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TMI Blog2009 (6) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... position of the appellant is sound. Appeal allowed. - A.P.O.T. NO. 170 OF 2004 C.P. NO. 441 OF 2002 - - - Dated:- 30-6-2009 - SURINDER SINGH NIJJAR AND BISWANATH SOMADDER, JJ. Anindya Mitra, Utpal Bose, Sabyasachi Sen for the Appellant. Ahin Choudhury, Mukti Ghosh, Puja Das Chowdhury Subhojit Roy and Debasri Dutta for the Respondent. ORDER Surinder Singh Nijjar, C.J. - This Letters Patent appeal has been filed against the judgment to the learned Single Judge dated 23-2-2004 admitting the winding up petition to the extent US $95,659.54 equivalent to Rs. 45,10,347.30 paise with interest at the rate of 9 per cent per annum from the date of winding up notice until payment is made. 2. The petitioning creditor is carrying on business of leasing out inter alia various types of Dry-van containers. It claims that at the request of the Company, the petitioner agreed to grant and the Company agreed to take on lease for an initial period of one year commencing from 1-7-1997, Dry-van containers of different specifications. The terms and conditions of such leasing were recorded in writing subsequently in an agreement executed on 30-1-1998. The agreement was, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was served by the petitioner through a letter dated 8-4-2002. The notice was duly sent to the petitioner at the registered office of the Company through a Special Messenger. This was duly received by the Company on 8-4-2002. It is pointed out in the petition that inadvertently the petitioner had wrongly mentioned that total claim of US $111,372.99 up to and including 28-2-2002. The notice was duly accepted by the Company by letter dated 29-4-2002 through its Solicitor. In this letter the Company expressed its surprise to read the contents of the letter and the petition dated 8-4-2002. The Company was requested to send copies of the alleged agreement before any reply is given to the statutory notice. The petitioner claims to have offered inspection to the Company. Since, the Company has failed or neglected to pay the sums due, the petitioning creditor had moved for winding up of the Company before the Company Court. 4. The petitioner in its affidavit-in-opposition disputed the allegations contained in Paragraphs 6 to 8. Thus, their existence of the claim i.e., lease agreement dated 1-7-1997 and the subsequent amendments thereto have been denied. It claims that the signatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingle Judge holds that there was an agreement entered into between the Company and the petitioning creditor. It is also held that from the documents it is evident that Astra Marine Pvt. Ltd. has something to do in the matter. The learned Single Judge observed that whether or not Saileswar Ghosh is the Director of the Company in question, he did act with the knowledge of the Company. Therefore, following the principle of law laid down in the case of Freeman Lockyer (A firm) v. Buckhurst Park Properties (Mangal) Ltd. [1964] 1 All. ER 630 (CA), it is held that the Company is liable to pay all the amounts due to the petitioning creditor. Thus, the petition has been admitted. The Company has been given a chance to pay all the dues in 10 equal instalments commencing from 2-4-2004. Hence, this Letters Patent Appeal, by the Company. 7. We have heard the learned counsel for the parties and perused the Paper-book. 8. Mr. Anindya Mitra, learned senior counsel appearing for the appellant submitted that all four pillars of the Judgment of the learned Single Judge are not non-existent. The agreement on the basis of which business transactions between the company and the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, in including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the "actual" authority, it does create contractual rights and liabilities between the principal and the contractor. It may be that this rule relating to undisclosed principles which is peculiar to English law, can be rationalised as avoiding circuity of action, for the principal could in equity compel the agent to lend his name in an action to enforce the contract against the contractor, and would at common law be liable to indemnify the agent in respect of the performance of the obligations assumed by the agent under the contract. An apparent or ostensible authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndeed, when the realities of the case are examined, I think that it is the only inference that could properly be drawn. [Emphasis supplied]" Lastly, I would refer to the fact that it was the defendant company s own case (and indeed a subject-matter of complaint on their party) that the second defendant was acting throughout as if he were himself the owner of the property. Thus, it was complained that he appeared on television and behaved as if he was the owner. Reliance was also placed on the fact that the second defendant dealt with the plaintiffs themselves as if he was the owner of the property. All this, as it seems to me, goes to support the view that the second defendant was acting throughout a managing director. ****** Having regard to all these considerations I can see no good ground for interfering with the Judge s finding of fact that the second defendant throughout was, to the knowledge of the board, acting as managing director of the defendant-company." 12. The analysis of the evidence of Willmer, L.J. was also accepted by Diplock, L.J. The proposition of law laid down by Diplock, L.J. would be applicable only in cases where there is clear evidence leading t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly cannot be defined as moonshine. Such a defence, therefore, cannot be ignored. Such being the position we are unable to hold that, there is a clear debt due and that the company is unable to pay the same. The principles to be followed by the company Court in examining the petition for winding up are well known and have been reiterated by the Supreme Court on numerous occasions. We may notice here only the judgment in the case of Mediquip Systems (P.) Ltd. v. Proxima Medical System GmbH [2005] 7 SCC 42 in which the Supreme Court clearly stated the principle with regard to exercise of discretion by the Company Court while considering a petition for winding up under sections 433( e ) and 434( a ) of the Companies Act, 1956. In order to make the matter absolutely clear we may produce here the relevant observations of the Supreme Court : "18. This Court in a catena of decisions has 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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