Delhi High Court Marina World Shipping Corporation Ltd. vs Jindal Exports (P) Limited on 16 December, 2003 Equivalent citations: (2004)2COMPLJ50(DEL), [2004]54SCL312(DELHI) JUDGMENT Mukundakam Sharma, J. 1. The present winding up petition is filed by the petitioner against the respondent company contending, inter alia, that the respondent is indebted to the petitioner in view of the foreign award passed in the arbitration proceeding between the parties, and that the respondent has failed and neglected to pay the said debt in spite of service of the statutory demand notice on it. Before filing the present petition, a statutory demand notice, as provided for under Section 434 of the Companies Act, was issued by the petitioner to the respondent. In the said notice issued by the respondent on 29 September, 2001, the petitioner called upon the respondent to make payment of the dues under the foreign award, dated 26 September, 2000. It was stated in the said notice that in accordance with the terms of the charterparty agreement, dated November, 1994, between the petitioner and the respondent an amount of US $ 47,506.42 fell due as demurrage which was claimed and, since it was not paid, the dispute was referred to arbitration and that on 26 September, 2000, the arbitrator considering the various claims and counterclaims raised by the parties, passed an award in respect of the voyage performance of the vessel together with interest at the rate of 7% p.a. It was also stated in the said notice that the said award was final and, therefore, a sum of US $ 68,843.91, which constitutes the awarded sum and the interest and a further sum of US $ 3477.13 is owed by the respondent to the petitioner. By the aforesaid notice, the petitioner called upon the respondent to make the aforesaid payment of US $ 72,321.04 with further interest till the date of payment failing which it was stated that the petitioner would commence appropriate winding up proceeding. No reply to the aforesaid notice was sent by the respondent and, accordingly, the present petition is filed by the petitioner. 2. It is, therefore, established from the records that the present winding up petition is based upon the foreign award, dated 26 September, 2000, in terms of which it is the stand of the petitioner that the respondent is liable to pay and, therefore, indebted to the petitioner for a sum of US $ 72,321.04 with interest. 3. The contention of the petitioner in the present petition is that the respondent has neglected and failed to make payment as per the foreign award, dated 26 September, 2000, and, therefore, the preconditions for exercising powers under Sections 433 and 434 are proved and established. It is also a further contention of the petitioner that the foreign award, dated 26 September, 2000, would by itself, constitute a debt presently payable by the respondent to the petitioner. 4. It is an admitted position that the petitioner so far has not sought for enforcement of the award in terms of the provisions of Sections 44, 45, 46, 47 and 48 of the Arbitration and Conciliation Act. Therefore, one of the issues that arise for my consideration in this petition is whether the present foreign award constitutes a debt due as sought to be made out by the petitioner, and whether the present winding up petition is maintainable in absence of an action by the petitioner for getting the award enforced so as to make it binding on the parties ? 5. The next important question which also would arise for consideration is whether there was any legal, valid and binding arbitration agreement between the parties, and, since a dispute is raised in respect of the same, whether the present petition is maintainable ? 6. Section 433 of the Companies Act lays down the circumstances under which a company could be wound up by the court. Reliance is placed in the present case by the petitioner that in view of the foreign award passed in favor of the petitioner and against the respondent, and also in view of the fact that the respondent has neglected to make payment in respect of the aforesaid foreign award, Clause (e) of Section 433 of the Act is attracted in the present case, as it is provided therein that a company could be wound up by the court, if it is found that the respondent is unable to pay its debt. The aforesaid Clause (e) of Section 433 has been the subject matter of interpretation in various decisions. In this connection, reference may be made to a decision of the Gujarat High Court in Registrar of Companies, Gujarat v. Kavita Benefits (P) Ltd. (1978) 48 Comp Case 231 (Guj), wherein the Gujarat High Court, after referring to various decisions of the Supreme Court, has held that the word 'debt' under Sections 433 and 434 of the Companies Act means that the amount must be then due and payable and, therefore, refers to the present obligation. In other words, it is a liability