cp52-10.doc 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.52 OF 2010 In the matter of sections 433, 434 and 439 of the Companies Act, 1956 And In the matter of winding up of Deepa Travel Pvt Ltd, having its registered office at 662/37, Kanyakumari, Sir M Vasanji Marg, Andheri (East), Mumbai 400 069. Mumbai International Airport Pvt Ltd .. Petitioner Mr.S.U.Kamdar a/w Ms Pooja Patil i/by Wadia Ghandy & Co for the petitioner. Mr.V.J.Hegde a/w Santosh Shetty for the respondent. CORAM: S.C.DHARMADHIKARI, J. DATE : 3rd MARCH 2011 P.C. . The petitioner is a private limited company incorporated and registered under the Companies Act, 1956. In para 2 of the cp52-10.doc 2 petition it is stated that in the light of the Government of India’s Policy Decision, the petitioner has been awarded contract to operate, manage, maintain, design, develop, modernise, finance and upgrade the Chattrapati Shivaji International Airport. An agreement in that behalf is reached between the petitioner and the Airport Authority of India. It is dated 4th April 2006. It is stated that a lease deed dated 26th April 2006 has been executed between the Airport Authority of India and the petitioner whereunder the Mumbai Airport land, other than carved out assets and existing leases, alongwith buildings, construction or immovable assets, if any, have been leased to the petitioner. 2 The respondent is also a private limited company. It is claimed that the respondent is indebted to the petitioner in the sum of Rs.26,04,336/- together with interest as per particulars of the claim which are marked as Annexure A to the petition. The claim which is at page 20 consists of fees payable by the respondent to the petitioner in respect of licence to provide hotel reservation facility from premises No.1. The second head is fee payable by the cp52-10.doc 3 respondent to the petitioner in respect of the licence to provide car rental facility from premises No.2. The claim No.3 is electricity charges payable in respect of premises No.2. On all this, interest has been claimed as computed therein. 3 The basis of the claim is that pursuant to a tender issued by the Airport Authority of India for providing hotel reservation facility on Mumbai Airport on 8th March 2002, a contract came to be awarded to the respondent to provide hotel reservation facility from the premises admeasuring 5 sq.mtrs each in Terminal I-A and Terminal I-B at the Mumbai Airport for three years. 4 The premises were handed over to the respondent on 4th April 2002. The period for providing the hotel reservation facility expired on 3rd April 2005. Despite expiry of the period, the respondent continued to provide hotel reservation facility from premises No.1. It is stated that in view of the premises having vested with the petitioner, the respondent company began making payments towards invoices directly to the petitioner. However, from cp52-10.doc 4 August 2007 the respondent company failed and neglected to make payments of the invoices on time and have also failed to pay interest payable thereon by reason of the delay in making payment. Further, for the period of 1st December 2007 to 4th January 2008, the respondent did not make any payment under the invoices raised. Therefore, a letter was addressed on 4th January 2008 informing the respondent that licence has been granted to another service provider and since the premises in possession of the respondent were to be used by the new service provider, the respondent shall vacate the same. Instead of removing themselves from premises No.1, the respondent filed a suit in this Court and applied for interim reliefs. By order dated 8th January 2008, the notice of motion for interim relief was dismissed by this Court. 5 On 17th May 2005, a licence agreement was entered into between the Airport Authority of India and the respondent for providing car rental services at Terminal I-B. The premises at that terminal and the car parking area were provided to the respondent and it was a licence valid from 4th August 2004 to 3rd August 2009. cp52-10.doc 5 6 It is stated that in pursuance of the licence at Annexure D by a letter dated 5th April 2006, the respondent was informed by Airport Authority of India that in view of Terminal I-B being closed for renovations, the respondent company was shifted by the Airport Authority of India to a counter admeasuring 51.15 sq.mtrs in Terminal I-A on the terms set out in the letter dated 5th April 2006. 7 The petitioner states that with effect from 3rd May 2006 by virtue of the lease deed, the premises with regard to the car rental facility also vested with the petitioner and, therefore, the respondent began making payment to the petitioner. The licence was terminated on 29th December 2007 by the petitioner but the premises were vacated only on 31st March 2008. 8 It is in such circumstances that the payment towards fees under both facilities is due and payable. There is absolutely no defence to this claim inasmuch as on the own showing of the respondent, it made payment to the petitioner after the lease was cp52-10.doc 6 executed by Airport Authority of India. In such circumstances, the statutory notice dated 4th April 2009 and 28th May 2009 were not complied with. A false reply was received wherein the respondent stated that there was no privity of contract between the petitioner and the respondent and, therefore, it is not liable to pay any sum. On the other hand, a false claim was raised by the respondent against the petitioner. The matter was clarified by the petitioner by its letter dated 7th July 2009. It is in these circumstances and finding that the respondent is not commercially solvent, but has several creditors, that the instant petition for winding up is filed. 9 In the reply affidavit the respondent company has stated that the presumption under section 434 (1)(a) of the Companies Act, 1956 can be raised only if there is a failure and neglect to pay the amount. The sum demanded is not an admitted liability. There is a bonafide dispute in respect thereof. Firstly, there is no contract between the petitioner and the respondent. The petitioner claims to have been vested with some rights under a lease deed dated 26th April 2006 executed between the Airport Authority of India and the cp52-10.doc 7 petitioner. That is a document under which there cannot be liability of the respondent. The respondent has been inducted by the Airport Authority of India and the licence in their favour is is executed by the said entity. In these circumstances, there is no privity of contract between the petitioner and the respondent. The amount that was paid for a limited period by the petitioners is because of the communication from the Airport Authority of India. My attention is invited to the contentions raised in this behalf in the affidavit in reply and it is submitted that the respondent has a bonafide claim for losses and damages and that is substantiated by the fact that the Airport Authority of India had assured the respondent that it would be shifted back to the Terminal I-B. However, despite inauguration of that terminal in September 2007 and the respondent by letter dated 13th September 2007 bringing the said fact to their notice, the petitioner did not allot the car rental agency at Terminal I-B to the respondent but to some third party. In these circumstances, there is correspondence with the petitioner as agent of the Airport Authority of India. My attention is invited to the statements made in para 14 of the affidavit in reply to this effect. Thus, there is a arbitration cp52-10.doc 8 application filed for appointment of arbitrator. The grievances that the respondent raised against the Airport Authority of India and the petitioner have been highlighted in the said application. 10 In the rejoinder affidavit it has been pointed out by the petitioner that there is no substance in the argument that there was privity of contract. It has been pointed out by the petitioner in the rejoinder that the lease deed dated 26th April 2006 grants leasehold rights to the petitioner in respect of the substantial part of the Mumbai Airport land including the premises. In such circumstances and by relying on the clauses in the lease deed and more particularly Chapter V therein that respondent’s defence about lack of privity completely lacks bonafides. 11 Further, there is no highhanded and premature termination of the licence. The respondent has failed in its attempt to get the licence revived in the suit. As far as car rental facility is concerned, all the allegations in para 14 have been denied. In these circumstances, it is stated that the claim of the respondent against cp52-10.doc 9 the petitioner is in the nature of losses and damages which are yet to be quantified. In such circumstances, merely because such a claim is raised, a winding up petition cannot be dismissed. 12 It is on this material that I have heard Mr.Kamdar, learned senior counsel appearing on behalf of the petitioner and Mr.Hegde appearing on behalf of the respondent. With their assistance, I have perused the petition and the annexures thereto so also the affidavits on record. 13 Annexure B to the petition is a letter dated 8th March 2002 on the subject of licence for providing hotel reservation facility in Terminal I-A and Terminal I-B arrival areas at Chatrapati Shivaji International Airport, Mumbai. The respondent’s tender was accepted and the period of three years from the commencement of the licence was stipulated as a period together with the conditions with regard to licence fee, security deposit and electricity charges. This was subject to agreement in the prescribed format being executed between the parties. cp52-10.doc 10 14 In the petition what has been stated with reference to the Annexure B is that the hotel reservation facility at Mumbai Airport came to be awarded. It is stated that the premises were handed over to the respondent on 4th April 2002 and the period expired on 3rd April 2005. However, the respondent continued to provide the hotel reservation facility from premises No.1. It is stated that these premises vested in favour of the petitioner from 3rd May 2006 and, therefore, it decided to insist on payment from the respondent for using the facility. However, the invoices and the receipts for payment are not annexed and it is stated that the petitioner craves leave to furnish and rely upon the same. It is stated that from August 2007, the respondent company failed and neglected to make payment of the invoices on time and have also failed to pay interest thereon by reason of delay in making payment. For the period 1st December 2007 to 4th January 2008, no payment was made under the invoices. 15 As far as this aspect is concerned in the reply affidavit, it cp52-10.doc 11 has been pointed out by the respondent that the contract by the Airport Authority of India was sought to be high-handedly terminated and prematurely. Therefore, that aspect came to be challenged in this Court and subsequently in the Hon’ble Supreme Court. The respondent was permitted by the Supreme Court to continue to operate from the area allotted till fresh bids are called for and same space was allotted to somebody. It is stated that since 3rd May 2006, the petitioner started acting high handedly and made their intention clear of outsting the respondent. They made it impossible for the respondent to continue the operations and harassed them. There were disputes between the petitioner and sister-concern of the respondent. The respondent was unable to generate any business from the space alloted since August 2007 because of strong arm tactics. The matter reached a point where the petitioners did not recommend issuance of PIC passes. In the absence of recommendation, the respondent could not seek security clearance for obtaining the passes and, therefore, could not enter the airport building. All their operations came to an end from November 2007. The calculation at page 45 of the invoices outstanding cp52-10.doc 12 allegedly is disputed by pointing out that until November 2007 the payment has been made. After November 2007 the respondent was denied entry to the licence premises by petitioner deliberately and thus no business could be conducted therefrom. Under the circumstances, it is not permissible for the petitioner to recover the fees. It is pointed out that the claim made for licence from 1st December 2007 to 4th January 2008 is in any way not payable because of the disputes between the parties. As far as service tax is concerned, there is a reference made in para 11 to the proceedings before the Delhi High Court. It is stated that there is also a dispute with regard to the claim in respect of car rental facility. As far as that facility is concerned, the petitioner has made its claim in the petition from paras 8(f) to 8(j). 16 The respondents have also pointed out as to what led them to file the arbitration petition. Here the agreement reached between the petitioners alleged predecessor and the respondent, a copy of which is at page 43 is relied upon by Mr.Hegde. He submits that there is a breach of this agreement by the Airport Authority of cp52-10.doc 13 India which led to the filing of the arbitration application. 17 On the point of privity of contract, my attention is invited to Chapter V of the lease deed. It is stated that clause 5.1 states that on and from the effective date, the rights and obligations associated with the operation and management of the airport would stand transferred to the JVC. The JVC stands for Joint Venture Company. This JVC consists of some entities whose details are not disclosed either in the petition or in the rejoinder affidavit. It is the JVC who shall be solely responsible and liable for performance of all Aeronautical Services, essential services and all other activities and services as presently undertaken at airport. The JVC shall perform all existing contracts and agreements between Airport Authority of India or any relevant authority and any third party as relatable to the Airport from the effective date as if JVC was an original party to such contracts and agreements instead of Airport Authority of India and towards this end shall perform all responsibilities, liabilities and obligations of Airport Authority of India at JVC’s risk and cost including payment obligations to counter parties. cp52-10.doc 14 18 As far as clause 5.2 is concerned, that relates to transition phase. Prima facie, I am not in agreement with Mr.Kamdar that chapter V of the Mumbai International Airport Private Limited Operation, Management and Development Agreement by itself would demonstrate that the petitioner steps into shoes of Airport Authority of India as lessee and gets all rights. By relying only on this chapter and clause 5.1 this aspect is not prima facie substantiated. 19 It is then argued that the JVC stands for the petitioner. Reliance is placed on the main lease deed executed between the petitioner and Airport Authority of India. 20 It is also stated that the lease deed dated 26th April 2006 would show that the Airport Authority of India granted petitioner leasehold rights in respect of most of the airport land including the premises which were awarded to the respondent for providing hotel reservation facility and car rental facility. At the same time, in para cp52-10.doc 15 5 of the rejoinder it is stated that the respondent company has by conduct and even otherwise recognised the petitioner’s right in the said premises. This could hardly be said to be a satisfactory answer to the respondent’s defence on lack of privity. The petitioner must point out and to the prima facie satisfaction of this Court, if it seeks winding up of respondent-company, that it has a right to seek such winding up. It is not disputed that the agreement which formed the subject matter of the dispute is between the Airport Authority of India and the respondent. The petition itself pleads that the Airport Authority of India awarded a contract to the respondent to provide hotel reservation facility. The petition itself pleads that the agreement dated 17th May 2005 is a licence agreement between the Airport Authority of India and the respondent. The petition itself refers to the letter dated 5th April 2006 addressed by the Airport Authority of India. Therefore, if Airport Authority of India has given the premises on licence and that the licence was to expire upon breaches provided therein, then, something ought to have been pointed out from the licence itself or from the documents relied upon to show that the premises and all rights in the same vest in the cp52-10.doc 16 petitioner and that it is a successor in interest of the Airport Authority of India. The claim that it is a successor in interest should have been specific and there was no occasion then to plead that the respondent has by conduct and even otherwise recognised the petitioner’s right in the premises. It is in such circumstances that I am unable to discard the argument of Mr.Hegde that there was a novation of licence and contract contemplated even by clause 5.2 and that having not been done, there is no privity. To my mind, it is no answer to say that by conduct the petitioners right has been recognised by the respondent and, therefore, novation of licence was not necessary. 21 In such circumstances and assuming that atleast qua a part of the liability, namely, with regard to the car rental facility, reliance is placed by the respondent on the agreement reached between Airport Authority of India with regard to and shifting it back to Terminal I-B so also breach thereof being complained, I am of the view that there is a bonafide defence raised to the claim of the petitioner. That claim has been substantiated by the respondent and cp52-10.doc 17 the arbitral proceedings are sought to be commenced in respect thereof. There is a breach of the contract which is alleged against the Airport Authority of India and even against the petitioner. In such circumstances, it cannot be said that the respondent-company has failed and neglected to pay the sum claimed in the statutory notice. The respondent has also pointed out that some of the statements made in the present petition and the pleadings in the earlier suit are not on par. There is, therefore, a dispute between the parties which must be adjudicated in accordance with law. It is no answer to say that the claim of the respondent being in the nature of damages and losses and that being not proved, there is no substantial and bonafide dispute raised. I have pointed out as to how the defence can be said to be bonafide. 22 As a result of the above discussion, this company petition fails and it is accordingly dismissed. There will be no order as to costs. (S.C.DHARMADHIKARI, J)