M/s Cosmas Research Lab Ltd. ... Respondent(s) Present: Mr. L.B.Rai, Advocate for the petitioner. Mr. Nitin Thatai, Advocate for the respondent. Anil Kshetarpal, J. 1. Through this petition, filed under Section 433 (e) and (f), 434 and 439 of the Companies Act, 1956 (hereinafter referred to as "the 1956 Act") read with Rule 9 of the Companies (Court) Rules, 1959 (hereinafter referred to as "the 1959 Rules"), the petitioner prays for passing an order for winding up of the respondent company for having failed to pay its debt. 2. At the outset, it must be noticed that Section 433(e) of the 1956 Act uses the expression "if the company is unable to pay its debts". Sub Section (f) to Section 433 of the 1956 Act uses the expression "if the Tribunal is of the opinion that it is just and equitable, then the company should be wound up". Section 434 of the 1956 Act elaborates as to when the company is deemed to unable to pay its debts. Section 439 of the 1956 Act prescribes the procedure for filing a petition. 1 of 11 ::: Downloaded on 08052022 00:23:41 ::: Company Petition No. 123 of 2014 (O&M) 2 3. In the present case, the respondent company had placed orders for supplying, testing, installation and commissioning of heating, ventilating and air conditioning system at its factory in the year 2010 for a total amount of ₹6,25,00,000/. Admittedly, the amount of ₹5,78,23,012/ out of total payment of ₹6,25,00,000/ has been paid by the respondent to the petitioner. The petitioner claims that the balance amount of ₹68,56,000/ has not been paid. As per the tendered document and the contract entered into between the parties, the payment was payable as per the following schedule: "a) 10% advance against ABG (Advance Bank Guarrantee). b) 80% against prorata installation. c) 10% against commissioning and submission of PGB (Post Bank Guarantee) of 10% valid for one year from the date of commissioning". 4. On the one hand, the petitioner company claims that it has already completed its work, whereas on the other hand, the respondent claims that neither the work is complete nor the material that was used was of appropriate quality. It is claimed that the petitioner company used the substandard quality material which was not as per the specification and the petitioner company has also failed to provide a standard quality certification of the products used by them as per the standards mentioned in the tendered document. 5. Since a dispute arose, a joint meeting between both the parties was held on 13.06.2013 at the work site of the respondent company at Ludhiana. The minutes of the aforesaid meeting have been placed on the record, which are extracted as under: 2 of 11 ::: Downloaded on 08052022 00:23:42 ::: Company Petition No. 123 of 2014 (O&M) 3 "MOMMEETING HELD AT COSMAS, LUDHIANA ON 13/06/2013 Following was agreed by all present: 1) COSMAS VRF ACCOUNT Net Balance payment @ 90% Rs.13.26 L 2) Payment due on commissioning of VRF @ Rs.1.83 L 10% 3) COSMAS BETALECTUM BLOCK Balance amount payable Rs.68.56 L 4) COSMAS HAS SUGHT CLEARANCE Rs.9.80 L OF EXTRA ITEMS OF VALUE FROM MEHTALIA Housings 7,50,000/ Flexible 2,30,000/ 9,80,000/ Cosmas committed to get this extra items cleared before 3rd July, 2013. 5) Cosmas will issue a List of operational observations noted by them after commissioning so that Suvidha address them to the requirement. List to be issued by 20/06/2013 6) COSMAS PROPOSED RELEASE OF BALANCE PAYMENTS AS PER