PERCEPT ADVERTISING Vs. SECUNDERABAD HEALTH CARE LIMITED

JUDGEMENT

(1.) The petitioner have filed this petition for winding up the respondent-company under section 439(1)(b) read with section 433(e) and 434(1)(a) of the Companies Act, 1956 (for short "the Act"). The petitioners are engaged in the business of providing advertising and promotional services as advertising advisers and advertising agents. In the course of business in February and March, 1993, the p petitioners were appointed and retained as advertising agents by the respondent-company, for successfully promoting the public issue of the respondent-company and also other allied activities. Pursuant to the appointment the petitioners had executed various assignments, i.e., publication in newspapers and magazines, press releases, press conferences, hoardings and advertisements for which various bills were raised which were acknowledged by the respondent. An amount of Rs. 9,58,966 was due in respect of outstanding bills to both the petitioners as on 19/10/1994. To the reminder dated 19/10/1994, issued by the petitioners, the respondent replied on 22/10/1994, stating that the amount shown as outstanding is not correct and that the bills need to be reconciled. The petitioners deputed their accounts personnel along with the documents for effecting reconciliation but were always turned back by the respondent on some pretext or the other. Thereupon the petitioners issued legal notice on 30/11/1994, under section 434 of the Act, to which a reply was given by the respondent on 20/12/1994, disputing its liability. As this denial of the liability is only an afterthought, the petitioners have filed this petition.

(2.) On 17/02/1995, notice before admission was ordered and the respondent filed a counter stating that the petitioner-companies were appointed for specific works and they were required to submit proper estimates for approval of the respondent-company and after due approval and authorisation they were to execute these specific works. The allegation that all such promotional activities that have been undertaken by the petitioners have been approved and sanctioned by the respondent is denied. The respondent has been requesting the petitioners to correct the bills submitted by them and though they promised to do so, the petitioners were evading the same. It is also stated that as per the records of the respondent-company an amount of Rs. 2,90,318 and Rs. 29,000 is payable to the first and second petitioners, respectively. The respondent is possessed of sufficient and adequate funds to pay the same. But as the petitioners were persisting in making false and inflated claims, the said amount was withheld and the respondent wanted to pay the same in full settlement of the claim after the petitioners reconciled the accounts. The managing director further says in the counter that as early as on 22/10/1994, the petitioners were informed about this and that the alleged approved estimates upon which the outstanding has been claimed have been suppressed and withheld by the petitioners. The action of the petitioners in filing this petition is a gross abuse of the process of the court and a mala fide action to pressurise the respondent-company to pay for advertisements which have not been authorised by the respondent-company, to cause harassment and to tarnish the fair image of the respondent-company, which was started by young entrepreneurs who have invested huge monies and devoted all their time and energy to make the hospital project a success.

(3.) The petitioners have filed a reply admitting the absence of a formal written agreement but asserting that the respondent-company has retained the petitioners as its advertising agents. It states that every bill raised by the petitioners was duly received and acknowledged by the respondent and the dispute sought to be raised now is without substance. The reply further says that the details of the bills which are disputed and the reasons for the same are not disclosed by the respondent either in its counter or in its reply to the legal notice.