HARYANA TELECOM LIMITED Vs. STERLITE INDUSTRIES INDIA LTD

JUDGEMENT

(1.) This is an appeal under section 483 of the Companies Act, 1956 (hereinafter referred to as "the 1956 Act"), against the order dated January 22, 1998, passed by the learned company judge dismissing Company Application No. 46 of 1998 filed by the appellant under section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") in Sterlite Industries (India) Ltd. v. Haryana Telecom Ltd. (Company Petition No. 147 of 1997 ).

(2.) The facts necessary for deciding the issue raised in this appeal are that Sterlite Industries (India) Ltd. (hereinafter described as "the respondent") filed a petition under sections 433, 434 and 439 of the 1956 Act for winding up of Haryana Telecom Ltd. (hereinafter described as "the appellant"), on the ground that the appellant (non-petitioner before the learned company judge) is commercially insolvent and is unable to discharge its liability to pay off the admitted debts in terms of the demand made by the respondent (petitioner before the learned company judge ). In the said petition, it has been averred that the respondent had supplied poly cable wrap to the appellant between February 21, 1995, and August 31, 1996, in pursuance of various purchase orders placed by the latter but it failed to pay Rs. 2. 09 crores with interest at the rate of 24 per cent. In support of its plea for winding up of the appellant, the respondent relied on letters, annexures P-3, dated December 12, 1996, P-5 dated December 31, 1996, and P-8 dated February 24, 1997, as well as the minutes of the meeting held between the officials of the two companies (annexure P-7) and the notice annexure P-9, dated June 18, 1997, sent by its counsel to the appellant under section 434 of the 1956 Act. It also relied on the letters, annexure P-4, dated December 25, 1996, and annexure P-6, dated January 7, 1997, written by the appellant admitting its liability to pay the amount due.

(3.) After service of the notice of Company Petition No. 147 of 1997, the case was adjourned by the learned company judge to January 23, 1998, on the request of counsel for the appellant for grant of time to file a written statement. However, instead of doing that, the appellant filed an application dated January 17, 1998, and prayed for dismissal of the petition on the ground that the same cannot be entertained in view of section 8 of the 1996 Act. By the impugned order, the learned company judge dismissed the application by observing that the application is not maintainable. He also held that the power to pass an order of winding up against a company is vested with the company court and this power cannot be exercised by the arbitrator. L. M. Suri,