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IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
Express House Keeper (P) Ltd. – Petitioner
Versus
Ensol Power (P) Ltd. – Respondent
CO.PET. 117 of 2016
Decided On : 19-09-2017
LIQUIDATION - MANPOWER SERVICES - [Companies Act, 2013, Section 433 and 434] - The court admitted the petition and appointed the Official Liquidator as the Provisional Liquidator, directing the takeover of assets and records of the respondent-company. The directors were directed to file their statement of affairs, and the respondent-company was restrained from parting with its assets without the court's permission.
Fact of the Case:
The petitioner company provided manpower services to the respondent under an agreement. The respondent failed to make full payments, leading to a dispute over outstanding dues. The petitioner sought liquidation of the respondent-company due to non-payment of debts.
Finding of the Court:
The court found that the respondent had admitted its liability but failed to make full payments as per the agreed schedule. The court also noted the respondent's financial difficulties and lack of cooperation in resolving the dispute.
Issues: The main issue was the non-payment of outstanding dues by the respondent, leading to the petitioner's request for liquidation of the respondent-company.
Ratio Decidendi: The court relied on the respondent's admission of liability and failure to adhere to the agreed payment schedule, as well as the respondent's financial situation, to justify the admission of the petition for liquidation.
Final Decision: The petition for liquidation was admitted, and the Official Liquidator was appointed as the Provisional Liquidator. Various directions were given to take over the assets, records, and accounts of the respondent-company, and the directors were required to file their statement of affairs.
YOGESH KHANNA, J.
1. The petitioner company is engaged in providing man power services on hire. The respondent approached the petitioner and requested it to provide man power for pay roll management. This means on one side the respondent would select and employ the staff for its work and on the other side, the petitioner were to provide ‘salary disbursal’ to the employee by respondent on agreed terms. The written agreement dated 10.10.2013 was executed between the parties. The relevant clauses of the agreement in question read as under:-
“Clause (3) PERIOD OF AGREEMENT.
That this Agreement shall be effective in initially for a period of One year w.e.f. 01.10.2013 unless this agreement is executed for such further period of another one year and on such terms and conditions as may agreed to by the SECOND PARTY thereto.
Clause (5) TERMS OF PAYMENT
That the FIRST PARTY shall pay to the SECOND PARTY as per Annexure C, and the Service & Edu. Tax as applicable in total per month, subject to TDS for rendering the said services. That the FIRST PARTY will make the payments by cheque or Bank transfer within 60 days of submission of Bills. Second Party shall liable to disburse two months wages to the Manpower, but 3rd month salary shall be distributed only after receiving 1st month Bills payment from First Party.
Clause (6) SUBMISSION AND VERIFICATION OF BILLS
(a) That the SECOND PARTY shall submit the bills by the end of the month for the said services, on monthly basis to enable the FIRST PARTY to verify and process the same and the FIRST PARTY will release the payment on proper verification of such bills.
Clause (12) TERMINATION/SUSPENSION
That the SECOND PARTY shall always be entitled to terminate and/or suspend this agreement in whole or part, after giving one month notice similarly the SECOND PARTY shall have one months notice in writing for termination of this Agreement.
Clause (14) JURISDICTION
That this Agreement shall be deemed to have been made and executed at Delhi for all purposes. In the event of any dispute related to the interpretation or right of liabilities arising out of this Agreement, the same shall, at first instance, be amicably settled between both the parties. If any dispute is not settled amicably, the same shall be subject to the jurisdiction of the Courts at Delhi only.”
2. The petitioner rendered services in the year 2013-14 and an amount of Rs.1.75 Crore was due and hence the petitioner asked the respondent to make the payment of its outstanding dues. The respondent rather sent two proposals to the petitioner for clearing its debt. The said proposals are dated 28.07.2014 annexed as annexure G to the petition, read as under:-
“RE: Payment schedule
Dear Sir,
We have gone through your letter and have noted the contents therein. Please note, none of the facts written to you in earlier letters are stories, they are all facts which can be verified. You have written about recovery department etc. and in this connection please be informed that recovery is done in case the company denies to pay but here the case is totally different. Also please note business relations can never be one sided and requires cooperation to face difficult situation which can come to either party. Now we are running through a very tough financial situation due to reasons known to you and shall request you to accommodate and cooperate with us during this period. Your actions like going to our customers, involve your recovery department will effect our repayment capacity adversely. We are giving the payment schedule below which is perhaps the best possible that we can offer at this point of time. You are requested to accept the same as a special case.
(a) July 2014 10 lakhs
(b) August 2014 30 lakhs
(c) Sep 2014 30 1akhs
(d) Oct 2014 30 1akhs
(e) Nov 2014 30 lakhs
(f) Dec 2014 balance amount
Secondly, we are ready for the option discussed with you in our office that we will pass on the total payment that comes to us from customers, after our day to day ex
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