9911796707
TMI Blog1998 (2) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... is unable to pay its debts. 2. The petitioner's case is that the respondent-company entered into an agreement dated 2.4.1991 with petitioner for supply of refined edible oils manufactured by the respondent to the petitioner. Pursuant to the provisions of the said agreement, the petitioner advanced money from time to time to the respondent for financing the entire purchase of crude oil, packing materials as well as refining and delivery charges. As on 20.6.1992, there was a credit balance of ₹ 1,15,92,052.86 paise in favour of the petitioner. Dispute has arisen between the parties over material balancing and account reconciliation and the respondent-company having failed to make the payment, the petitioner filed the winding up p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s put [in] by the respondent-company and a counter affidavit was also filed in which though not denying categorically that the petitioner had defaulted in payment of the instalments, the respondent relied upon clause 5 of the agreement, dated 26.7.95 and asserted that the remedy of the petitioner lay by approaching the civil courts and not by filing the present winding-up petition which was barred as per the agreement between the parties. A rejoinder affidavit has been filed on behalf of the petitioner denying the allegations made in the counter affidavit. 4. I have heard Sri A.N. Haksar, learned senior counsel appearing for the petitioner assisted by Sri Yashwant Varma and Sri Pradeep Kumar, and Sri Amit Bhatt, learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner. The respondent-company had also agreed to pay a sum of ₹ 65 lakhs in 48 monthly instalments from the date of the said agreement and the amount and the dates were specified in the Annexure annexed to the said agreement. The respondent-company had to make an initial down payment of ₹ 1 lakh and the monthly instalments had to be paid before 5th of each month. The agreement also directed that at any point of time if four monthly instalments were not paid within the time specified and the four instalments were outstanding cumulatively, then the entire amount would immediately become due and payable and shall be paid forthwith to the petitioner. Clause 5 of the agreement on which the respondent has placed strong reliance is quote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n contended that the petitioner is asserting that the respondent had agreed to pay the entire amount of ₹ 65 lakhs in 48 monthly instalments out of which only a sum of ₹ 5 lakhs has been paid and all the instalments till date have now fallen in default which admittedly the respondent-company has not paid. Consequently, there is no dispute which requires the filing of any suit in the civil court. In support of his submission the learned counsel has invited the attention of the court in paragraphs 19 and 24 in the case of Gujarat State Cooperative Land Development Bank Limited vs P.R. Mankad and another, AIR 1979 SC 1203. That apart, the learned counsel has contended that a creditor cannot be compelled to the ordinary civil remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion statutorily conferred be obliterated by an agreement between the parties. An arbitration clause in itself is not a litmus test for bringing the winding up proceedings to a halt. Mere arbitration agreement by itself is not sufficient to stay the winding up proceedings. 8. Having considered the respective submissions of the learned counsel for the parties, prima facie, I find some force in the submission made by the learned counsel for the petitioner. It will be noticed that the respondent-company had agreed to pay the amount of ₹ 65 lakhs in 48 monthly instalments. Admittedly, after paying ₹ 5 lakhs they had stopped payment with effect from 2.3.1996 and the rest of the instalments upto date have fallen due. The responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en assuming that the petitioner had a right to file a civil suit for recovery of the dues and also a right to file a winding up petition against the company and they have chosen the latter, it could not be said that the petitioner had acted mala fide to put improper pressure on the company. As held by Chief Justice Chagla in the case of Bachha Raj Factories Limited v Hirjee Mills Limited, (1955) 25 Comp Cas 227 (Bom) that in the ultimate analysis, the court passes the winding up order in the interest of the company, in the interest of the shareholders and in the interest of the creditors. However, at the admission stage, the court is not required to express a concluded opinion and all that is required is to ascertain whether it appears to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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