9911796707
TMI Blog2014 (2) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery proceedings against Apara. That suggestion, wholly untenable, posits the existence of a binding and inflexible tripartite agreement with clearly spelled out terms applicable to all invoices and payments. There is none. Inflow’s cause is also betrayed by its own conduct. For, in its email of 2nd July 2010, it spoke of future payments being made into the escrow account and sought payment advice details for past direct payments. That puts the matter beyond the pale. Mr. Tulzapurkar is, therefore, entirely correct in his submission that there is no debtor-creditor relationship between Yahoo and Inflow. The escrow account was but a mode of payment. It brought no privity between Yahoo and Inflow. None of Inflow’s invoices are drawn on Yahoo, but always only on Apara. That they show Yahoo as the endcustomer does not establish any direct privity; it only specifies a destination, not a contractual liability - The petition is as thoroughly misconceived as it is misdirected and quite possibly mischievous as well - Decided against Petitioner. - Company Petition No. 425 of 2012 - - - Dated:- 23-1-2014 - G. S. Patel,JJ. For the Petitioner : Mr. Ravi Kadam, Senior Advocate, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomer placed an order with one of Inflow s channel partners or resellers, Inflow procured the required IT-related product from NetApp and had it supplied to the end-user through the channel partner or reseller in question. Inflow s liability to pay NetApp stood outside any recoveries it made from its resellers, partners or end-users. 4. Apara had placed several orders with Inflow for NetApp products for supply to Yahoo and to other end-customers. Inflow claims that as of July 2009, Apara owed it about Rs.1.42 crores. Apara seemed to be unable to pay this amount. Inflow refused to make further supplies till its dues were cleared. An escrow agreement dated 9th July 2009 was executed between Inflow, Apara and Axis Bank. A joint account was opened with Axis Bank in the names of Inflow and Apara. All end-customer payments were agreed to be routed through this account. 5. Inflows claim that the escrow agreement was suggested by Yahoo and Apara together because Yahoo needed the NetApp products desperately seems to me to be extremely unlikely. There is no material to support this. Yahoo was not a party to this escrow agreement. No end-customer was a party to it. The agreement was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly response being that that is a matter of no moment. Perhaps it is for this reason that Dr. Saraf, learned Counsel for Inflow, attempted to spell out from the correspondence the socalled tripartite escrow agreement that he claims binds Yahoo to making payments only into the Axis Bank escrow account. He took me through a compilation of documents (all annexed to the rival pleadings and only put together for convenience). The first of these is an undated letter from Apara to Inflow. It does not mention Yahoo by name at all, though it is with reference to the escrow agreement and is, therefore, presumably of around June or July 2009. Then there is a letter of 29th July 2009 from Apara to Yahoo, asking Yahoo to make payment into the escrow account. There are the invoices to which I have already referred. Dr. Saraf lays great emphasis on the next document, at page 19 of the compilation. This is an undated letter from Yahoo to Apara. It does not establish any privity between Yahoo and Inflow. It only says that there has been a delay in payment, and Yahoo acknowledges that it will make payment of the invoices mentioned in that letter into the escrow agreement. Again, no such tripartite a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer the amount of some of these Yahoo payments (but not all) into the escrow account. Inflow seems not to have objected at the time. It was not till 2nd July 2010 that Inflow made a grievance about direct payments. Inflow s email of that date is annexed to the affidavit in reply. In this, Inflow specifically asked that future cheque payments be made into the escrow account. As for payments already made, it asked for payment advice details to facilitate reconciliation. From this, it seems that Apara, though it received payment from Yahoo, did not transmit some of those payments into the escrow account. 10. Inflow s affidavit in rejoinder speaks of the dishonour of some of Apara s cheques. This is entirely irrelevant. It can form no part of Yahoo s liability to Inflow. The rest of the rejoinder does not carry the matter further. 11. A convenient tabulation of the various invoices and payments in question was tendered by Mr. Tulzapurkar, learned Senior Counsel for Yahoo. That tabulation makes for the most interesting, and telling, reading. Between 31st July 2009 and 9th July 2010, Yahoo placed 16 separate purchase orders. Each has a corresponding Apara invoice number. Inflow s cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady paid to Apara but which Apara has not paid into the escrow account. The suggestion that Yahoo must, its payments notwithstanding, be made to pay twice over is one that needs only to be stated to be rejected. 14. Seen in this context, Dr. Saraf s reliance on the decision of a single Judge of this Court in In the matter of Advent Corporation Pvt. Ltd., [1969] 39 Com Cases 463 is entirely misplaced, and little more than an attempt to salvage something from the rubble that is now Inflow s case. Dr. Saraf contends that Yahoo must be deemed to be unable to pay its debts. A presumption attaches to its failure to comply with a notice under Section 434(1)(a), and he need not establish Yahoo s commercial insolvency. That is quite beside the point. In order to succeed, there is a threshold requirement that Inflow must meet, and that is to show that a relationship of creditor and debtor existed between Inflow and Yahoo. Where Yahoo can show, as it has done, that there is no debt at all, and that it has an ample defence to the claim, the question of the deeming provision will not arise. It is not every claim, howsoever whimsical, which, if not paid must inevitably result in an order of w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
