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TMI Blog1981 (12) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied upon and a document dated May 2, 1980, showing the nature of the partnership, was relied upon. ( c ) Sums of money due to Mrs. Madhu Bansal and two of the partnership firms had not been paid; so the company was unable to pay its debts. Moreover, it was claimed that the capital had been wiped out due to the loss of Rs. 1,20,000 in the first year, ( d ) There were allegations of lack of probity on the part of the respondents, one such allegation being that a flat belonging to the company in Bombay which was bought for Rs. 1,00,000 was sold to Mrs. Santosh Bhandari, mother of Ramesh Bhandari, for Rs. 1,55,000. This was after the agreement of May 2, 1980, and after another suit relating to M/s. Moti Plast Engineering Industry, one of the firms mentioned in the agreement of May 2, 1980. That suit was instituted by Shri R. P. Bhandari for dissolution of the firm. ( e ) There was allegation regarding manipulation of the accounts of the firm which could be examined only after the evidence was recorded. Learned counsel for the appellants contend that these five reasons are not sound. On the first ground, it is submitted that the original winding-up petition was withdrawn and, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and, in such a case, the problem of the flat in Bombay could also be resolved by a suitable order. The counsel for the respondents (petitioners in the winding-up) was willing to adopt such a procedure provided the flat was put back in the company and the agreement to give it to the mother of Ramesh Bhandari was abandoned. But, this was not acceptable to the counsel for the appellants. So, in substance, we have to see whether the winding-up petition can continue as such. It is manifest that the present petition is one for winding-up both on the ground that it is just and equitable and on the ground that the company is unable to pay its debts. As there is an offer to pay the debt as well as to buy out the petitioners in the winding-up at more than the par value, we may consider that this is merely a case which falls under the "just and equitable" clause and under no other clause for the purpose of deciding what to do with the petition. The question we have now to see is whether the court can refuse to proceed with the winding-up petition at this stage. On this assumption, it was urged by the learned counsel for the appellants that the order of the Gujarat High Court in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as provided that the office of Moti Films will be transferred to the name of Shri Ramesh Bhandari. Further, the goodwill (value) of the flat in Bombay and the office in Chandni Chowk, would be paid to the party who does not retain the same. Under this arrangement, Goel and Bansal had to resign from the directorship of Moti Films on the very next day but the film "Bheegi Raat" was to be the concern of Goel and Bansal. Thus, the relationship between the parties was not confined to M/s. Modi Films P. Ltd. but they had entered into some other partnership arrangements which were to come to an end. Reference to this agreement is necessary also to show that the goodwill of the flat in Bombay and the office in Chandni Chowk was to be shared. The fact that there were two partnerships and a private limited company with a few shareholders only showed, in reality, that the transaction could be described as a "partnership arrangement". Therefore, the partnership principle would prima facie be attracted, at least, sufficiently for the purpose of admission of the petition. Alternatively, even if the partnership principle was not attracted, we would have to see whether proceedings under sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absolute and complete. It, therefore, appears that the only possibility which may be left to the petitioners is a winding-up order, provided, of course, they are entitled to the same on any grounds made out by them, which would result in the liquidation of the assets of the company and, therefore, also the flat in Bombay. This could result in the capital investments being realised and also capital accretions; the parties being then equally entitled to all the benefits or losses according to the shareholding in the company. Whether this is actually the correct order to pass will have to be determined at the final hearing of the petition. It cannot be said that the winding-up petition can be dismissed in limine, on the short ground that the management must not be allowed to reap the benefit of transactions impugned on account of lack of probity. Some very fundamental questions are involved in this case. It is good to pose and examine these. The Company Court's jurisdiction has been complicated by the introduction of sections 397 and 398 of the Act. Before these provisions appeared, a shareholder placed in the position of the petitioners in the winding-up petition under conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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