9911796707
TMI Blog2010 (4) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 petitioner says that though it is now not in dispute that the company's goods and fixtures and fittings have been removed from the shop-notwithstanding the petitioner initially seeking to exercise a lien thereon-the company is liable to make payment of the amounts due under the two agreements. The petitioner admits that an amount deposited by the company by way of security has been retained by the petitioner, but that would not cover the amount due from the company. There is an arbitration reference on the same subject-matter that has been initiated at the behest of the petitioner, though the parties cannot specify whether the reference was made before or after this petition was instituted. 4. The petitioner refers to clause 2.2 of the deed of lease. The petitioner says, and it is not disputed by the company, that there is a clause of similar import in the amenities agreement. Clause 2.2 of the deed of lease provides as follows : "2.2 This demise, which sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 served on 18-12-2008, claiming the rent, amenity fees and CAM charges and interest thereon for the delayed period. 8. Annexure H to the petition is a letter issued by the company that bears the date of 15-12-2008, by which the company apparently handed over the keys to shop No. F-31 at the mall to the petitioner. On 23-1-2009, a further notice issued by advocates representing the petitioner followed. The third paragraph of such notice recorded that the keys were handed over by the company to the petitioner on 17-1-2009, under cover of the letter dated 15-12-2008. The notice recorded that the petitioner was entitled to forfeit the entirety of the security deposit of Rs. 25,45,368 and demanded payment of the outstanding rent, amenity fees and other charges together with the sum of Rs. 58,29,509.50 under either agreement for the unexpired tenure of the lock- in period. 9. The company responded through advocates on 18-2-2009, asserting, inter alia, that the keys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 company in the said mall was not picking up as expected, discussions were held between the representatives of the company and the petitioner and an understanding was reached between the parties (hereinafter referred to as the said understanding). Pursuant to the said understanding the lease agreement dated February 27, 2008 and amenities agreement dated February 27, 2008, were given a go-by. 8. Pursuant to the said understanding the keys were handed over by the company to the petitioner on December 15, 2008. In terms of the said understanding the petitioner was required to refund the security deposit of a sum of Rs. 25,45,368 deposited by the company with the petitioner, to the company immediately upon receipt of the keys of the shop room. However the petitioner has failed and neglected to refund the said sum to the company in breach of the said understanding. A sum of Rs. 25,45,368 along with interest at the rate of 24 per cent per annum is due and outstanding from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 company. 14. In the several letters issued on behalf of the company to the petitioner around the time the company quit the said shop, beginning the letter bearing the date of 15-12-2008, there was no assertion of any previous discussion between the parties culminating in an understanding that the two agreements of 27-2-2008, would be given a go-by. There were several opportunities that the company had to assert such alleged understanding. Conventional wisdom would have that the understanding be recorded at the first instance and no later than when the keys were being delivered by the company to the petitioner. The letter bearing the date of 15-12-2008, is eloquent in its silence on the alleged understanding. The petitioner thereafter made a detailed claim in the letter of 23-1-2009, to which a considered response was issued on behalf of the company on 18-2-2009. There was no allusion in such reply to the alleged understanding that has been set up on oath in the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pecuniary liability in regard to a claim for damages, arises till a court adjudicates upon the claim for damages and holds that the defendant has committed breach and has incurred a liability to compensate the plaintiff for the loss and then assesses the quantum of such liability. An alleged default or breach gives rise only to a right to sue for damages and not to claim any 'debt'. A claim for damages becomes a 'debt due', not when the loss is quantified by the party complaining of breach, but when a competent court holds on enquiry, that the person against whom the claim for damages is made, has committed breach and incurred a pecuniary liability towards the party complaining of breach and assesses the quantum of loss and awards damages. Damages are payable on account of a fiat of the court and not on account of quantification by the person alleging breach. (iii)When the contract does not stipulate the quantum of damages, the court will assess and award compensation in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-estimate thereof is reflected in the contract itself. 18. On these tests, the company here may be on slippery ground. There is no dispute that both the agreements provided for a lock-in period. There is also no dispute that the company surrendered possession prior to the expiry of the promised tenure. The foundation of the claim is, thus, unquestionable. The ascertained amount is also apparent from the relevant clauses of the two agreements. But there is a further consideration that weighs with the Company Judge in addressing a creditor's winding up petition which has been recognised to be a perfectly proper remedy for enforcing payment of a just debt and a mode of execution which the court gives to a creditor against a company unable to pay its debts (see Hari-nagar Sugar Mills Co. Ltd. v. M.W. Pradhan [1966] 36 Comp. Cas. 426 (SC); quoting Palmer's Company Precedents). It may amount to unjust enrichment on the petitioner's part for the petitioner to be entitled both to the ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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. Though the petitioner has scaled down, at the final hearing, its demand for payment to a prayer for security being furnished, in principle, there is little distinction between the two. If a company has no defence or the defence set up is illusory or sham or practically moonshine, then the petitioner is ex debito justitiae entitled to an order of admission, whether or not an order of winding up is made at the second stage upon consideration of other factors. The discretion to require a company to furnish security is also upon the assessment of the defence to be illusory or sham or practically moonshine but where the company court shows mercy to the company to enable it to try and prove a defence in more protracted proceedings. The tests as enumerated in the context of summary proceedings under the Civil Procedure Code in Smt. Kiranmoyee Dassi v. Dr. J. Chatterjee AIR 1949 Cal. 479 and accepted by the Supreme Court in Mechelec Engineers and Manufacturers v. Basic Equipment Corporation [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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