2008 (3) TMI 487 - HC - Companies Law

Winding up - Circumstances in which a company may be wound up - Held that - In view of disputed question arising with regard to settlement of the accounts between the parties, this Court considers that the dispute raised by the opposite party-company with regard to the claim of the petitioner-company is a bona fide one and no order of winding up of the opposite party-company can be passed in such circumstances. The claim of the opposite party-company with regard to the price of the goods such as dual desks and benches supplied by it, against the petitioner-company, if any, can be recovered by the opposite party-company under the common law forum. It is also open to the petitioner-company to approach the common law forum, if it has any dues against the opposite party-company. No merit in this company petition, which is, accordingly, dismissed

Summary

Issues:
1. Winding up petition filed under sections 433, 434, and 439 of the Companies Act, 1956.
2. Dispute over privatization and management change of the company.
3. Allegations of non-payment of dues and counter-claims between the petitioner and the respondent.
4. Pending Misc. Case regarding payment for supplied goods.
5. Bona fide dispute over settlement of accounts and adjustment between the parties.
6. Decision on the merit of the winding-up petition.

Analysis:
1. The petitioner, a government undertaking, filed a winding-up petition against the respondent company under sections 433, 434, and 439 of the Companies Act, 1956, citing non-compliance with terms of privatization and management change directives.
2. The respondent, a privatized company, disputed the non-payment allegations and counter-claimed that the petitioner owed them a significant amount. Various legal proceedings, including a pending Misc. Case for payment of supplied goods, added complexity to the dispute.
3. The court observed a bona fide dispute between the parties regarding dues and adjustments as per their agreement, leading to the conclusion that a winding-up order was not appropriate in the circumstances.
4. Emphasizing the need for resolution through common law forums, the judgment dismissed the winding-up petition, allowing both parties to pursue their claims and disputes through appropriate legal channels.
5. The court decided not to intervene in the pending Misc. Case, considering the comprehensive agreement between the parties and the genuine disagreement over financial matters, leading to the dismissal of the winding-up petition based on lack of merit.

This detailed analysis of the judgment highlights the complex legal issues surrounding the winding-up petition and the underlying disputes between the petitioner and the respondent company, ultimately resulting in the dismissal of the petition by the court.