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TMI Blog2010 (4) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 - SANJIB BANERJEE, J. Ranjan Bachawat for the Petitioner. Ms. Manju Bhuteria for the Respondent. JUDGMENT 1. The claim of the petitioning creditor is on account of sums payable by the company under two several agreements executed in February, 2008. The first of the two agreements is a deed of lease and the second is described as the amenities agreement. The company had taken on lease an area of about 763 sq.ft on the first floor of the Oberoi Mall at Goregaon (East) in Mumbai. 2. The petitioner says that both agreements contemplated a lock- in period which implied that the company had to honour its commitments for a period of 60 months thereunder regardless of the company using the facility. In other words, the petitioner suggests that the company was obliged under the two contracts to pay the monthly amounts contemplated thereby for the period of 60 months whether or not the company occupied the premises or surrendered the same to the petitioner. 3. The petitioner submits that for reasons undisclosed the company abandoned the premises and by an ante-dated letter issued on 17-1-2009, claimed that it had delivered possession to the petitioner. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undred and sixty six only) for each month." 6. The primary defence set up by the company is that the petitioner's claim is in damages, which is generally not entertained in this jurisdiction. The company also suggests that disputed questions arise and such disputes would be evident from the correspondence exchanged between the parties prior to the issuance of the statutory notice. The company asserts that the relevant clauses requiring the lessee to make payment at the contractual rate for the entire currency of the period of occupation contemplated by the agreements are penal in nature and the intention of the parties have to be ascertained which would call for more protracted evidence than is conveniently possible in the present proceedings. 7. The first demand of the petitioner was issued on 1-12-2008, possibly on a computer prompt, upon the rent and the amenity fees not being tendered in terms of the agreements by such date. The petitioner demanded that the company make payment of the identical sum of Rs. 1,19,167 under the two agreements within two days of the receipt of the written demand of 1-12-2008. The first reminder was issued on 8-12-2008 and a lawyer's notice was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther heads to the appropriate forum. The principal sum demanded in the statutory notice was for Rs. 1,16,59,019 and interest thereon. The reply to the statutory notice was issued by advocates representing the company on 16-3-2009. The defence is summarised at the third and fourth pages of such reply under six heads. The company asserted that there was no debt due to the petitioner and the claims were false, mala fide and vexatious; that the company was solvent, had a large number of shareholders and was a profit-making venture; that the petitioner had wrongfully withheld the security deposit; that the termination of the agreement was baseless, vexatious and illegal; that the keys to the premises had been made over to the petitioner on 15-12-2009, but the petitioner had wrongfully interfered with the company's right to remove its goods from the shop; and, "the mutual terms of the agreement agreed upon at the time of handing over the possession of 15-12-2008, has been breached . . ." and notices issued by the petitioner were wrongful. 11. In the affidavit used by the company, paragraphs 7 and 8 thereof make interesting reading : "7. As the business at the retail outlet of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding the letter dated 15-12-2008, being dated as it was, neither were the keys nor was such letter handed over to the petitioner prior to 17-1-2009. It is an almost inescapable inference that needs to be drawn from the first complete paragraph appearing on the second page of the company's letter of 18-2-2009. The company acknowledged that a formal receipt as to the surrender of possession of the shop was issued by the petitioner only on 17-1-2009 and the company complained that this was with ulterior motive since the keys had been handed over on 15-12-2008. It is highly improbable that the possession of any premises is surrendered under cover of a letter demanding an acknowledgement of the receipt of possession but not insisting on the immediate issuance of the receipt. The acknowledgement of receipt of possession has far-reaching consequence; the obligation to pay occupation charges may be suspended from the date of the acknowledgement of receipt of possession. Yet, the company complained of the receipt being issued by the petitioner more than a month after possession was allegedly surrendered; and that too, in passing in response to a notice that alleged wrongdoing by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be used only for export and not for sale in the domestic market ; and, that the company had purchased 1827.70 MT of coffee and had paid for and taken delivery of the major part thereof but the balance of 654.6 MT of coffee was discoloured and did not conform to the specifications for sale in the international market. It was the order of admission of the petition that was assailed and the company in the present case relies on the Division Bench judgment in the distinction that it makes between a debt and a claim in damages. The company has referred to the following passage (page 403) : "We will now cull out the principles for ready reference : (i)A 'debt' is a sum of money which is now payable or will become payable in future by reason of a present obligation. The existing obligation to pay a sum of money is the sine qua non of a debt. 'Damages' is money claimed by, or ordered to be paid to, a person as compensation for loss or injury. It merely remains a claim till adjudication by a court and becomes a 'debt' when a court awards it. (ii)In regard to a claim for damages (whether liquidated or unliquidated), there is no 'existing obligation' to pay any amount. No pecunia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition, there is no statutory bar thereto. For instance, upon a party asserting a claim in damages it is open to a company to admit the claim and for the creditor to subsequently found a winding up petition on the admission. It is true that the petition would then be based on the admission and not on the original claim in damages, but the foundation of the claim cannot be lost sight of. The rationale for company courts repelling winding up petitions founded on claims in damages may be in the twin problems that such claims present. There has first to be an assessment of the breach and, thus, of the basis of the claim; and, subsequently, of the ascertainment of the quantum. Neither is generally capable of being addressed on affidavit evidence in summary proceedings. But such a problem may not arise if the foundation of the claim is established and the quantum has been agreed upon. It is now legally accepted that the parties may make a genuine pre-estimate of the quantum of damages by incorporating a liquidated damages clause in the contract. It is also accepted that upon the factum of damages being established the court may not engage in ascertainment of the quantum if a genuine pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity fees may be penal in nature and in derogation of the Indian Contract Act, 1872. It would be, at any rate, a matter of involved evidence at the very least. As far as the deed of lease is concerned, there is no material to show whether the space vacated by the company has been let out or attempted to be let out by the petitioner; as to whether diligent steps have been taken by the petitioner to mitigate the loss. Further, the period of 60 months has not expired yet; in fact, only about half the period has been covered by now. In the present proceedings the test is not to finally assess the merits of the claim or the defence unless the defence is such that it is demurrable. The company court will proceed no further once it sees that a triable issue has been raised which calls for a more detailed scrutiny. Just as it would not do for a company to create an illusion of a defence, it is also mandatory that a petitioning creditor affirmatively establish the debt before the petition can progress to the second stage after admission. It is for such reason that the petitioner has to be left to pursue the claim in the arbitral reference or in a suit that the petitioner may bring. 19. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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