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TMI Blog2012 (6) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage, since it cannot be classified as an admitted debt, no reason is seen to exercise the discretion vested in this Court to entertain the petition - Petition dismissed. - CO. PETITION NO. 30 OF 2011 - - - Dated:- 17-4-2012 - A.S. BOPANNA, J. Srinivasa Rahavan for the Petitioner. Aravind Kamath for the Respondent. ORDER 1. The petitioner is before this Court in this petition filed under Sections 433(e) and (f) of the Companies Act praying that the respondent company ordered to be wound up so as to realise the amount due according to petitioner from the assets of the company. Though the petitioner contends that he has other claims also against the respondent company, he has restricted his claim in the instant petition for a sum of Rs. 1,12,50,000/- towards annual bonus with 15% interest and for the sum of 700,000 US Dollars ('USD' for short) towards balance of Consultancy fee. The said amount claimed are according to the petitioner admittedly due as it is payable notwithstanding the termination of agreement. In respect of the other claims the petitioner has initiated Arbitration proceedings as per the terms of the agreement. The respondent company has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder clause 12 of the Consultancy Agreement is only a moonshine defence and not a bona fide one. 5. On the other hand, the respondent company contends that the payment' of bonus depends on the circumstance indicated in the Employments. Agreement which not only requires an assessment of the performance but also the other criteria. They contend that even with regard to the Consultancy fee also, the payment was circumscribed by the compliance of the terms of the agreement. Since the petitioner has contravened clause 12 and entered into competing business though it is prohibited therein, he would not be entitled to the amount when the agreement is as terminated on that basis. There is an arbitration clause and the notice itself shows that they should raise a dispute and in any event, a reference is already pending before the Arbitrator. Hence, no case is made out for seeking winding up. 6. The learned counsel for the petitioner while contending that the Arbitration proceedings is initiated with regard to aspects wherein there is a dispute and regarding the claim made herein it cannot be disputed. relied on the decision of the Hon'ble Division Beach of this Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant question whether there is a debt and the company has either neglected or is unable to pay. (3) The same claim is the subject-matter of arbitration which is pending 'adjudication.' Therefore, there is no definiteness about it (4) In view of all these, there is no prima facie dispute as to the debt. (5) The defence raised is a substantial one and not mere moonshine. We find it difficult to appreciate the reasoning of the learned Single Judge when he holds that there are arguable issues and, therefore, the winding up petition has to be admitted. On this aspect the courts below failed to note that the admission of the winding up petition is fraught with serious consequence as far as the appellant is concerned." 7. It is contended that there is reference to pending arbitration in the said decision and in such case, winding up is not the remedy. The thrust of both the above noticed decisions is that, to avoid winding up petition there should exist a bona fide dispute. The learned counsel for the petitioner in that context relied on the decision of the Hon'ble Supreme Court in the case of Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. AIR 1971 SC 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of this Court in Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 (SC), in which this Court held that: 'It is well-settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the Court.' 22. The abovementioned decision was later followed by this Court in Madhusudan Gordhandas v. Madhu Woollen Industries Pvt. Ltd. [1971] 3 SCC 632. The principles laid down in the abovementioned judgment have again been reiterated by this Court in Mediquip Systems (P.) Ltd. v. Proxima Medical Systems (GMBH) [2005] 7 SCC 42. wherein this Court held that the defence raised by the Appellant-company was a substantial one and not mere moonshine and had to be finally adjudicated upon on the merits before the appropriate forum. The abovementioned Judgments were later followed by this Court in Vijaya Industries v. NATL Technologies Ltd. [2009] 3 SCC 527. 23. The princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er herein was also one of the Directors who attended the meeting. Item No. 11 considered was to review the salary and annual Bonus payable to the CEO i.e., the petitioner herein, the decision was unanimous to the effect that there would he no salary increase for 2009 and no bonus for 2008. It is no doubt recorded that the petitioner did not vote due to conflict and this was stressed by the learned counsel for the petitioner in his reply. But, the fact remains that there was certain decision at that period itself which has not been protested by the petitioner in any other manner. Further, admittedly the Employment Agreement was terminated thereafter during September 2009 and Share Purchase Agreement dated 29.12.2009 (Annexure-D) and Consultancy Agreement dated 31.12.2009 (Annexure-E) were entered into between the parties containing the terms regulating the rights and obligations of the parties which did not protect the accrual of the earlier benefits. Therefore, the amount claimed as due under the Employment Agreement cannot be considered as an admitted debt at this stage which would have to be adjudicated in an appropriate proceedings between the parties. 10. The next claim rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he printout at Annexure-F to the objection statement) that the petitioner's establishment with one 'Pelagius Entertainment' have launched development of animated feature "Hot Dogs". Therefore, since the petitioner violated the terms and had also joined hands with a competitor of the respondent company, by the E-mail dated 13.10.2010 (Annexure-F) the respondent company terminated the agreement for violation of clause 12 and as such the amount is not payable as he is disentitled to the same. 12. The decision of the Hon'ble Supreme Court in the case of Niranjan Shankar Golikari v. Century Spg. Mfg. Co. Ltd. AIR 1967 SC 1098 is relied to contend regard the validity of non-compete clause. It is held therein that, the onus is on the party supporting the contract to show that the restraint is reasonably necessary while the onus is on the party attacking the contract, to show that it is injurious to public policy. It is also held therein, the negative covenant that the employee would not during the contract period, engage in trade or business or would not get himself employed by any other master for whom he would perform similar or substantially similar duties is not restraint of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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