Winding up petition denied where factual disputes and prima facie business commencement response precluded liquidation.

Whether a winding up petition should be allowed turned on disputed factual issues; the HC held that contested disputes between directors about profitability and further capital calls were inappropriate for resolution in winding up proceedings and therefore should not support liquidation. The respondent produced a prima facie satisfactory response on commencement of business within the statutory period and ongoing efforts to obtain possession of the NOIDA plot, supported by a pending writ with interim protection. An inspection report was not treated as decisive. The respondent's undertaking to furnish accounts and respect shareholder and director rights led to dismissal of the petition.

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Issues: Whether the petition for winding up the respondent-company under Section 433(c), Section 433(f) and Section 439(1)(c) of the Companies Act, 1956 should be allowed.

Analysis: The dispute between directors concerning alleged profitability and obligation to make further investments was found to be a contested question of fact unsuitable for resolution in winding up proceedings. The respondent produced a prima facie satisfactory response regarding commencement of business within one year and ongoing efforts to secure possession of the NOIDA plot, including a pending writ in the Allahabad High Court with interim protection. An inspection report obtained at the instance of the petitioner was not given decisive weight. The respondent also undertook to furnish accounts and annual reports and to respect the petitioner's rights as a shareholder and, if applicable, as a director.

Conclusion: The petition for winding up is dismissed.

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