. Hence, the document dated 26-6-2002, enclosing the fax message af Hindustan Paper Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Standard Oil Additive (P.) Ltd. [2005] 128 Comp. Cas. 13 to state that mere assertion of a debt payable is not sufficient to attract the discretion of the court. Learned counsel also placed reliance on the observation of the Karnataka High Court that the machinery for winding up would not be allowed to be utilized merely as a means for realising debts due from the company. The essence of the principle laid down is that a prima facie case must be made out by the petitioner, which the respondent-company should shoulder the onus of disproving it, by showing that its defence is in good faith and one of substance. 14. Learned counsel for the petitioner also relied on the provisions of section 434 of the Companies Act and submitted that where the respondent failed to answer the statutory notice, a statutory presumption of a deemed inability to pay has arisen. Hence, invoking the presumption, the petition was to be allowed in favour of the petitioner. 15. Learned counsel for the respondent placed reliance on the decision of the Haryana Telecom Ltd. v. Himachal Futuristic Communication Ltd. [2006] 65 SCL 19 (HP) in support of the contention that a mere omission of reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e German company. The petition filed before this court, carries no reference, whatsoever, or the details as regards the status of the respondent-company as an agent nor offered any allegations that the respondent-company made the petitioner-company believe that they were accredited agent of the German company. There are absolutely no materials to show that on the assurance given by the respondent-company, the petitioner was led to the believe about the grant of commission for the services to be rendered, particularly, with reference to purchase order placed by TNPL. In any event, as I have stated in the earlier portion of this order, there is nothing to link the order placed by TNPL with the petitioner-company processing the same with the German company and the respondent-company acting as an agent of the foreign company. 19. In the letter dated 16-9-2002, relied on by the petitioner-company found in page 52 of the typed set of papers, there is no reference whatsoever as regards any of these contentions taken to be a basis for the claim. In the absence of any details therein, considering the fact that there were prior correspondence as regards a similar order placed by Hindusta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration by the court exercising jurisdiction under the Companies Act. The decision of the Supreme Court Madhusudan Gordhandas Co. s case ( supra ) was considered by the Supreme Court in the case of Pradeshiya Industrial Investment Corpn. of Uttar Pradesh v. North India Petro Chemical Ltd. [1994] 79 Comp. Cas. 835 wherein the Supreme Court considered the expression "unable to pay its dues" under section 433( e ) of the Companies Act and held that the said phrase has to be understood in a commercial sense that the provisions for winding up are not to be set in motion, merely as a means for realising the debt, particularly, when the company against whom such provisions are invoked are profit making organisations with sound financial position. 22. In the decision reported in Mediqup Systems (P.) Ltd. v. Proxima Medical System GmbH [2005] 124 Comp. Cas. 473 the Apex Court held that there must be a debt and the company must be unable to pay the debt. The debt under section 433 of the Companies Act must be a determined on a definite sum of money and where the debt is the subject of a bona fide dispute and the defence is a substantial one, the court will not wind up t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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