9911796707
TMI Blog1999 (10) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... a Hitachi Excavator, Model UM 0832LC Hydraulic Back Hoe with 0.91 cu. mtr. Back Hoe Bucket had been let on hire to the company and the company agreed to take on hire the aforesaid machine complete with all accessories on the terms and conditions mentioned in the winding-up application, including those relating to the payment of an amount of Rs. 6,19,418.92 as initial payment by way of hire charges. An agreement is stated to have been executed on 1-2-1990 between the parties. It is the case of the appellant that the company paid Rs. 6,19,418.92 at the time of execution of the aforesaid agreement whereupon the possession of the machine/vehicle was made over by and on behalf of the appellants to the respondent-company. It is also alleged that first two-sixth monthly hires and/or instalments charges were paid by the respondent-company, but thereafter the respondent-company neglected to pay to the appellant hire charges. Details of the payments and the non-payments have been given in the winding-up application. The following reliefs were claimed by the appellant in the winding-up application : "( a )The said company being Subrata Sasmal Co. (P.) Ltd. be wound-up by this Hon ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g-up proceedings assume a representative character. 5. In the latest judgment of the Supreme Court in the case of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [1999] 34 CLA 246, their Lordships have held as under : "6. The claim in a petition for winding-up is not for money. The petition filed under the Companies Act, 1956 would be to the effect, in a matter like this, that the company has become commercially insolvent and, therefore, should be wound-up. The power to order winding up of a company is contained under the Companies Act and is conferred on the court. An Arbitrator, notwithstanding any agreement between the parties, would have no jurisdiction to order winding-up of a company. The matter which is pending before the High Court in which the application was filed by the petitioner herein was relating to winding-up of the company. That could obviously not be referred to the arbitration and, therefore, the High Court, in our opinion, was right in rejecting the application." (p. 248) 6. In the case of Pure Drinks (New Delhi) Ltd. (No. 1) v. Goetze India Ltd. [1994] 13 CLA (Snr.) 56, a Division Bench of Punjab and Haryana High Court, while dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. Mere arbitration clause itself is no justification for the stay of proceedings nor is it a complete defence in itself. The provisions of the company law being special provisions will override the general provisions. Since the arbitrator cannot grant a relief in a winding-up petition, it would be a futile exercise to try the lis piecemeal." 8. Earlier in the judgment while dealing with various provisions of the Companies Act, the Division Bench held as under : "From a skeletal scheme of the Act, summarised and referred to in brevity above and what has been expressly provided, the brief design from short exordium appears to be that winding-up of a company is provided by specific and precise legislation. It is a case of insolvency of a corporate existence and I can safely venture to state that it can be equated with the bankruptcy of a person particularly when the company is sought to be wound-up through the agency of the court for its inability to pay its debts or where it is found to be just and equitable that the company should be wound-up. At this stage, it may be noticed that section 434 defines the deeming provisions when the company would be deemed to be unable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of S.N. Enterprises (P.) Ltd., In re [1997] 26 CLA 365 (Cal.) Shymal Kumar Sen, J., held as under : "31. In my view, the proceeding for winding-up of company comes within special jurisdiction which has been conferred only on the High Court. In fact the proceedings under the provisions of sections 433, 434 read with section 439 of the Companies Act, 1956 are completely of a different jurisdiction than the one regarding which remedy can be sought by way of arbitration under the clause in question. It is fallacious to conceive that the proceedings for winding-up under the provisions of sections 433, 434 and 439 of the Companies Act, are by way of recovery of amount touching the various provisions of the scheme. Under the provisions of section 433 of the Companies Act, the Legislature codified the circumstances/grounds on which a company may be ordered to be wound-up by the court. Section 434 provides as to under what circumstances a company may be deemed to be unable to pay its debts, whereas section 439 makes provision for an application for winding up." (p. 371) 10. While dealing with the specific question relating to the effect of section 34 of the Arbitration Act, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e letters placed before me. It was not a case of lack of details in support of the dispute. But I am inclined to think that no dispute was ever raised by the company prior to the one which was raised in the affidavit in opposition. I may, however, conclude this point by stating that if the petitioner would not have failed on the first ground I am not quite sure as to whether he would have failed on the second ground of lack of statement of relevant facts and sufficient materials in his application for winding-up, although as I have indicated above, in all probability on this ground alone he should not have failed." (p. 294) 12. We respectfully agree with the view taken by Shymal Kumar Sen, J. in S.N. Enterprises (P.) Ltd. s case ( supra ) and hold that the learned Single Judge was not correct in his decision that an application under section 34 of the Arbitration Act by itself would be a reason and cause for stay of an application for winding-up of a company under sections 433, 434 and 439 of the Companies Act. If in answer to such an application filed by a petitioning creditor, the respondent-company comes forth and raises a bona fide dispute and brings to the notice of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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