1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. COMPANY PETITION NO.358 OF 2009 M/s.Ucil Synchem Pvt. Ltd. ...Petitioner. Versus M/s.Talab Farms Pvt. Ltd. ...Respondent. ....... Mr.S. Shetye with Mr. N.S. Fadia for the Petitioner. Mr.Hitesh Jain with Ms.Pooja Tidke and Ms.Amna Usman i/b. ALMT Legal for the Respondent. ...... CORAM : DR. D.Y. CHANDRACHUD, J. November 19, 2009. P.C.: The claim in the petition which forms the basis of the Company Petition for winding up is founded on a letter dated 14th June 2006, addressed by the Petitioner to the Company and which was confirmed in token of acceptance. Under a mandate that was issued by the Company to the Petitioner, the services of the Petitioner came to be engaged for identifying and sourcing buyers for an integrated township project at Bhivari, Taluka Purandar, District Pune. The tenor of the mandate was for a period of ninety days and was renewable by mutual agreement. The mandate to the Petitioner did not spell out what the brokerage or commission, if any, would be. A 2 Memorandum of Understanding was entered into on 31st May 2006 between the Company and the Nowrosjee Wadia & Sons Ltd. Thereafter, on 14th June 2006, the Petitioner addressed the following letter to the Company : “This refers to your “Mandate” given to us on 22/3/2006. Accordingly, we have put through the deal of your land at Village Bhgivari, Pune near Kondwa, approx: 186 acres for a Joint Venture development by yourselves with Nowrosjee Wadia & Sons Pvt. Ltd., Mumbai as evidenced by the signing of the MOU dated 31/5/2006. We further request you to reconfirm that as agreed and discussed by and between ourselves, the above subjected amount of Rs.1.50 crores, inclusive of service tax and subject to statutory deductions of TDS will immediately be paid to us upon the unlocking of the Final escrow account created by M/s.Nowrosjee Wadia & Sons Pvt.Ltd. in faovur of Talab Farms Pvt. Ltd. under the MOU signed between yourselves dt. 31/5/2006. M/s.Talab Farms Pvt. Ltd. will have to keep us informed when they request the escrow agent created under the MOU dt. 31/5/2006 for the withdrawal of the amounts in the escrow and simultaneously make out payment upon receipt of the payments released by the escrow agent in your favour. Kindly sign and stamp a copy of this communication in receipt and confirmation of your acceptance of this letter and oblige.” 3 The Company through its Chairman, confirmied its acceptance at the foot of the letter. The letter as it stands, provides that an amount of Rs. 1.50 crores would be paid to the Petitioner upon “unlocking of the Final Escrow Account” created by M/s.Nowrosjee Wadia & Sons Pvt. Ltd. in favour of Company under the Memorandum of Understanding signed on 31st May 2006. The Company was to keep the Petitioner informed upon requesting the Escrow Agent created under the Memorandum of Understanding for the withdrawal of the amount held in escrow and to simultaneously make payment to the Petitioner upon receipt of the payments released by the Escrow Agent in favour of the Company. According to the Petitioner, the Company received an amount of Rs. 9.54 crores from Nowrosjee Wadia & Sons Pvt. Ltd. In paragraph 10 of the reply that statement has been denied. According to the Company, it received an amount of Rs. 5.53 crores representing (i) A sum of Rs. 1.04 crores as advance ground rent; (ii) A sum of Rs. 1 crore towards the costs of regulatory approvals; (iii) A sum of Rs.2 4 crores towards construction work executed by the Company; and (iv) A sum of Rs. 1.49 crores towards running bills. A copy of the Memorandum of Understanding between the Company and Nowrosjee Wadia & Sons Pvt. Ltd., is annexed to the Company Petition. The agreement contemplates several payments being made to the Company. Under Clause (4), an amount of Rs. 1.25 crores was to be paid towards the ground rent; under Clause (5), an amount of Rs.6 crores was to be deposited with the escrow agents; under Clause (6), an amount of Rs. 1 crore was to be paid towards the regulatory approvals; under Clause (7), an amount of Rs. 2 crores was to be deposited in an escrow account and under Clause (14), all expenses of development were to be borne by Nowrosjee Wadia & Sons Pvt.Ltd. According to the Company, the payment which was due under Clause (5) of Rs.6 crores which was to be deposited in an escrow account by Nowrosjee Wadia & Sons Ltd. was never deposited. The defence to the claim raises a triable issue and, it cannot be said that there is a debt due and payable. The agreement between 5 the Petitioner and the Company links the payment of an amount of Rs.1.50 crores to the Petitioner with the unlocking of the final escrow account that was to be created in favour of the Company by Nowrosjee Wadia & Sons Pvt. Ltd. The letter dated 14th June 2006, further provides that this payment would be made to the Pettioner simultaneously upon receipt of the payment released by the Escrow Agent in favour of the Company. The defence is that as a matter of fact, the escrow account was never created and has not been unlocked.In fact, in the Rejoinder that has been filed by the Petitioner, it would appear that eventually disputes have taken place between the Company and Navrozjee Wadia & Sons Pvt. Ltd. Which has led to the institution of an application under Section 9 of the Arbitration and Conciliation Act, 1996. Prima facie, the agreement between the parties does not postulate that the payment of Rs. 1.50 crores to the Petitioner was to be made upon the receipt of any amount whatsoever by the Company from Nowrosjee Wadia & Sons Pvt. Ltd. The payment was specifically associated with the release of the Final Escrow Account and was to be made upon the unlocking of the final 6 escrow account which has not been done. The Court is informed that the Petitioner has also filed a suit for the recovery of its alleged dues. The Petitioner would have to be relegated to that remedy. It is necessary to observe that the observations contained in this order shall not come in the way of the trial of the suit since they are confined only to the disposal of the winding up petition. The Company Petition is dismissed. .....