TMI Blog1995 (11) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... months unless mutually agreed upon, from the date of allotment, to buy-back the said shares at a price which was to be the face value of the shares and at a return calculated at the face value of the shares as detailed in the agreement for every financial year and upon shares being offered, the company was to promptly purchase the said shares upon terms and conditions detailed in the agreement and in the event of not accepting either wholly or in part the offer for sale of shares within a period of 90 days from the receipt of the offer, the intending subscriber, i.e., the petitioner was free to sell such shares offered to the company and not accepted by it to any other person. In the event of the petitioner not being able to realise from the sale of the said shares the price as fixed under the agreement, the difference in the price realised by sale of the shares and the price determined in terms of the agreement was to be made good by the company. Ten lakh shares of I.A.L. were allotted to the petitioner on 16-4-1990. The petitioner in terms of the agreement offered the shares to the company within the time envisaged by the agreement. The company failed and neglected to make pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares to the promoters within the stipulated time nor has the petitioner alleged that it sold the shares to any other person in accordance with the terms of the agreement. The petitioner had filed this petition without complying with the terms of the agreement and the same was liable to be dismissed as such being wholly misconceived. The non-joinder of necessary parties is the other objection on account of which a prayer for dismissal of the petition has been made. Still further it is averred by way of another preliminary objection that the disputes arising under the agreement are referable to arbitration and the petition has been filed without having recourse to the arbitration clause. On the merits, it is submitted that there was no express undertaking that the company was to buy-back the said shares. The shares were only to be offered to the promoters and in case they did not buy the shares, the petitioner was free to sell these shares to any other person and in fact the shares were never offered to the promoters for buying-back in terms of the agreement and in the event of the petitioner getting a lower price by sale of shares, the promoters were to make good the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice of winding up under the Act. In the above premises, the learned counsel for the petitioner vehemently submitted that having regard to the correspondence exchanged between the parties and placed on the record, it is clearly proved that the petitioner offered to the company to purchase the shares and it agreed to purchase the same but offered to pay the amount after some time and ultimately did not make the payment and thus, it is unable to pay the admitted debts and is, therefore, liable to be wound up under the provisions of the Act. 6. The learned counsel for the petitioner placing reliance on Madhusudan Gordhandas Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125, submitted that the principles on which the court acts are, firstly whether the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and; thirdly, the company adduces prima facie proof of the facts on which the defence depends. Support for this view was also sought from a decision of this Court in Bharadwaj Associates v. Pure Drinks (New Delhi) Ltd. [C.P. No. 35 of 1985, dated 1-12-1993]. On the other hand, M.L. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act. The learned counsel appearing on behalf of the company submitted that the company was a going concern and in the facts and circumstances of this case, may not be ordered to be wound up. The learned counsel placed reliance on Pradeshiya Industrial Investment Corpn. of Uttar Pradesh v. North India Petro Chemical Ltd. [1994] 79 Comp. Cas. 835 ; to contend that the claim made in the petition was itself doubtful which requires adjudication and, therefore, is not a debt as contemplated by the provisions of sections 433 and 434. The learned counsel further contended that the petition was not maintainable, the defence raised by the company being substantial, the debt being disputed and the provisions of the agreement on which the debt is claimed having not been strictly followed inasmuch as the petitioner did not sell the shares before filing the present petition and that the company was running in profit. Reference was also made to Parmetex Inc. Hackettstown v. Punjab Concast Steels Ltd. to contend that when the company is a going concern, the court may go slow in ordering its advertisement and the petitioner in such situation may be relegated to the remed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell the shares in the open market and claim the loss suffered by it by sale of shares in the open market after taking into consideration the amount realised and the amount that would have been worked out under the agreement. Admittedly, the petitioner has not sold the shares till today. An impression is left that the petitioner is forcing the company to purchase the shares and to pay to it the amount as may be worked out under the agreement or some price that may be acceptable to the parties. It is not obligatory under the agreement for the company to purchase the shares and to pay the price thereof. It was an option with it to purchase or not to purchase the same. The petitioner cannot force the company to purchase the shares. The shares, as already noticed, have not been offered to one of the promoters, i.e., R.K. Garg even till today what to talk of within the period envisaged by the tripartite agreement. 8. Article 10 of the agreement, annexure P-1 provides for settlement of dispute. It provides that any question arising under the agreement shall be referred to the arbitration of three arbitrators. The company and the promoters were to provide one arbitrator and the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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