V.K. Jhanji, J.@mdashRespondent-company, namely, M/s Steel Strips Wheels Limited, was incorporated on 30.8.1987. The main objects for which respondent-company was established are inter-alia to carry on the business of manufacturers, buyers, sellers, importers, exporters and dealers in wheels, wheel rims, crown wheels, steering wheels, pinion sets, cranks, engines, transmission and differential gears used in automative vehicles, air crafts, vessels, tractors, earthmoving machinery, locomotive vehicles mechanical devices, equipments apparatus and spares for industrial appliances; to manufacture, produce, process, buy, sell, deal in all kinds of ferrous and non-ferrous forgings and allied products for automotive, general engineering industries; to manufacture, fabricate, process, buy, sell, deal in all kinds of castings and stamping, machinery parts, moulds, press tools, jigs, fixtures iron and steel products and other metallic products, die making, die casting automobile parts, spare parts of all kinds of machinery and to undertake metal press jobs, forging jobs and all other engineering job work; to manufacture and carry on the business of rolling, re-rolling, welding extruding, stretching, reducing, forging, pressing, drawing, machining, grinding, processing, working or finished in any manner of all kinds of metals and alloys; and, to lend, lease, buy, sell, import, export or otherwise deal in technical know-how and to enter into technical collaboration agreement for the manufacture of wheels, rims and other items mentioned above against consideration of moneys, worth and/or against royalty, payments, receipts of lumpsum consideration in money worth.
2. The present petition Under Sections 433, 434 and 439 of the Companies Act has been filed by the petitioner-company for winding up of respondent-company, which is also a public limited company, on the ground that since 1989 petitioner company has been regularly supplying paint product, Cathodic Electro-Deposition primer for auto/car wheels to the respondent-company which had set up an auto wheel project at Patiala. It is further the case of the petitioner that in the months of August, September and October, 1995, petitioner supplied various quantities of the said product to the respondent and raised bills in respect thereof totalling an amount of Rs. 6,11,901/-. It has been averred that petitioner duly received the said product in respect of bill raised by the petitioner, but despite the repeated requests the respondent declined to make the payment. It is further the case of petitioner that respondent was obliged to file and provide appropriate sales tax and form, i.e. For No. C to the petitioner against the sales made by the petitioner to the respondent since the year 1991 in respect of bills raised by the petitioner on which exemption of 9 per cent had been given to the respondent. The list of outstanding sales tax forms, i.e. Form ''C pending with the respondent against the bills raised by the petitioner has been attached as Annexure P-2 to the petition. It has been stated that a total amount of Rs. 18,61,000/- is due from the respondent to the petitioner in lieu of the failure of the respondent to provide appropriate sales-tax form. It has been stated that in all, respondent owes to the petitioner the principal sum of Rs. 6,11,901/- and a sum of Rs. 18,61,000/-, totalling Rs. 24,72,901/-, but respondent has failed and neglected to make the payment to the petitioner despite a notice having been served, u/s 434 of the Companies Act, calling upon the respondent to pay the said amount. In this petition, it has thus, been prayed that directions be given to wind up the respondent-company under the provisions of Companies Act.
3. In response to notice of this petition, written statement has been filed by the respondent. Respondent has taken certain preliminary objections in regard to maintainability of the petition. It has further been stated that petitioner had approached the respondent for the supply of Cathodic Electrodiposition Primer, a product required by the respondent for the coating of wheels manufactured by it. In this regard, order dated 26.5.1989 was placed by the respondent on the petitioner. It has been averred that similar orders on the same terms and conditions as contained in order dated 26.5.1989 were placed by the respondent on the petitioner from time to time. Order dated 26.5.1989 contained an arbitration clause providing for arbitration between the parties in the event of any dispute or differences arising between them. It has been stated by the respondent pursuant to the aforesaid order, respondent continued to place orders on the petitioner from time to time, even though petitioner repeatedly failed to fulfil its contractual obligations. It has been averred that since in spite of various letters written by the respondent to the petitioner the petitioner failed to fulfil its part of the contract, respondent was left with no other alternative but to terminate the contract by way of letter dated 17.9.1995. On termination of the contract, petitioner served notice on the respondent in terms of Clause 13 of the Contract for referring the matter to the Arbitrator and the petitioner appointed Shri Rajinder Sachhar, retired Judge, and also asked the respondent to appoint its Arbitrator. Respondent on receipt of the letter conveyed the name of Shri S.P. Goyal, retired Judge, as Arbitrator on behalf of the respondent in terms of Clause 13 of the contract. It has been averred that petitioner also filed suit for specific performance, being Suit No. 2329 of 1995 before the High Court at New Delhi which is pending. Respondent has further averred that petitioner is liable to pay to the respondent a sum far in excess of Rs. one crore. In the written statement, it has thus, been prayed by the respondent that since the dispute is the subject-matter of civil suit in the Delhi High Court, the company petition for winding up of respondent-company is not competent. A detailed rejoinder on behalf of the petitioner has been filed.
4. It has been contended by the counsel for petitioner that the matter in the civil suit has no connection to the material which had been supplied to the petitioner for which the amount is being claimed in this petition. He submitted that under contract dated 26.5.1989, petitioner had only agreed to supply Cathodic Electro-deposition Primer, whereas the details which have been annexed to the company petition relate to some other material and not the one which is the subject matter of contract dated 26.5.1989.
5. After hearing the learned counsel, I am of the view that the petition deserves to be dismissed as the defence raised by the respondent is bona-fide and not sham, as has been contended by counsel for the petitioner. In para 8 of the company petition, petitioner has categorically stated that it had been regularly supplying paint product, Cathodic Electro-Deposition Primer for auto/car wheels, to the respondent. In para 9, it has been averred that in the months of August, September and October, 1995, petitioner supplied various quantities of the said product to the respondent and raised bills in respect thereof totalling to an amount of Rs. 6,11,901/-. It is the clear case of the petitioner that what was supplied to the respondent was Cathodic Electro-deposition Primer for which they had raised bills for an amount of Rs. 6,11,901/-. A reading of Annexure R-l, order dated 26.5.1989, shows that the contract was in regard to supply of Cathodic Electro-deposition Primer. In presence of these pleadings, it is not open to the counsel for petitioner to contend that the material supplied vide bills (Annexure P-l) was some other material and not Cathodic Electro-Deposition Primer. In any case, there are no pleadings in this regard. Counsel for the petitioner has fairly conceded that in the civil suit which petitioner had filed, order had been made for referring the matter to the Arbitrator. Order dated 2.9.1996 reads as under :-
"Mr. Sohault Dutt, learned counsel for the plaintiff and Mr. Nidhesh Gupta counsel for the defendants submits that the parties have arrived at a compromise according to which all the disputes between the parties will be referred to arbitration; the Arbitrators will be nominated within a week; the disputes will be referred to arbitration within a month of nominating the arbitrators; and the arbitration will be conducted in New Delhi. In view of this development, counsel for the plaintiff submits that the plaintiff may be permitted to withdraw the suit. Accordingly the suit is dismissed as withdrawn."
From a reading of the order, it is apparent that all the disputes between the parties have been referred to arbitration, meaning thereby that the amount relating to the bills appended as Annexure PI and also out-standing sales-tax in lieu of Form ''C being the subject matter of arbitration, it can safely be concluded that the defence raised by the respondent that the amount is not due and payable is neither sham nor has been set up only for the sake of setting of defence.
6. For the forgoing reasons, this petition is to be dismissed. It is so ordered.
