TMI Blog2008 (9) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... . 16 OF 2004 - - - Dated:- 25-9-2008 - I.M. QUDDUSI, J. Sashikanta Mishra and Subhakanta for the Petitioner. Prasanta Pradhan, S.K. Pradhan, B.B. Patnaik and P. Geetu Laxmi for the Respondent. JUDGMENT I.M. Quddusi, J. This company petition has been filed for winding up of the opposite party-company, namely, M/s. Neelachal Ispat Nigam Ltd., under sections 433, 434 and 439 of the Companies Act, 1956. 2. The opposite party-company M/s. Neelachal Ispat Nigam Ltd., which was incorporated in March, 1982 entered into a contract with the petitioner-company, namely, M/s. Lloyds Metals and Engineers Ltd., having its registered office at Plot Nos. A9 and 10, M.I.D.C. Phase II, Dombivili (East) district, Thane in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be final and binding on both the parties. Work under the contract shall be continued by the contractor during the arbitration proceedings unless otherwise directed in writing by the purchaser or unless the matter is such that the works cannot possibly be continued until the decision of the arbitrators or of the umpire, as the case may be, is obtained and save as those which are otherwise expressly provided in the contract, no payment due or payable by the purchaser shall be withheld on arbitration proceeding unless it is the subject-matter or one of the subject-matter thereof." 3. According to the opposite party, admittedly the delivery was to be completed by July 19, 1999, but due to non-completion of the deliveries within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled. First if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable (see London and Paris Banking Corporation, In re [1874] L. R. 19 Eq. 444). Again a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been done properly was not allowed (see Brighton Club and Norfolk Hotel Co. Ltd., In re [1865] 35 Beav. 204). Secondly, where the debt is undisputed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and is an abuse of the process of court (see Gold Hill Mines, In re [1883] 23 Ch. D 210 (CA)). To the same effect is the decision of the Calcutta High Court in the case of Bukhtiarpur Bihar Light Railway Co. Ltd. v. Union of India [1954] 24 Comp. Cas. 507 ; AIR 1954 Cal. 499. In the case of Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456, the Supreme Court pointed out that it is well-settled that a winding up petition is not a legitimate mode of seeking to enforce payment of a debt which is bona fide disputed by the company. The petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed and under circumstances may be stigmatized as a scand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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