TMI Blog1997 (12) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... , are these. The petitioner-company is carrying on the business of manufacture and sale of corrugated fibre board and boxes for the packing of horticultural produce. On the basis of supply orders placed from time to time during the year 1989-90, the petitioner-company supplied 4,15,066 cartons of corrugated fibre board valued at Rs. 69,50,350.50 to the respondent- company. The supply so made included the supply of 1806 cartons as samples, valued at Rs. 30,250.50, the agreed value per carton being Rs. 16.75. A sum of Rs. 62,30,312.75 was paid by the respondent-company as part payment towards the cost of cartons supplied. In addition another sum of Rs. 1,97,000 was paid by the respondent-company towards freight charges. 3. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of Rs. 1,776.37 lakhs, the respondent-company has a liability, in the form of borrowings and third parties liabilities, to the extent of Rs. 2,580 lakhs. The petitioner-company has, thus, prayed for the winding-up of the respondent-company. 5. The respondent-company resisted the petition for winding-up. It was pleaded that as against the supply order for 4.15 lakhs of cartons, the petitioner-company had supplied only 4,12,915 cartons valued at Rs. 69,16,326.25. It was averred that as per the books of account of the respondent-company, only a sum of Rs. 1,80,239.10 is payable to the petitioner-company as under: Rs. ( a )Total value of 4,12,915 cartons supplied 69,16,326.25 ( b )Earnest m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, while 2,085 cartons were supplied less than the quantity ordered for. Though, as per the terms of the supply order, the respondent-company was entitled to reject the sub-standard cartons as also to withhold entire payment therefore in addition to forfeiture of the earnest money, the respondent- company has only withheld 10 per cent of the cost of such sub-standard cartons as was done in the case of other suppliers. It was also pleaded that the respondent-company has a sound financial position, since being a Government company it is being fully financed by the Government of Himachal Pradesh to meet all its financial obligations and that it is in a position to discharge all its financial obligations in accordance with law. 7. It will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nonetheless it is a form of equitable execution. Propriety does not affect the power but only its exercise" (p. 430) 10. In Madhusudan Gordhandas Co. v . Madhu Woollen Industries (P.) Ltd [1972] 42 Comp. Cas. 125 (SC), it was held by the Apex Court: "....The principles on which the Court acts are first that 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." (p. 131) Again in Amalgamated Commercial Traders (P.) Ltd v . A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 (SC), it has been held by the Apex Court that a winding-up petition is not a legitimate means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , detailed above, it is not a fit case for the exercise of powers of winding-up under section 433. 13. There is yet another aspect of the case. Admittedly, a civil suit for the recovery of the amount, claimed in the present petition, has been filed by the petitioner-company against the respondent-company and such suit is pending adjudication. Under these circumstances, the machinery for winding-up cannot be allowed merely as a means for realising a debt, which is disputed and is subject-matter of a suit. The High Court of Punjab and Haryana in State Trading Corpn. of India Ltd v. Punjab Tanneries Ltd [1989] 66 Comp. Cas. 634, also had declined to exercise the powers under section 433, in view of the fact that the petitioner therein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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