TaxTMI 
TaxTMI 
2006 (6) TMI 219
X X X X Extracts X X X X
X X X X Extracts X X X X
....property over which the petitioner envisaged interest, to build a multi-storied residential complex and that the father of the second respondent and the petitioner reached an understanding to float a company and it was accordingly that the aforesaid company came into force and one James Paul, a retired Chief Engineer was brought into the company to seek his advice. The company was formed with the main object of purchasing, developing, selling etc. of buildings and to construct houses, hospitals, flats, apartments etc. and to carry on the business of building contractors and undertake and carry out building construction works and to engage in trading of building materials of any kind. According to the petitioner, though the project began in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... there is no alternative other than to have the company wound up so that the petitioner will be able to get his share of profits. Accordingly, an order for winding up is sought for. 4. In opposition, the respondents challenge the sustainability of the winding up petition and contend that, the petitioner, if at all, has efficacious and alternative remedy before the Company Law Board under section 397 of the Companies Act. Contentions are also raised on the merits, by alleging that the transaction with the Federal Bank is not as contended by the petitioner and that the petitioner had abandoned his responsibilities attached to the post of Managing Director and left for the Persian Gulf in early 2001. It is pleaded by the respondents that no....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... partnership, undue emphasis cannot be placed on the contractual rights arising from the Articles of Association over the equitable principles derived from partnership law. 7. Reference was made by the learned counsel for the petitioner to the decision of the Apex Court in Worldwide Agencies (P.) Ltd. v. Margarat T. Desor AIR 1990 SC 737 to urge that when the materials on record disclose that the continuance of the company is prejudicial to the interest of the shareholders, the Court can consider granting alternate reliefs and that the materials on record show that the respondents are not acting in good faith. The learned counsel for the petitioners also referred to the decision of the Apex Court in Bajaj Auto Ltd. v. N.K. Firodia AIR 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed counsel for the respondents relied on the decisions of the Madras High Court in S.S. Rajakumar v. Perfect Castings (P.) Ltd. [1968] 38 Comp. Cas. 187 to urge that the existence of factions among the shareholders and bickerings between two groups of members coupled with vague allegations against the quality of management by persons in charge of the company and mere exclusion from management are not by themselves grounds for winding up of a company. Relying on the decision of the Delhi High Court in Shrimati Abnash Kaur v. Lord Krishna Sugar Mills Ltd. [1974] 44 Comp. Cas. 390 it was urged on behalf of the respondents that a petition for winding up ought not to be filed for putting pressure on the respondents to make them agree to the requ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (P.) Ltd. AIR 1968 Ker. 149 to urge that the plea of loss of substratum does not necessarily depend upon the assignment or non-availability of some of the assets of the company and that so long as certain other business activities conceived by the objections of the company continue to remain intact, there is no loss of substratum. Learned counsel for the petitioner also referred to the decision in K.T. Mathew v. Malabar Industrial Co. Ltd., [1986] 59 Comp. Cas. 969 (Ker.) to urge that the discretionary power under section 433(f) has always to be applied as a last resort and not to be applied merely on an allegation of oppression of minority, misconduct and mismanagement and that the availability of effective alternate remedy is a grounds o....