Quasi-partnership deadlock and lack of probity can justify winding up on just and equitable grounds despite alternative remedies.

Section 443(2) of the Companies Act, 1956 was treated as a limitation on, not a bar to, the court's discretion under section 433(f). The availability of alternative remedies under sections 397 and 398 does not by itself prevent a winding up petition on just and equitable grounds; the court considers whether that remedy is efficacious and whether resort to winding up is unreasonable. In a quasi-partnership company, irreconcilable deadlock between the only shareholders/directors, serious lack of probity, disputed management changes, and persistent statutory non-compliance were held sufficient to establish a prima facie case for admission of the petition.

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Issues: (i) whether section 443(2) of the Companies Act, 1956 barred the exercise of discretion under section 433(f) where an alternative remedy was available, and (ii) whether the petitioner had made out a prima facie case for admission of the winding up petition on just and equitable grounds.

Issue (i): whether section 443(2) of the Companies Act, 1956 barred the exercise of discretion under section 433(f) where an alternative remedy was available.

Analysis: Section 443(2) was held not to create an absolute bar to jurisdiction under section 433(f). It operates as a limiting factor on the court's discretion only when the alternative remedy is efficacious and the petitioner is acting unreasonably in seeking winding up instead of pursuing that remedy. The availability of remedies under sections 397 and 398 does not, by itself, oust the court's power to entertain a winding up petition on just and equitable grounds.

Conclusion: Section 443(2) did not bar the petitioner's invocation of section 433(f).

Issue (ii): whether the petitioner had made out a prima facie case for admission of the winding up petition on just and equitable grounds.

Analysis: The company was treated as a quasi-partnership, with the petitioner and the second respondent being the only shareholders and only directors for life. The record disclosed a complete and irreconcilable deadlock in management and ownership, serious allegations of lack of probity, disputed appointments and removals of directors, and continuous statutory non-compliance. The court held that the deadlock was incapable of resolution and that the alternative remedy under sections 397 and 398 was not efficacious in the circumstances. A prima facie case for winding up on the just and equitable ground was therefore established.

Conclusion: A prima facie case for admission of the winding up petition was made out.

Final Conclusion: The winding up petition was admitted, and advertisement of the petition was directed.

Ratio Decidendi: In a quasi-partnership company marked by irreconcilable deadlock and lack of probity, section 443(2) does not oust the court's power under section 433(f) but only restricts discretion where an efficacious alternative remedy exists and the petitioner acts unreasonably in bypassing it.

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