E-CITY MEDIA PRIVATE LIMITED A PRIVATE LIMITED COMPANY Vs. SADHRTA RETAIL LIMITED A PUBLIC LIMITED COMPANY

JUDGEMENT

(1.) By an agreement dated 22nd May, 2008 the Petitioner appointed the Respondent as an exclusive agent for designated branding sites situated within the premises of a shopping mall. Shorn of detail, the Petitioner permitted the Respondent to display advertisements at the mall, in a theatre and upon ticket jackets. During the term of the agreement there were disputes over whether all the facilities under the contract were made available by the Petitioner to the Respondent. On 29th August, 2008 the Petitioner, while recognizing deficiencies, offered to extend the duration of the contract as compensation. The Respondent by its email of 2nd September, 2008 agreed to accept the compensation recommended and proceeded to state that a formal amendment to the contract ought to be signed by the parties. The Petitioner by a communication of 26th September, 2008 recorded that a revised duration issued as agreed towards compensation, was being forwarded to the Respondent. The term of the contract between the parties was to commence on 22nd May, 2008 and was to conclude on 31st July, 2009. The term was extended by a formal amendment to cover the months of August and September 2009. There was a further exchange of correspondence by which on 26th September, 2008 the Respondent acknowledged that there was a delay on its part in effecting payments. One of the directors of the Respondent also addressed an email of 1st November, 2008 furnishing an assurance that all payments would be cleared. This was followed by a communication dated 6th March, 2009 seeking a meeting to settle the pending issues. The Petitioner issued a statutory notice under Sections 433 and 434 of the Companies Act, 1956 on 19th December, 2008 and proceeded to terminate the agreement.

(2.) The claim which forms the basis of the petition for winding up has been particularized in Exhibits H and I to the Petition. The claim is for amounts due and payable between July 2008 until 31st December, 2008 (Exhibit H) and for the period between 1st January, 2009 until 31st July, 2009 (Exhibit I). Service tax dues have been claimed thereon. The total claim is in the amount of Rs. 25.02 lacs on which interest at the rate of 18% has been claimed.

(3.) The maintainability of the Petition has been questioned. The Respondent which has filed an affidavit in reply in these proceedings submits that a substantial part of the debt or dues alleged in the Petition is for loss or damages sustained on an alleged breach by the Respondent of the agreement dated 22nd May, 2008. It is urged that the determination of loss or damages will require evidential proof which lies beyond the summary nature of proceedings for winding up. It has been urged that no debt can be held to be due and payable unless the extent or loss of damages has been ascertained.