Karnataka High Court
Ms Radhika Nandivada vs Nitesh Indiranagar Retail Private ... on 10 August, 2012
Author: Jawad Rahim
Bench: Jawad Rahim
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH DAY OF AUGUST 2012
BEFORE
THE HON'BLE MR.JUSTICE JAWAD RAHIM
COMPANY PETITION NO. 78/2012
BETWEEN:
MS.RADHIKA NANDIVADA @ MS.RADHIKA MURTHY
PROPRIETOR, M/S RENTAL KEN,
W/O DR.P.S.MURTHY,
HAVING OFFICE AT ST-044, GROUND FLOOR,
CLUB HOUSE BLOCK, NATASHA GOLF
VIEW APARTMENTS INNER RING ROAD,
DOMLUR, AMARJYOTHI LAYOUT,
BANGALORE - 560 071
... PETITIONER
(BY SRI H.N.NARENDRA DEV., ADV., FOR NDS LAW
PARTNERS, ADV.,)
AND:
NITESH INDIRANAGAR RETAIL PRIVATE LIMITED,
A COMPANY REGISTERED UNDER THE COMPANIES
ACT, 1956,
HAVING ITS REGISTERED OFFICE AT NITESH
TIMESQUARE, 7TH FLOOR, NO.8, M.G.ROAD,
BANGALORE - 560 001
REPRESENTED HEREIN BY ITS MANAGING DIRECTOR
MR.NITESH SHETTY
... RESPONDENT
(BY SRI SHASHIKIRAN SHETTY, ADV.,)
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THIS PETITION FILED UNDER SECTION 433 (e) & 434
OF THE COMPANIES ACT, 1956, PRAYING FOR ORDER THE
WINDING UP OF THE RESPONDENT COMPANY THAT IS
NITESH INDIRANAGAR RETAIL PVT LTD., UNDER
COMPANIES ACT, 1956 AND APPOINT AN OFFICIAL
LIQUIDATOR TO LIQUIDATE THE ASSETS OF THE
RESPONDETN AND ETC.,
THIS PETITION COMING ON FOR ADMISSION, THIS
DAY THE COURT MADE THE FOLLOWING:
ORDER
Invoking Section 433(e) of the Companies Act, 1956, petitioner seeks an order to wind up the respondent company, NITESH INDIRANAGAR RETAIL PRIVATE LIMITED.
2. After preliminary hearing, the petition is taken up for admission.
3. Heard learned counsel for the petitioner, Sri H.N.Narendra Dev and learned counsel for the respondent, Mr.Shashikkran Shetty. Perused records. It reveals the following factual matrix:
a) Plaintiff claims to be a realtor engaged in real estate consultancy and allied services in Bangalore. She sought winding up of the respondent company on the 3 assertive contention that during the course of her business, she was engaged by one George Thangaiah to canvass joint development activity on his immovable property. She accepted the assignment from George Thangaiah and addressed a letter to M/s Nitesh Estates Limited, intimating it that suitable land was available for joint development and the proposed project was very lucrative. She claims to have acted on the assignment from the owner of the land-George Thangaiah and mooted the proposal to the respondent which was in real estate joint development business.
According to her, while negotiating such transaction between the owner of the land and the respondent company, she had made it clear that she would be charging them a fee for rendering services and would claim commission/brokerage in accordance with the norms laid by BANGALORE REALTORS ASSOCIATION OF INDIA (hereinafter referred to as BRAI for short). According to her, she was entitled to 2% of the cumulative value that accrues to the share of the parent company. 4
b) it is also her assertive contention that she worked relentlessly to bring about a binding contract between the owner of the land namely George Thangaiah and the respondent company and her efforts resulted in healthy negotiations and ultimately culminated in signing of Joint Development Agreement between those parties. Thus she claims to have become entitled to five crore rupees being her commission on the value of the project estimated at five hundred crore rupees. Such proposal, according to her, was accepted by the respondent company who not only acknowledged her services but agreed to pay her commission at 2% of the value of the project. She has referred to several agreements executed inter alia between the parties and communication sent by her to the respondent.
c) According to her, she is the person who brought about the transaction between the owner of the land- George Thangaiah and the respondent and has worked on it from 15.12.2006 to June 2008. To substantiate that she is entitled to 2% commission on the value of the project 5 estimated at rupees five hundred crores, she has referred to payment of rupees fifty lakhs by the respondent by way of initial payment as part of the commission.
d) Her main grievance is, in February 2011, through paper publication, she learnt that the joint development agreement was executed afresh between George Thangaiah and the respondent company and in terms of the said agreement, parties had proceeded to implement the project, ignoring her and without paying her legitimately due commission. To substantiate she is entitled to such amount, she has reiterated in the petition that basically it was her efforts which had resulted in the owner of the land and the respondent coming together but the respondent, with sinister design, ignored her when the final agreement was executed in February 2011 and are avoiding to make payment of her commission. In this regard she claims to have addressed several reminders including e-mails to the respondent company, and copies of such mails sent in February and March 2011 are produced by her. It is alleged, respondents failed to respond to her demands 6 necessitating legal action. However, she applied restraint to have a healthy relationship and approached the Chairman of BRAI to solve the dispute.
e) The Chairman, BRAI, is said to have favourably responded to her request and prevailed upon the respondent to settle her claim. It is alleged, respondent merely assured settlement of her claim, but gave no positive response, necessitating legal action. In this fact situation having no choice, she issued the statutory notice to the respondent company under the provisions of Section 434 of the Companies Act requiring it to settle her claim within 21 days despite which the respondent failed to comply with her demand. Respondent is said to have sent a belated reply denying her claim through their reply dated 9.12.2011 and a rejoinder was issued on 21.12.2011.
f) In short, her assertion is, she has rendered professional services as realtor to bring about the transaction between owners of the land-George Thangaiah and the respondent and it is at her instance and due to her efforts the respondent was benefited by the joint 7 development agreement. She has evaluated the services rendered by her from 2006 to 2011 at 2% of the cost of the project as stipulated by BRAI. Alleging she is legally entitled to commission at 2% of the cost of the project, she quantified her claim and described it as a 'debt' undischarged by the respondent company.
g) In response to the notice of these proceedings, respondent company entered contest through a detailed counter and appended several documents thereto to deny her claim. Its assertive contention is, at no time petitioner was engaged as an agent by the land owner-George Thangaiah; she had falsely proclaimed to be his agent; in the initial stage the respondent had believed it in good faith. However, during the course of time, they realised the petitioner had not been engaged or assigned any work by the owner of the land to negotiate a joint development project and all that she did was on her own without instructions or directions or authorization by the land owner. In this regard they referred to the correspondence addressed to them by Chitra, wife of George Thangaiah, 8 intimating them that the petitioner is not their representative and she has not been authorized to negotiate in the deal on their behalf.
h) Regarding payment of rupees fifty lakhs, respondents contended such payment was made believing the misrepresentation of the petitioner that she is the agent of the land owner which was later found to be false. As the petitioner had no authority to represent the owners, she is liable to refund the same to them. In other words, while admitting they made payment of rupees fifty lakhs to the petitioner, they described such payment as having been made on the bona fide belief that the petitioner was authorized by the owners to represent them in the transaction which was later found to be a misrepresentation.
i) Respondent has urged several other contentions meeting the allegations in the petition to bring on record that at no time between 2006 and 2011 petitioner acted as the representative of the land owners and the transaction between them and the land owners was not the result of her 9 efforts or any role by her. To expose the petitioner's guilt of misrepresentation, the respondent has averred in the counter that from 2009 itself, she was not in the picture and has stepped in only after the project was published in the newspaper in February 2011.
j) Regarding her alleged communication dated 25.2.2011 referred to in the petition, respondent contends such communication is subsequent to paper publication and has no sanctity at all. It is an attempt on the part of the petitioner to create evidence as if she was laying her claim much earlier. Respondent has further brought out through their counter that the so-called correspondences and e- mails addressed by the petitioner are not to the respondent company namely, NITESH INDIRANAGAR RETAIL PRIVATE LIMITED, but are addressed to NITESH ESTATES PRIVATE LIMITED which is altogether a different company and a different entity. To establish this fact, they have referred to the seals on the copies of correspondence produced by the petitioner; the seals by way of acknowledgement are of NITESH ESTATES PRIVATE LIMITED.
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k) Respondent has also highlighted that Smt.Chitra, wife of George Thangaiah had clearly disowned any authority conferred on the petitioner to act as their agent in any joint development project. The letter addressed by the petitioner in November 2009 to the respondent is produced to show that the petitioner had, as early as in 2009, informed the respondent that the owner of the land-George Thangaiah and his wife-Chitra had ousted her out of the project. That letter is used as material evidence to establish that the petitioner was not in the project and she had tried all her best to gain entry seeking support of the respondent. If what the respondent alleges is correct, then it could be seen from the said letter that from November 2009 itself she was out of the project.
l) On the basis of such defence, the respondent seeks dismissal of the petition.
4. Responding to the grounds urged by the respondent against action under Section 433(e) of the Companies Act, learned counsel for the petitioner has placed reliance on the decision of the Delhi High Court in the case of ITW 11 SIGNODE INDIA LIMITED .vs. BHUSHAN STEEL AND STRIPS (LIMITED) ([2003] 2 Comp.L.J. 269 (Del) and has drawn my attention to the following observations:
'What is extremely important is that no written responde was made by the company in spite of repeated letters received by it from the petitioner in which large sums of money had been demanded. It taints the defense as dishonest and an after-thought. I am also inclined to accept the contention of the learned counsel for the petitioner that the respondent's'letter dated 22.2.2002 has been pre-dated. Apart from a statement in the rejoinder, the petitioner had immediately responded to this letter in terms of its letter dated 8.3.2002 in which it had not only mentioned that the letter had been wrongly dated, but also that it had been received through Registered A.D. on 5th and 6th March 2002. It had also categorically stated that "it is clear from the dates on the envelope that the letter has been written after having received the court notice on 1.3.2002". The sequence of events indicates that the defense has been formulated after the petition was filed, and therefore, does not attract credence.'
5. Undoubtedly the attempt of the learned counsel is to show that several communications addressed by the petitioner demanding payment were not responded to by the respondent company and therefore that conduct itself establishes respondent had no defence against the claim of 12 the petitioner. No doubt learned counsel has laid emphasis on the conduct of the respondent in not responding to the communication addressed by the petitioner, but it is necessary to notice that the respondent does not admit having received such communications. In fact respondent has pointed out that all correspondences referred to by the petitioner are of the year 2011 after the project was published in the newspaper and secondly, it is not served on the respondent, but is served on NITESH ESTATES PRIVATE LIMITED. Therefore on facts the case law would not be applicable.
6. Be that as it may, I have bestowed serious concern to the averments in the petition and the grievance of the petitioner against the stand of the respondent. On facts there is not much dispute as could be seen from the material propositions in the pleadings of the parties. Respondent does not dispute initially petitioner had approached it as the representative of land owner-George Thangaiah, but later it revealed she had no authority to represent the owner. Petitioner herself has accepted this 13 fact in her communication sent to the respondent in the year 2009. Since the petitioner is seeking action under Section 433(e) of the Companies Act to wind up the respondent company, mere assertion without supportive material would not justify such action. The material made available by the petitioner herself would show she has not addressed any letter directly to the respondent company nor has raised any demand with it. The letters produced by her are addressed to certain officers and individuals who are described as directors of the principal company and not the respondent company. It is to be further noticed that the communication of the petitioner has been responded to by one Nitesh who is said to be involved in both the companies, but he was not representing the respondent company to hold the company liable for the settlement made by him regarding the claim of the petitioner.
7. It must further be noticed that the initial invoice is of the year 2008 and subsequently there are no invoices sent by the petitioner till 2011. It is only in 2011 after the project was published in the newspaper some time in 14 February 2011, petitioner has addressed several e-mails. In this fact situation it cannot be said there is sufficient proof or prima facie case establishing existence of 'legal liability or debt' owing to be cleared by the respondent company. The material on record does not support the petitioner's claim that she is entitled to 2% commission on the cost of the project valued at rupees five hundred crores, nor there is any material to show there was any binding agreement between her and the respondent to pay her such commission.
8. The least petitioner could have done is to produce some material showing she was duly authorized by the land owners-George Thangaiah and his wife-Chitra to represent them in the transactions with the respondent. Not only she has failed to produce such material which would have been a clincher to show she had duly represented them in the transaction with the respondent, she has, on her own volition, informed the respondent that the land owners had ousted her from the project. In this view, the contention of the respondent that the transaction of joint development 15 materialized only in the year 2011 without the participation of the petitioner cannot be ignored.
9. Be that as it may, even if there is a claim from the petitioner as the same has been disputed by the respondent, it creates a bona fide dispute for adjudication in appropriate proceedings in the civil court of competent jurisdiction, and till such adjudication, action under Section 433(e) of the Companies At is unwarranted.
10. No case is made out for initiating winding up proceedings against the respondent company. The petition fails and it is accordingly dismissed.
SD/-
JUDGE vgh*