RELIANCE INFOCOMM LTD Vs. SHEETAL REFINERIES PVT LTD

JUDGEMENT

(1.) This petition is filed, under Section 433(e), read with sections 434 (1)(a) and 439(1)(b), of the Companies Act, for winding up of the respondent company.

(2.) The petitioner, a public limited company incorporated under the Companies Act, 1956 with its registered office at Jamnagar, Gujarat, is engaged in the business of providing telecommunication and internet services in India. The respondent is a private limited company incorporated under the Companies Act, 1956 with its registered office in Ranga Reddy District of Andhra Pradesh. The authorized, issued and paid up capital of the respondent is Rs.2.00 Crores divided into twenty lakh equity shares of Rs.10/- each. The main objects, for which the respondent was incorporated, is to manufacture, refine and carry on the business of marketing of oils etc. According to the petitioner, the respondent is indebted to it for a sum of Rs.10,97,574/-, that, despite its repeated requests and demands, the respondent had failed and neglected to pay its dues and as such is unable to pay its debts and is, therefore, liable to be wound up. Petitioner would contend that the respondent had approached them, vide letter dated 27.7.2003, to provide 85 Reliance India Mobile (RIM) phone connections under the "Corporate scheme" for its use, that it had filled up the requisite customer application form (CAF) No.5900999683 on 28.6.2003 and that, on the basis of the application, 85 RIM handsets were duly allotted, activated and delivered to the respondent vide delivery challan No.46592 dated 28.6.2003. Petitioner would submit that the respondent had surrendered eight hand sets and had subscribed additional thirty RIM phone connections vide CAF No.2803310741, that these RIM hand-sets were also activated and that the respondent, while retaining two RIM hand-sets had later surrendered 28 RIM hand-sets. Petitioner would submit that, despite having extensively availed its services, the respondent had failed to pay the bills issued for such services. Enclosed to the petition are copies of the bills. Petitioner would submit that Rs.10,97,574/-, with interest at 18% per annum till the date of payment/realization, is due and payable to them by the respondent, that they had issued statutory notice dated 15.12.2004 calling upon the respondent to pay the amounts due within a period of three weeks failing which appropriate legal proceedings would be instituted including winding up, that, by letter dated 23.12.2004, the respondent had sent a reply falsely denying its liability to pay the dues, that the respondent had neglected to pay the amount due, that it is unable/deemed to be unable to pay its debts, that it is plainly insolvent and that it is just, equitable and in the public interest that the respondent be wound up by and under the order of Court.

(3.) In their counter affidavit the respondent would deny the allegations in the petition including that they are indebted to the petitioner for a sum of Rs.10,97,574/- and that, despite repeated requests and demands, they had neglected to pay their dues. Respondents would submit that, while it had availed 85 RIM phone connections under the "Corporate Scheme", it was the representatives of the petitioner who had made lucrative offers to which they had fallen prey and had agreed to take the phones. Respondent would submit that they had submitted the customer application form, that the mobile handsets were activated by the petitioner, that they had surrendered eight of the 85 phones and that from day one they were requesting the petitioner to limit outgoing calls upto Rs.700/-, to bar outgoing calls if the charges exceeded Rs.700/- and to disconnect STD and ISD facility. According to the respondent, despite their representations on several occasions, the petitioner did not take any steps to bar outgoing calls, they were not sending bills for the said phones, that on being questioned they had assured that they would send the bills and disconnect the phones if the charges exceeded Rs.700/-, and that they had failed to act upon such assurances. Respondent would submit that the representatives of the petitioner had approached them with another lucrative offer of RIM phones under the "Monsoon Hungama Scheme" informing that the phones could be sold to customers buying edible oil tins from various outlets of the respondent in the twin cities, that they would pay commission to the respondent on these connections, that negotiations took place and ultimately a Memorandum of Understanding dated 25.3.2003 was executed between the petitioner and the respondent under which it was agreed that the petitioner would also provide 30 handsets for promoting the sales of RIM phones, that these phones would be provided exclusively to those representatives who were engaged in the promotional campaign and that, for these 30 hand-sets, no charges would be levied. While denying that it had retained two of the thirty hand-sets, respondent would contend that these two hand-sets were misplaced by officials of the petitioner, that there was no necessity for them to retain two hand-sets and the very admission that they had surrendered 28 RIM phone connections would itself establish that the thirty RIM connections were given exclusively for the promotional campaign under the "Monsoon Hungama scheme". While denying the allegation that it had neglected to pay the alleged outstanding dues of Rs.10,97,574/-, respondent would submit that the petitioner had failed to send the bills regularly, that a consolidated bunch of bills were sent for the first time in February, 2004 for the period July, 2003 to February, 2004 and that, despite repeated requests, not even a single bill was sent to them. Respondent, while denying that they are liable to pay Rs.10,97,574/- with interest at 18% per annum, would state that they are solvent and financially strong having an annual turnover of Rs.131.00 Crores and a net income of Rs.86,80,000/-, that they are manufacturers of refined oil, that their Memorandum and Articles of Association do not permit either the company or its directors to carry on the business of selling mobile phones on commission basis and that no amount could be paid without the resolution of the Board or the Shareholders of the Company. Respondent would contend that no Memorandum of Understanding could be entered into by a Director of the Company and that any such agreement entered into by the Executive Director, in his independent capacity, would not bind the company as no resolution was passed by the Board or the Shareholders of the Respondent nor was the Executive Director authorized to purchase/use the mobile phones or to enter into an understanding with the petitioner. It is stated that, as on 31.3.2005, the respondent had made profits, after deducting taxes, of Rs.70,78,204/-, that as at present 60 workers are engaged, that the company has never failed to pay either their salaries or the dues of its creditors, that the entire dispute, between the petitioner and the respondent, arose only as a result of mismanagement by officials of the petitioner, that these matters required detailed enquiry and could not be decided in summary proceedings for winding up.