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2014 (3) TMI 206 - HC - Companies LawWinding up of Company - Inability to pay its debts - Whether the debt is bona fide disputed - Held that:- The first part of the Clause 5.2 of the purchase order does make reference to payment within 3 to 5 working days from the company receiving payment from HAL on back to back basis. However, the second part provides that the Respondent company would do the best possible to release the payment within 45 days from the date of receipt of certified bills from the Appellant. The use of the word "however" makes it clear that though the Respondent company was bound to effect the payments within 3 to 5 working days upon receipt of payments from HAL, nevertheless if such payments were not forthcoming from HAL, the Respondent company would do the best possible to release payments within 45 days from the date of receipt of certified bills from the Appellant. The payments of amounts to the Appellant was therefore not dependant upon the Respondent company receiving payments from HAL. In fact, there was no privity of contract between the Appellant and HAL. Such defence was never raised by the Respondent company either at the stage of executing the undertaking dated 29 July 2009 or at the stage of acknowledging the amount due in pursuance of the balance confirmation letters dated 25 March 2010 and 7 March 2011 - a claim in a petition for winding up is not for money. The petition filed under the Companies Act in a matter like this, is to the effect, 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 - Decided in favour of applicant.
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