Privity of contract is essential for winding up on debt grounds; absent a contractual obligation, the petition fails.

A winding up petition based on alleged unpaid interior decoration charges was not maintainable because the record did not establish any contractual relationship between the petitioner and the company. In the absence of privity and a corresponding legal obligation, no enforceable debt was shown against the company, so inability to pay debts could not be invoked as a ground for winding up. The petition under Section 433(e) of the Companies Act, 1956 therefore failed.

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Issues: Whether the winding up petition was maintainable under Section 433(e) of the Companies Act, 1956 in the absence of a contractual obligation between the petitioner and the respondent company.

Analysis: The petition was founded on an alleged liability for interior decoration charges, but the material on record did not establish any contractual relationship between the petitioner and the respondent company. In the absence of such privity and corresponding legal obligation, no enforceable liability was shown against the company so as to sustain a winding up petition on the ground of inability to pay debts.

Conclusion: The issue was answered against the petitioner and in favour of the respondent company; the petition under Section 433(e) failed.

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