Severn Trent Water Purification, Inc vs Chloro Controls (India)Private Ltd. & ...

3. The facts giving rise to the present appeals, in brief as noted by the Division Bench of the High Court are as follows.

(vii) Authorised capital of the company is Rs.75,00,000 (Rupees seventy five lakhs) divided into 7,50,000 equity shares of Rs.10/- each. Severn Trent holds 3,75,000 equity shares being 50% of the equity share capital of the company. The other 50% of the shareholding of the company is held by Chloro Controls (India) Private Limited.

(ix) Due to wrongful stand and intransigence of Chloro Controls (India) Private Limited, there was total deadlock on joint venture and management. Despite several meetings between the parties and exchange of ideas aimed at resolving differences, relations between the parties became more and more strain.

(x) Severn Trent, therefore, terminated the Joint Venture Agreement vide its letter dated July 21, 2004 due to breaches committed by Chloro Controls (India) Private Limited and Mr. Kocha. In the termination notice, Severn Trent called upon Mr. Kocha to take steps for winding up of the company.

11. The learned Company Judge in the light of the above findings admitted the Company Petition on April 21, 2005 and issued the following directions;

13. Severn Trent being dissatisfied with order in appeal, filed Special Leave Petition (Civil) No. 6161 of 2006 in this Court. Notice was issued on April 13, 2006 and accepted on Caveat by the respondents. Another Special Leave Petition (Civil) No. 9530 of 2006 was filed by Chloro Controls (India) against that part of Division Bench order which left open the issue whether Severn Trent could file winding up petition as a Creditor and remitted it for consideration to the learned Company Judge. It is also aggrieved by the order passed by the Division Bench not dismissing the petition though Severn Trent had advertised the Company Petition without the order of the Company Court as required by law. In that Special Leave Petition, notice was issued on Aug, 22 2006 and accepted by the other side.

14. The matters appeared on Board from time to time. The Registry was directed to place them for final hearing and that is how, both the matters have been placed before us.

(i) For the costs of the petition and the order to be made thereon.

(3) A contributory shall be entitled to present a petition for winding up a company, notwithstanding that he may be the holder of fully paid-up shares, or that the company may have no assets at all, or may have no surplus assets left for distribution among the shareholders after the satisfaction of its liabilities.

63. For the aforesaid reasons, we answer question No.1 in the negative and hold that a winding up petition filed by Severn Trent in the capacity as a contributory is not maintainable.

2. Whether a winding up petition filed by Severn Trent is maintainable in the capacity as a creditor?

70. Question No. 2 is answered accordingly.

3. Whether a winding up petition filed by Severn Trent is liable to be dismissed at the threshold on the ground of premature advertisement by Severn Trent without the order of the Court as required by law?

72. Question No. 3 is answered accordingly.

73. For the aforesaid reasons, the appeal filed by Seven Trent Water Purification Inc. petitioner of the company petition, deserves to be dismissed and is hereby dismissed. So far as the appeal filed by the Chloro Controls (India) is concerned, it is disposed of in the light of the observations made in the judgment.

74. On the facts and in the circumstances of the case, all the parties are directed to bear their own costs.