REDIFFUSION Vs. SOLIDAIRE INDIA LTD

JUDGEMENT

(1.) CHALLENGE is made to an order of dismissal of C. P. No. 25/97 filed by the appellant herein seeking a relief of winding up of the respondent company.

(2.) THE case of the appellant/petitioner is as follows: the respondent company appointed the appellant as its exclusive advertising agent by letter dated 11. 4. 1994. Pursuant to the same, the appellant provided advertising services to the respondent. For the services rendered between October 1994 and July 1995, a sum of Rs. 74,79,213. 81 as on 31. 3. 1996 was due and payable by the respondent along with interest from 1. 4. 1996 as per the bills raised by the appellant. When the appellant approached the respondent, they expressed their inability to make payments. As the respondent failed to honour the bills of exchange, the appellant's bank refused to discount further bills of exchange accepted by the respondent. The respondent admitted part of its liability to the extent of Rs. 60,58,282. 95 by letter dated 27. 11. 1995. The appellant has filed a civil suit in C. S. No. 334 of 1996 on the file of this Court for recovery of the amount due to them. Though the respondent filed a written statement, there is no valid defence to the suit claim. The appellant caused a statutory notice to the respondent on 21. 12. 1996. In the reply dated 10. 1. 1997, the respondent denied its liability. The respondent company is in an adverse financial position as evidenced by its annual accounts. The respondent had stopped its manufacturing activities and has become commercially insolvent, and hence it was to be wound up.

(3.) THE respondent resisted the petition by filing a counter stating that there is no debt due and payable to the appellant/petitioner within the meaning of the debt under the provisions of the Companies Act; that even according to the appellant, the respondent is only an agent of the principal and the respondent cannot be sued in view of Section 230 of the Contract Act; that since a suit has already been filed by the appellant, it is a matter to be decided in that suit; that there is a bonafide dispute in relation to the claim made by the appellant; that in order to promote the sale of the products, the appellant was appointed as an advertising agent; that the appellant was appointed so for Grundig Products; that the respondent was not the beneficiary as alleged by the appellant; that M/s. Grundig Electronics India Private Limited were the beneficiaries for the services rendered by the appellant; that the appellant has to work out its remedies in the suit filed by them, and hence the petition was to be dismissed.