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2015 (11) TMI 1317 - HC - Companies LawWinding up petition - settlement of accounts - whether having regard to the emails exchanged it cannot be said that the company is not indebted to the petitioner? - Held that:- Both the agreements namely, the Distributorship Agreement 2009 and the Distributorship Agreement- Princeton 2011 clearly state that the company is a non-exclusive distributor of the petitioners. The company accepts that the said agreements are on a principal to principal basis and the company would be required to pay the price of the books sold and delivered at a discounted price. Moreover, nowhere in the agreements is it mentioned that the number of distributors that Random House could have was required to be limited, nor has there been any definition given to the ‘semi-exclusive distributor’. The allegation made by the said company that contracting with more distributors in the north and eastern zone, where they were conducting their distributorship is untenable. Terming this to be a premeditated conduct on the part of the petitioners to injure the business of the company and thus causing breach of contract amounting to a loss of 15 crore has no reasonable foundation. The matter regarding return of book s i.e. the RHI books which are in possession of MB at its warehouse in Delhi and Kolkata, has been duly considered by the petitioner in the legal notice issued by the attorney of the petitioner to the said company dated August 4, 2013. In the said notice, a solution has been suggested to SK Mehra with respect to the same. It is however seen that there has not been any confirmation received by the said company when in 2014 email, again the matter of sending the books back to RHI is asked by the company. However, despite the fact that both the distributorship agreements had already terminated owing to the failure or default in making timely payment, and that has also been acknowledged by the said company, the reason to wait for the confirmation of the petitioner seems groundless. . Prior to the issuance of the winding up notice there has been no contemporaneous document and material to show that the company has denied its liability and claimed damages. It has also been seen that the demand notices have been issued by the petitioner with respect to both Distributorship Agreement and Distributorship-Agreement-Princeton on June 17, 2013. In its reply the aforementioned allegations have been made. The said company has not been able to place any material, or document to substantiate any of the allegations later made by it. The said allegations are clear afterthought and made in order to avoid its liability. It can, therefore, be logically inferred that the disputes raised by the respondent company have been raised as afterthought and that the disputes were not raised contemporaneously. Thus, these are neither reasonable nor bona fide disputes and do not form substantial defence. The said company in any event has no defence for the amount admitted. The defence set up is illusory. The disputes sought to be raised by the said company is in the nature of afterthought and lacks bona fide and so in the present case the objection and contention cannot be sustained. In the present case it is evident that the denial by the company is motivated by an intention to evade payment. It is relevant to note that in the case of Ficom Orgarnics Ltd v. Laffans Petrochemicals Ltd. reported at (1998 (10) TMI 440 - HIGH COURT OF GUJARAT), after reaching the conclusion that the dispute raised by the respondent company against the petitioner's claim was not bona fide, time was granted to the company to pay the petitioner the claim amount.\ Having regard to the nature of the defence disclosed there cannot be any doubt that at least a sum of ₹ 1.38 crores was due and payable by the company to the petitioner. The company did not even raise any dispute contemporaneously and what emerges from the facts is that the defence raised and the claim made in defence to the action initiated by the petitioner were never raised at the relevant point of time or until the statutory notice was served upon the company. However, considering the plea that if in the arbitration proceeding the company is able to establish return of some books and adjustment thereof admit the petition for a sum of ₹ 60 lakhs. This amount is ascertained on a generous allowance being given to the company of all its grievances for rebate and SOR. The company has not been able to demonstrate before this Court that the Company is solvent enough to pay off the debts assessed in this winding up petition. Thus direct the company to furnish security for a sum of ₹ 60 lakhs to the satisfaction of the Registrar, Original Side, High Court, Calcutta on or before 15th December, 2015 which shall remain valid till the disposal of the arbitration proceeding
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