CBZ CHEMICALS LTD Vs. KEE PHARMA LTD

JUDGEMENT

(1.) The Petitioner, CBZ Chemicals Ltd., has filed this petition under Sections 433 and 434 of the Companies Act, 1956 ("Act") read with Section 439 thereof seeking the winding up of the Respondent, Kee Pharma Ltd. on the ground of its inability to pay its debts owing to the Petitioner.

(2.) The background to the petition is that, on 18 th May 2009, an agreement was entered into between the parties for the sale of design for the process of manufacturing a drug, "Atorvastatin" for a total consideration of US$ 550,000 to be paid by the Respondent to the Petitioner. It is stated by the Petitioner that what was sold to the Respondent was only the "design of process" which would lead to the production of the drug "Atorvastatin" and not the sale of the process itself.

(3.) It is stated that under Clause 3 of the agreement, the Petitioner was to provide all relevant details and technical support to the Respondent "to facilitate the validation of the design of the process, the development of the process that leads to the manufacture of Atorvastatin and filing of the Patent for the same." Clause 4 of the agreement dealt with the mode of payment of US$ 550,000 by the Respondent to the Petitioner. A sum of US$ 40,000 was to be paid to the Petitioner by the Respondent and would be treated as an interest free refundable deposit. The amount would be refundable immediately in case the sale of the process design agreement was terminated in terms of Clause 2.c and 2.d or otherwise adjusted in terms of Clause 4.d. Under Clause 4.c (ii), a sum of US$ 60,000 was to be paid immediately after the successful validation of the design of the process. Thereupon the Petitioner was to have no further claims under the bank guarantee ("BG") issued by the Respondent. However, if the Respondent defaulted in making the payment within the stipulated time period, the Petitioner would have the liberty to invoke the BG issued by the Respondent. Upon the Respondent filing for patent of the process and grant of the patent by the Patent Office, the agreement was to come to its logical conclusion.