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TMI Blog2009 (3) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... plausible and bona fide defence, and; that the petitioner has already instituted a civil suit for recovery of the disputed debt and that the machinery for winding up should not be allowed to be used merely as a means for realising a disputed debt from the company from the decisions relied upon by the respondent. - C.P. NO. 117 OF 2007 - - - Dated:- 23-3-2009 - VIPIN SANGHI, J. Sanjay Jain, Peeyosh Kalra, Amol Dixit, Sahil Taneja and Gaurav Pratap Singh for the Petitioner. Sandeep Sethi, Siddharth Chopra and Saurabh Srivastava for the Respondent. JUDGMENT 1. This company petition under sections 433( e ), ( f ) and 434(1)( b ) of the Companies Act, 1956 ("the Act") has been filed by the petitioner-company to seek orders for winding up of the respondent-company, namely, InterGlobe Aviation Limited. 2. The petitioner is a private limited company. The present petition has been filed on behalf of the petitioner through one Sh. C. D. Kingsly, appointed as the authorised representative of the petitioner-company by the board resolution dated January 9, 2007. It is stated that Mr. Hemant Sagar and Mr. Lecoanet, the promoters of the petitioner-company are wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectification to the respondent, since the TDS had been deducted on an incorrect basis. The respondent company, however, did not return either the cheque for Rs. 18,87,800 or issue a fresh cheque after deducting TDS at applicable rates. The petitioner submits that the tender of the cheque of Rs. 18,87,800 by the respondent clearly tantamounts to an admission of an undisputed liability. The petitioner states that the principal liability of the respondent in respect of 5 invoices raised by it towards the manufacture of uniforms, of which the respondent did not accept delivery, stands at Rs. 30,58,224.80. The details of the various invoices claimed to have been raised by the petitioner, and the computation by the petitioner of the amount which according to it is due and payable by the respondent-company are as follows : A. Particulars of uniforms delivered : S.No. Invoice No. Delivery date Total units Amount (Rs.) 1. 024/2006-07 20-7-2006 104 131,414.40 dt. 20-7-2006 2. 025/2006-07 31-7-2006 709 908,200.80 dt. 3-8-2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that there is no admitted liability of the respondent towards the petitioner, and on that ground the petition is liable to be dismissed. It is submitted that the petitioner has already filed a civil suit to recover, inter alia, the amount which the petitioner claims to be admittedly due from the respondent, and which forms the basis for this petition. It is submitted that the present proceedings cannot be a substitute for recovery of money. 8. Secondly, the respondent submits that the petitioner has suppressed material facts. The correspondence leading to the agreement dated 5-7-2006, which has material bearing on the claim of the petitioner and other correspondence, which establishes the fact that the petitioner breached the agreement have been withheld by the petitioner from this court. It is stated that though the agreement was executed only in July, 2006, the work on the designs for the uniform had started as early as in March, 2006 and the production process was initiated in April, 2006, thus giving the petitioner sufficient time to deliver the manufactured and well-fitted standard uniforms to the respondent within the contractual period. Moreover, the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d party which offered the competitive price quote... 8. In consideration of the designing, creating, production and supply of the garments, you shall pay us in accordance with the terms of annexure B to this letter and such payments shall be subject to with holding taxes as may be applicable and such other deductions as mentioned in this letter. We hereby agree to bear the cost of the creation of the designs and all labour and material used for the purpose of creating and supplying the garments including all fabric. 9. Except for force majeure circumstances as envisaged in clause 11 hereof, we acknowledge that if there is any delay in the delivery of the garments from the date that has been agreed to by the parties or if the garments that are delivered do not meet the specifications, delivery criteria or design requirements as agreed to by the parties, then LH shall be liable to pay IndiGo reasonable costs and expenses to compensate for IndiGos losses... 15. In addition to any other rights and remedies at law, this agreement may be terminated by giving written notice to the other party who has breached this agreement or defaulted in the following circumstances : 15.1 where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent deliveries and will do everything possible to maintain the dates and quality standards. It needs to be said that the order process needs to be streamlined in order for everybody to be on the same page and to avoid any last minute actions that do not allow us to respond to certain difficulties appropriately and affects our services ( e.g., fittings !) profoundly." 14. On 5-8-2009, the respondent sent the following e-mail to the petitioner: "Hi Vikas Following staff uniforms have not been received so far Pune Trupti Kamble Ravindra Rajput Bangalore Kishore Kumar Padmalatha Monesh Sapna Naidu Veena Amritha Vadval Geetali Neog Anusha Antony Saptarishi Mukherjee Sandya John Bharathi............do not have measurement G. Naveen Pal Guwahati Nivedita Singh Shahnaz Ahmed Rajeev Medhi............do not have measurement Ratnadeep Dutta Arindham Shaw Rongpi................do not have measurement Sidharth Choudhuri Himanshu Deka Imphal Ningaihlian Ratip Kumar Surchand Singh Soyah Ramesh Singh....................do not have measurement for the rest delivery would be the very latest Monday evening. Regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 21-8-2006, the respondent sent the following e-mail to the petitioner: "Hello Shan, I would like to bring to your notice the issues regarding the Pilots uniforms : 1.As like cabin attendants, all the pilots uniforms are either too tight or too loose. E.g., a pilot supposed to get a medium size shirt gets XXL and vice versa. And if it fits fine from the above, the length of the shirt is too short that it comes out from the trousers. 2.As everyone facing this problem, along with the major fitting problems with their jackets and trousers, I had to request every pilot to visit the factory once and show it to the designer/master there which is again very difficult for the pilots. 3.We have not received any shoes for pilots till date as the shoe made are not fitting according to the sizes given. 4.Complete sets for July uniforms not recd. till date. 5.Not recd. any belts with a bigger size. Only one size for the belt (10 belts) was initially given. Pilots are not at all happy with their uniforms fitting and especially getting incorrect sizes for shirts and jackets after taking the uniform measurements." 19. In the light of the aforesaid complaints, admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed items with the old material, do not panic. There will be a month of no issue. If you have employees currently not in uniform, black trousers, and the IndiGo issued shirts is the temporary look. All grooming aspects still apply. Any questions, Please give me a call @ 9818624636 Shan J. Iwanicki Director In-Flight." 20. The undisputed position which emerges on a perusal of the aforesaid correspondence between the parties, which is not even denied by the petitioner is that the uniforms as originally manufactured and supplied by the petitioner were having various defects. The fabric being used for stitching the uniforms was not of standard quality and was leading to leaking of the dyes. In the meeting of 21-8-2006, the new fabric was approved by the respondent. It was further agreed that cabin attendants, customer service agents, security and dispatchers will be issued new uniform in the new blue material. The deadline set for delivery of new uniforms to all stations and cabin attendants, who were currently using the uniforms with the old fabric/material was fixed as 21-9-2006. The schedule for taking of measurements of the staff and personnel at various locations was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be a reason for the respondent to withhold the payment of Rs. 20 lakhs that the respondent had tendered on 28-8-2006, after deducting TDS at a higher rate than what was applicable. The said payment had been made by the respondent towards discharge of its liability to make payment of 50 per cent of the invoice amount of Rs. 76,38,186.40 in advance. 23. Mr. Jain further submits that the petitioner repeatedly offered the supplies to the respondent in accordance with the mutual understanding arrived at between the parties on 21-8-2006, but on each occasion the respondent refused to accept the delivery. Reference in this regard is made to the e-mail sent by the petitioner to the respondent on 9-9-2006, which reads as follows : "Dear Sir, Please note that the captains/co-pilots was ready for delivery as requested on 4-9-2006. However the concerned person was not available for receiving the same at the IndiGo office, since then sir we have been trying to have them delivered. Please advise when can I send the same. Thanks." 24. Another e-mail was sent by the petitioner to the respondent on 12-9-2006 which reads as follows : "Dear Ritu We are still awaiting for yo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and its personnel and officers did not have proper uniform to wear till even after the operations of its airline took off. He submits that it is of utmost importance that the airline staff is properly attired to cast a good first impression on the customers as there is severe competition in the airline industry. He submits that the respondent had engaged the petitioner to carry out the work of providing uniforms for all the staff members of the respondent, only on account of the fact that the petitioner claimed to have the expertise and capacity to deliver in a timely manner uniforms of a high standard. However, the experience of the respondent was very disappointing and there were complaints not only regarding the quality of the fabric being very poor and losing its colour, but also of the petitioners failure to deliver various uniforms on time. Even the uniforms which were delivered failed to meet the specifications and measurements. He submits that the staff and personnel of the respondent airline even had to incur personal expenses to get the uniforms altered, and on many occasions even that was not possible as the uniforms were tight and there were no margins even to have the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .." 29. To the aforesaid averments of the respondent, the petitioner in paragraph 13 of the rejoinder has stated : "13. ...It is denied that no fabric was purchased by the petitioner pursuant to the aforesaid meeting for which the petitioner declined to give samples for verification. It is asserted that the petitioner was under no obligation to give samples of uniforms to the respondent as per the agreed course of action...." 30. Similarly, in paragraph 14 of the rejoinder the petitioner stated as follows : "14. ...It is submitted that the petitioner was under no obligation to provide any samples of the uniforms to the respondent for verification. Therefore, it is denied that in the absence of such samples being provided, the respondent is exonerated from its obligation to accept delivery. At any rate, the petitioner did not receive any request for samples on or around September 4, 2006 or September 12, 2006...." 31. Mr. Sethi submits that the petitioner has, therefore, failed to specifically state as to when, according to it, the new fabric was procured in terms of the meeting dated 21-8-2006. He submits that the approach of the petitioner, despite being in default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should be left to pursue the civil suit and the present petition is not maintainable. He relies on Mediqup Systems (P.) Ltd. v. Proxima Medical System GmbH [2005] 124 Comp. Cas. 473 1 , Pradeshiya Industrial Investment Corpn. of Uttar Pradesh v. North India Petro Chemical Ltd. [1994] 79 Comp. Cas. 835 (SC) and State Trading Corpn. of India Ltd. v. Punjab Tanneries Ltd. [1989] 66 Comp. Cas. 634 (Punj. Har.) in support of his submission that winding up proceedings is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed by the company, and that the fact that a civil suit had already been instituted to go into consideration while deciding the petition. 34. In his rejoinder Mr. Sanjay Jain states that the petitioner had made a demand for payment of Rs. 20 lakhs, the cheque in respect whereof had been returned to the respondent in good faith. He refers to the notice dated 26-9-2006, stated to have been issued to the respondent making the said demand. He has tried to explain the averment made in paragraph 13 of the rejoinder, as quoted hereinabove, by submitting that the same was made in response to the specific averment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect computation of tax deducted at source. Thereafter, the respondent-company failed to hand over the revised cheque to the petitioner. ( ix )That post-August 21, 2006, the respondent-company had not expressed any concern whatsoever vis-a-vis the uniforms produced exclusively for the respondent-company, in accordance with the terms agreed upon the parties." 36. Having heard learned senior counsels for the parties, I am of the view that the present petition is not maintainable and the same is liable to be dismissed since the same raises highly disputed questions of fact, which cannot be adjudicated upon in the present petition. I also find that the respondent has raised a bona fide defence, which cannot be said to frivolous or moonshine. The defence raised by the respondent certainly requires a trial and adjudication. It cannot be said to be a defence raised merely to avoid payment of an otherwise admitted liability. 37. Admittedly, there was default on the part of the petitioner in not supplying the uniforms of acceptable quality by 21-7-2006. The fact that the uniforms were defective stands substantially admitted by the petitioner. Even after the meeting dated 21-8- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the aforesaid was a ground taken for rejecting the uniforms by the respondent contemporaneously. This shows that the respondent had contemporaneously raised a dispute of fact, which cannot be said to be without substance in view of the respondent s averment that the petitioner had failed to procure the newly approved fabric after 21-8-2006, since no document to establish the purchase of the new fabric has been placed on record. The normal course of human conduct is : once bitten twice shy. Therefore the stand of the respondent that it wanted the petitioner to first satisfy the respondent regarding the use of the newly approved fabric before accepting the uniforms offered by the petitioner or paying for the same appears to be plausible. I may also refer to the e-mail communication sent by the respondent to the petitioner on 4-9-2006. This e-mail not only talks about the terms on which the respondent was willing to make payment to the petitioner, but also about the verification of the uniforms. The relevant extract of the said e-mail reads as follows : "... I am actually more surprised that you find the change in our relationship inexplicable ! The explanation is quite simple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tern master has visited all your stations. The minutes referred to earlier also mention the need of a person in charge of uniform logistics at IndiGo, as this task was theoretically given to us to be done entirely by Mr. Bhatia. The point I am trying to make is that we really need someone to be controlling your side of the collaboration. I would also like to mention your T-shirt order, that was placed in a very orderly manner after having test worn a pre-series confirmed by you and which we tried to deliver yesterday. This delivery was refused by IndiGo because you had the impression of having ordered a different product. The product you asked for at one point was not possible to be made in India, the IndiGo graphics we developed for you and which you wanted woven into the material, were too intricate, we had confirmed this a couple of months ago and the question had never been raised again. So as you see there are far more parameters in our collaboration than mentioned in the contract and your mail, I am sending this mail only to you because of the T-shirt solution you promised to tackle personally. Best, Hemant." 40. From the aforesaid response, it is seen that the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 days of the supply being made. Strictly speaking, this part of the agreement was not adhered to by the parties. It is also seen that the petitioner itself did not consider the failure of the respondent to make payment of 50 per cent advance as a breaking point in the relationship between the parties. The petitioner continued to manufacture and supply the uniforms, though substandard and not meeting the specifications and measurements, from time to time. It appears that the respondent tendered the aforesaid cheque as on account payment, but after the same was returned by the petitioner, the respondent did not tender the payment as it appears to have realised the continued failure of the petitioner to meet its contractual obligations including those undertaken on 22-8-2006. The tender of the cheque for Rs. 18,87,800 therefore, in my view, cannot be considered to be an admission of liability to that extent by the respondent towards the petitioner. 43. Though Mr. Sandeep Sethi, learned senior counsel for the respondent has sought to urge that the petition is not maintainable as the claim in the statutory notice is for a larger amount than what is claimed to be admittedly due t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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