At no point of time did JIL terminate the LOE. It also did not write to E&Y in response to the invoices received by it after 10-4-2010 protesting that the success fee claimed was either not payable or that the rate was not 1.15 per cent. Also JIL never wrote to E&Y stating that it does not require their services any longer. Even in reply to the legal notice issued by E&Y, JIL did not take the defences it now seeks to raise for the first time in these proceedings.
Clause 3.3.2 of the LOE makes it clear that success fee ‘will not be prejudiced in the event that a transaction, once completed, has evolved away from that originally envisaged in this letter’. It clearly states that E&Y will still be entitled to the success fee relation to any transaction on which E&Y advises. The words ‘structure and nature of the transaction’ might refer to the debt/equity financing but the explanation offered by JIL that this was only for finances ‘arranged’ for by E&Y or not those for which it provided ‘assistance’ is not borne out from the LOE. Among the services offered by E&Y providing ‘assistance’ in obtaining finance for the transactions of acquisitions of rigs is definitely included.
The plea that JIL is commercially solvent and ought not to be wound up is answered by the Supreme Court in IBL Health (India) (P.) Ltd. v. Info-Drive Systems SDN. BHD . It was held that if there is no dispute as to the company’s liability, the solvency of the company might not constitute a standalone ground for setting aside a notice under section 434(1)(a). If the company refuses to pay on no genuine and substantial grounds, it should not be able to avoid the statutory demand.
Accordingly, the petitioner has made out a case for admission of the petition.