Winding up petition admitted due to default on obligations, Respondent directed to pay claimed amount

The petition for winding up is admitted based on the guarantee in the Patronage Letter and admissions by the Respondent Company. The Respondent failed to fulfill its obligations, triggering default events. The court directed the Respondent to deposit the claimed amount by a specified date, warning of further proceedings if the payment is not made.

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Issues Involved:
1. Basis of the winding-up petition.
2. Validity and enforceability of the Patronage Letter.
3. Merger of the Patronage Letter into the decree of the Turin Court.
4. Jurisdiction and applicability of foreign law.
5. Alleged fraud and principles of natural justice.
6. Time-barred claim.
7. Commercial solvency of the Respondent Company.
8. Collusive suit in Calcutta.

Detailed Analysis:

1. Basis of the Winding-Up Petition:
The petition is based on the Patronage Letter dated 5 June 2007 and the admissions of the Respondent Company. The Petitioner contends that the Respondent Company acknowledged its liability and defaulted on the obligations under the Patronage Letter. The statutory notice and the petition clearly indicate that the claim made by the Petitioner is based on the Patronage Letter, not solely on the decree of the Turin Court.

2. Validity and Enforceability of the Patronage Letter:
The Patronage Letter was issued by the Respondent Company, guaranteeing payment upon default by VDC. The Respondent Company admitted its liability in various correspondences, and the events triggering the guarantee, such as default by VDC and dilution of shareholding, have occurred. The Patronage Letter is not a mere letter of comfort but a binding guarantee.

3. Merger of the Patronage Letter into the Decree of the Turin Court:
The doctrine of merger does not apply to foreign judgments. The original cause of action does not merge into a foreign judgment, and the Petitioner can maintain action on either the original cause of action or the foreign judgment. The petition is based on the Patronage Letter and not on the decree, thus the question of merger does not arise.

4. Jurisdiction and Applicability of Foreign Law:
The Patronage Letter specifies that it is governed by Italian law and subject to the exclusive jurisdiction of the Turin Court. However, the petition for winding up can only be filed in this court, and the jurisdiction to entertain a winding-up petition lies with this court. The argument based on the exclusion clause has no merit as the petition is based on the Patronage Letter and admissions of liability.

5. Alleged Fraud and Principles of Natural Justice:
The Respondent Company claimed that the decree of the Turin Court was obtained by fraud and is opposed to natural justice. However, the Patronage Letter provided for service of summons at the address of VDC, which was not changed by the Respondent Company. The Respondent Company was aware of the proceedings, and there was no breach of principles of natural justice.

6. Time-Barred Claim:
The claim based on the Patronage Letter is not time-barred. The Respondent Company acknowledged its liability as late as 9 December 2010, and the petition filed on 17 October 2012 is within the limitation period.

7. Commercial Solvency of the Respondent Company:
Commercial solvency alone cannot be a ground to reject the winding-up petition. The Apex Court has held that commercial solvency is relevant to determine if there is a bona fide dispute as to liability, but it cannot be a standalone ground. The Respondent Company's refusal to pay the admitted debt without good reason justifies the petition for winding up.

8. Collusive Suit in Calcutta:
The suit filed in Calcutta is claimed to be collusive and does not affect the right of the Petitioner to proceed with the winding-up petition. The suit seeks to restrain the debenture trustees from treating the breach as an event of default and is not concerned with the interse dispute between the Petitioner and the Respondent.

Conclusion:
The petition is based on the guarantee contained in the Patronage Letter and the admissions of the Respondent Company. The events of default have occurred, and the Respondent Company has not honored its obligation. The petition is admitted with directions for the Respondent Company to deposit the claimed amount by 27 January 2014, failing which the petition will proceed further.

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