Court rules in favor of petitioner in winding-up petition for non-payment of lifts supplied. Privity of contract defense dismissed.

The court found in favor of the petitioner in a winding-up petition under sections 433(e) and 434 of the Companies Act, 1956, regarding non-payment for lifts supplied and installed. The respondent's argument of no privity of contract was dismissed, emphasizing their obligation to make payments. The court rejected the defense that the respondent was not directly liable for payment, emphasizing their contractual obligation. Despite previous orders for payment, non-compliance was observed, leading to the admission of the petition and ordering publication in newspapers for a future hearing.

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Issues:
Winding-up petition under sections 433(e) and 434 of the Companies Act, 1956 regarding non-payment for lifts supplied and installed by petitioner to respondent-company NIDC.

Analysis:
1. The petitioner engaged in the business of manufacturing and installing lifts supplied, delivered, and commissioned lifts to the respondent's client, UPSIDC. A formal contract was executed, but full payment was not made, leading to a balance of Rs. 15,53,372. A legal notice demanding this amount was sent.

2. The respondent's letter dated 3-11-1999 acknowledged an amount payable to the petitioner, supporting the petitioner's claim. The petitioner emphasized this as a clear admission of liability, along with another letter indicating pending payments.

3. The terms of payment in the contract between the parties were analyzed, highlighting the obligations of NIDC to release payments to the petitioner. The respondent's argument of no privity of contract between them and the petitioner was dismissed, emphasizing the responsibility of the respondent to make payments.

4. The defense raised was that the respondent was a consultant of UPSIDC and not liable for payment. However, the court found no substance in this argument, emphasizing the contractual obligation of the respondent to make payments to the petitioner directly.

5. The court noted the absence of neglect in making payment and the bona fide demand by the petitioner. The respondent's argument of payment contingent on funds from UPSIDC was rejected, and reliance on case law was deemed irrelevant.

6. Despite previous orders for payment, no compliance was observed, indicating mala fide conduct by the respondent. The petition was admitted, and the citation was ordered to be published in newspapers. The case was set for a future hearing date.

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