2003 (11) TMI 338 - HC - Companies Law

Summary

Issues:
Winding up petition based on a notice under section 433 of the Companies Act for dues as per Clauses 5, 6, and 7 of the Memorandum of Understanding dated 18th February, 1994. Dispute regarding liability of Rs. 50,000 per month. Maintainability of winding up petition against only one of the three companies mentioned in clause 7.

Analysis:
The winding up petition is based on a notice under section 433 of the Companies Act, claiming dues as per Clauses 5, 6, and 7 of the Memorandum of Understanding dated 18th February, 1994. The claim specifically relies on the liability of Rs. 50,000 per month as per clause 7 of the said MoU. The petitioner argues that the respondent's undisputed liability of Rs. 50,000 per month, as outlined in clause 7, remains unpaid.

The respondent, however, raised a preliminary objection stating that the liability mentioned in clauses 5 and 7 pertains to three separate companies - Healthy Holdings Private Limited, Govind Impex Private Limited, and Good Faith Construction Private Limited. The respondent contends that the liability is not joint and several, and therefore, proceeding with the winding up petition against only one company is not maintainable. The respondent further argues that there is no direct admission of liability, and the MoU does not fully reflect the transactions between the parties.

The court, after considering the arguments, found that the winding up petition is not maintainable due to several reasons. Firstly, there is no direct admission of liability by the respondent. Secondly, the MoU does not comprehensively detail the transactions between the parties. Thirdly, the lack of specific information regarding the agricultural assets and implements generating the monthly income of Rs. 50,000 raises questions that cannot be resolved under the winding up jurisdiction. The court also agreed with the respondent's argument that the petition cannot proceed against only one of the three companies mentioned in clause 7 without clarity on the individual liabilities of each company. Consequently, the court dismissed the winding up petition as it was based on disputed questions of fact and lacked clarity on the joint or several liabilities of the companies involved.