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TMI Blog2016 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... r was appointed as new large account reseller in place of M/s. PC-WARE India Pvt. Ltd. and accordingly a change of channel partner (CoCP) form was executed between the Petitioner Company, M/s. PC-WARE India Pvt Ltd, M/s. Microsoft Corporations and M/s. Zuri Hospitality Pvt. Ltd., (Respondent-Company) herein whereby all the rights and obligations under the aforesaid purchase order read with related agreements were conferred upon the Petitioner-Company. After the aforesaid execution of the CoCP, the Respondent-Company continued to pay to the Petitioner few of the instalments but, thereafter, the Respondent-Company has refused to make such payment claiming it has terminated the contract and does not need the softwares any longer. It is further the case of the Petitioner that the Respondent- Company has no right to terminate the agreement after the supply and installations are completed especially when the Respondent-Company has used the software for over a period of one year. The Respondent-Company has neglected to make the payment of the outstanding dues after being served with the statutory notice for winding up. It is further the contention of the Petitioner that as such the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of certain specified software products on a licensed basis and, consequently, PCWare India Pvt. Ltd., was appointed as the authorised reseller on behalf of Microsoft in order to deliver the products to the Respondent-Company. The said Agreement was subsequently renewed from 01.10.2011. It is further their case that the Respondent-Company placed upon PC-Ware a purchase order dated 08.11.2011 for procuring certain products. The PO provided for payment of the licence fee on monthly basis and as per the explicit and unequivocal understanding between PC-Ware and the Respondent reflected in the PO, the agreed amount stated in the PO i.e. INR 92,77,617/-, was a cumulative price to be paid in instalments over an extended period of three years. However, it is their case that it was valid until the months from 08.11.2011 to 09.12.2011. The PO did not impose any lock in upon either of the parties beyond the terms nor did it impose any contractually binding obligation upon either of the parties to renew the PO upon such expiry. It is further their case that the understanding of the PO, the period was thereafter to be extended for three years would require to be renewed on monthly basis in orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- and the earnings per share of the Respondent-Company had reduced from Rs. 1.24 (profit) to Rs. 9.54(Loss) for the financial year 2012-13. It is further pointed out that a clear inference of commercial insolvency of the Respondent-Company is demonstrated from the admitted fact that the Respondent- Company has been delaying in making payments of an aggregate loan of Rs. 20.41 Crores due to the banks for the period from 18 to 86 days. It is also pointed out that the assets of the Respondent-Company have been mortgaged to the bankers for securing loans, advances and overdraft facility which for obvious reasons are procured for the purposes of meeting the operating losses which the Respondent- Company suffered. The allegations made in the affidavit in reply have also been disputed by the Petitioner by filing their rejoinder and producing documents thereto. 7. Shri Prasad, learned Counsel appearing for the Petitioner has pointed out that in terms of the Agreement, the purchase made by the Respondents was to be paid by specified instalments and in view of the default committed by the Respondent-Company in effecting such payment, a statutory notice for winding up was served on the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no reason for any winding up of the Respondent- Company. Learned Counsel has thereafter taken me through the Agreement to point out that the service Agreement between the parties was to make payments on monthly basis which itself shows that as the Respondents were not satisfied with the services rendered by the Petitioners, the Respondents were free to terminate the Agreement. Learned Senior Advocate has further pointed out that as there is a bonafide dispute with regards the alleged claim, the question of winding up of the Respondent-Company is not at all justified. In support of his submissions, the learned Counsel has relied upon the Judgment reported in 2011 All SCR 871 in the case of MM/s. IBA Health (I) P. Ltd. vs. M/s. Info-Drive Systems Sdn. Bhd., 2002(1) ALL MR 465 in the case of H. Q. Chemicals Ltd. vs. Care Formulators Pvt. Ltd., 2006(1) ALL MR 105 (S.C.) in the case of Mediqup Systems Pvt. Ltd. vs. Proxima Medical System G.M.B.H., 2013 (2) ALL MR 188 in the case of Deutsche Bank AG, London vs. Pearl Engineering Polymers Limited, 2012(3) ALL MR 294 in the case of Katare Spinning Mills Limited vs. Kotak Mahindra Bank Limited and 2013(1) ALL MR 51 in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts it has ordered for which payment has been made. For subscription Licenses, in the event of a breach by Microsoft, Microsoft will issue Reseller a credit for any amount paid in advance that would apply after the date of termination. 11. The other clauses which would be relevant is clause 2(c) of the Enterprise Agreement which reads thus : "2 How the Enterprise and Enterprise Subscription programs work. (a) ... (b) ... (c) Choosing and maintaining a Reseller. Each Enrolled Affiliate must choose and maintain a Reseller authorized in the Enrolled Affiliate's location. (i) When ordering through a Reseller. Orders under an indirect Enrollment will be made to the Reseller. Microsoft will invoice the Reseller according to the terms in the applicable Enrollment. The Reseller and Enrolled Affiliate will determine Enrolled Affiliate's actual price and payment terms." 12. The termination clause at no. 7 of the said Agreement, reads thus : 7. Term and termination (a) Term. This agreement will remain in effect unless terminated by either party as described below. Each Enrollment will have the term provided in that Enrollment. (b) Termination without cause. Eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services rendered to the Respondent-Company were to be paid to the Reseller who is the Petitioner herein. In such circumstances, the contention of Shri Kantak, learned Senior Advocate appearing for the Respondent-Company that the Agreement is only with Microsoft and the payments are not payable to the Petitioner, cannot be accepted. The terms of the Agreement clearly provide that such payments were to be made to the Petitioner. 14. The next aspect to be examined is as to whether the claim of the Petitioner to the tune of Rs. 66,08,282/- is the admitted debt payable to the Petitioner. In this connection, the Petitioner is claiming that they cannot be compelled to terminate the credit facility extended to the Respondent-Company as stated in the legal notice which is dated 18.10.2013 and, as such, entitled for a sum of Rs. 66,10,309/-. The Respondent-Company nevertheless are raising the contention that they have terminated the Agreement as on December, 2012 on account of deficiency in the services rendered but, however, it is contended by the Petitioner that the Respondent-Company were not entitled to terminate the Agreement and, as such, no valid letter of termination was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, I find that the admitted amounts payable by the Respondent-Company to the Petitioner, prima facie, would work out to be the sum payable from October, 2012 to February, 2013. In this connection, the learned Counsel appearing for the Petitioner stated that the amount payable for the said period, would work out to Rs. 10,99,615/-. 15. The remaining amounts claimed by the Petitioner as such are disputed which would have to be recovered by the Petitioner after filing appropriate proceedings in accordance with law. On the basis of the material on record and considering the submissions of both the parties, I find that the admitted amounts payable by the Respondent-Company to the Petitioner prima facie work out to Rs. 10,99,615/-. Admittedly, the said amount was not paid by the Respondent- Company after a statutory notice of winding up was served on the Respondent- Company and, as such, on the basis of the material on record, the Respondent- Company can be regarded as a creditor of the Petitioner for the purpose of winding up. Considering the averments of the Respondent-Company themselves, as far as such amount is concerned, it cannot be said that the Respondent-Company has substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been disputed. Admittedly, the software was purchased by the Respondent-Company pursuant to the Agreement and even assuming that the alleged termination has to be accepted, a sum of Rs. 10,99,615/- was due by the Respondent-Company to the Petitioner. 17. Consequently, in case of the default of the payment of the said amount or any part thereof within the time specified herein the petitioner would be entitled for the relief in the above petition. It is however, contended by the learned counsel appearing for the Petitioner that the winding up petition would enure for the benefits of all the creditors and as such, the question of making such order would not be justified. 18. But however, the Division Bench of this Court, Principal Seat at Mumbai, in the case of Videocon Industries Limited Vs Intesa Sanpaolo S.P.A., in Appeal (L) No. 29 of 2014 in Company Petition No. 528/2012 has observed at paras 42 and 43 thus : "42. When we so indicated at the conclusion of the arguments, learned counsel for Videocon, however, submits that in any view of the matter the learned Company Judge erred in directing Videocon to pay the amount to the Bank. It is submitted that at the most the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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