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Issues:
- Whether a prayer for referring the matter to an arbitrator can be granted in a petition under specific sections of the Companies Act, 1956, filed for the winding up of a company. Analysis: The judgment delivered by Justice I.S. Tiwana addressed the question of law concerning the permissibility of granting a prayer for arbitration in a petition filed under sections 433, 434, 439, 582, and 583 of the Companies Act, 1956, for the winding up of a company. The case involved a partnership where the respondent-company became a partner and later decided to dissolve the firm. The partnership deed contained a clause stating that any disputes among the partners shall be referred to arbitration. Subsequently, due to the company's failure to meet its obligations, a petition for winding up was filed by certain partners, seeking arbitration as per the partnership deed. The court emphasized that the relief sought under the Companies Act for winding up is distinct from arbitration proceedings. It was clarified that the provisions under sections 433/434 of the Companies Act pertain to the circumstances under which a company can be ordered to be wound up by the court and are not related to the recovery of amounts. The court highlighted that the disputes mentioned in the partnership deed's arbitration clause did not align with the relief sought in the winding-up petition. This interpretation was supported by precedents from various High Courts, including Salaq Ram v. New Suraj Finance and Chit Fund Co. Pvt. Ltd., Maruti Ltd. v. B. G. Shirke and Co P. Ltd., Thakur Paper Mills Ltd., and Hind Mercantile Corporation Pvt. Ltd. No contradictory judgments were presented to challenge this legal standpoint. Consequently, the court dismissed Company Application No. 88 of 1990, which sought arbitration in the context of the winding-up petition, with no order as to costs. The judgment clarified the distinction between the remedies available under the Companies Act for winding up and the recourse to arbitration as per a partnership agreement, establishing that the two legal avenues serve different purposes and cannot be conflated.
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