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IN THE HIGH COURT OF BOMBAY
Clicquot Asia Limited
Versus
Red Robin International Ltd
Decided on : February 24, 2005
Companies Act - Winding up petition - Sections 433, 434 - Summary
Fact of the Case:
The petitioner, a foreign company, supplied wines and champagne to the respondent, an Indian company, under an agreement. The respondent failed to make payment for the supplied goods, leading the petitioner to file a winding up petition under sections 433 and 434 of the Companies Act, 1956.
Finding of the Court:
The court found that the respondent had not paid for the supplied goods, establishing a substantial liability. The court rejected the respondent's contention of entitlement to set off against a claim of compensation, as the claim was vague and unsubstantiated.
Issues: The court addressed the validity of the statutory notice and the necessity of re-endorsement on the bill of exchange for maintaining the petition.
Ratio Decidendi: The court held that the statutory notice was valid and rejected the respondent's argument against it. The court also ruled that re-endorsement was not necessary for maintaining the petition, as the petitioner was entitled to sue on the original cause of action and the dishonoured bill of exchange.
Final Decision: The court ordered the respondent to deposit the outstanding amount, failing which the petition would stand admitted and be advertised. If the amount was deposited and a suit filed, the deposited amount would be transferred to the credit of the suit.
KAMDAR S. U. , J.
( 1 ) THE present company petition is filed under sections 433 and 434 of the Companies Act, 1956. The claim of the petitioner is in the sum of 220,273 Euros arising out of supply of wines and champagne to the respondent company.
( 2 ) SOME of the material facts of the present case are as under:-
( 3 ) THE petitioner is a foreign company and is inter alia engaged in manufacturing of different kinds of wine and champagne. The respondent is an Indian company and is inter alia carrying on business in distribution and sale of wine and champagne under an agreement dated 6-10-2001 entered into by and between R. R. International which is a division of the respondent company and the petitioner. It was agreed that M/s. R. R. International shall be appointed as the exclusive distributor for distribution of Veuve Clicquot ponsardin and Krug Champagne and other wines from the Clicquot Asia portfolio on various terms and conditions as set out in the said agreement.
( 4 ) THE said arrangement was arrived at in 2001 and pursuant thereto the petitioner supplied wine from time to time including through Clicquot hongkong Limited who was wholly owned subsidiary of the petitioner herein. Invoices were raised by the said company and the respondent made payments from time to time. It is the case of the petitioner that in respect of one such invoices bearing No. OA/12-20/01b dated 20-12-2001 for the sum of Rs. 236,751. 33 Euros raised by the said Cliquot Hong Kong Limited, the respondent company failed to make payment though the goods were duly supplied. It is the case of the petitioner that in respect of the said supply, the necessary invoice was raised and even bill of exchange was accepted by the respondent company being dated 2-1-2002. The said bill of exchange was drawn by Clicquot hongkong Limited for the sum of 236,751. 33 Euros. The said goods were duly supply and duly received by the respondent company. On 3-6-2002, the petitioner made a request to the respondent company to make payment of the amount which was according to the petitioner due and payable in the sum of 347,560 Euros. On 29-11-2002 a debit note was issued and the balance amount claimed was 220,273 Euros against the said invoice. Thus, according to the petitioner, the ultimate amount due and outstanding was 220,273 Euros. In view of the fact that the company did not make payment, the petitioner issued a notice under sections 433 and 434 of the Companies Act, 1956 calling upon the respondent company to make payment of the aforesaid amount. This notice dated 10-3-2003 was issued for and on behalf of M/s. Clicquot Asia limited and Clicquot Hong Kong Limited both and was addressed to the respondent company. In the said notice it has been pointed out that under the terms and conditions of the agreement, the wine was supplied to them from time to time but in respect of one of the invoices the payment is not received. However, the company did not reply to the said statutory notice.
( 5 ) THERE are certain additional facts which are relevant for the purpose of the present petition which are briefly enumerated as under: -
( 6 ) THE said exclusive distributorship agreement dated 6-10-2001 was for a period upto 31 -12-2003 and the same has expired by efflux of time. However, it is the case of the respondent company that it was orally agreed by and between the petitioner and the respondent company that the association of the respondent will continue on long terms basis and keeping the said fact in mind, the said agreement shall be renewed. However, it is further case of the respondent company that suddenly the petitioner stopped supply of the said goods to the respondent and started effecting supply of the said product to other persons in India in direct breach and violation of the said exclusive distributorship agreement. According to the respondent company, the said act on the part of the petitioner has resulted in serious loss and that includes the loss of reputa
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