Judgment

MOHAN, J.- Leave granted.

2. The brief facts leading to this appeal are as follows. The first respondent, North India Petrochemicals Limited (hereinafter referred to as NIPL) filed a winding-up petition (Company Petition No. 1 of 1993) before the High Court of Allahabad, Lucknow Bench, Lucknow under Sections 433, 434 and 439 of the Companies Act, 1956 (hereinafter referred to as the Act).

3. On July 1, 1988 a Shareholders Agreement or Promoters Agreement was entered into. That superseded earlier agreements which recorded that the grant of a Letter of Intent for the manufacture of 15,000 tonnes per annum of Phthalic Anhydride in favour of the appellant-Corporation. However, the said Letter of Intent was to be used, utilised and implemented in collaboration with M/s Dalmia Dairy Industries Limited (Respondent 2 herein). The collaboration agreement or the promoters agreement contemplated that a new company would be brought into existence called the Northern India Petrochemicals Limited. Clause 3 of the agreement provided that initial authorised capital would be Rs 5 lakhs which would be issued in equity shares of Rs 10 each while the subscribed capital of the company would be such as would be decided by the Board of Directors of the Company from time to time.

4. Clause 6 of the said agreement contemplated that each party would ensure that its respective shareholdings in the paid-up equity capital of the company shall be 26% plus 10 equity shares for PICUP (the appellant herein) and 25% minus 10 equity shares for second respondent, Dalmia Dairy Industries Limited.

5. Clause 7 of the agreement further provided that the Board would consist of 13 Directors out of which 4 were to be nominated by PICUP, the appellant herein and 3 by the second respondent, Dalmia Dairy Industries and the remaining 6 Directors were to be appointed as per the provisions of the Act.

6. Clause 13(a) stated that the appellant, Dalmia Dairy Industries Limited will contribute equal sums as may be required, from time to time, for the purpose of preliminary and exploratory and other expenses. These contributions are to form part of the share capital agreed to be contributed by each party under the agreement.

7. Northern India Petrochemicals Limited came to be incorporated on March 12, 1985.

8. Differences arose between the second respondent and the appellant. The second respondent got the disputes referred to arbitration as per clause 27 of the promoters agreement dated July 1, 1988 by letter dated December 19, 1991. The second respondent nominated the former Chief Justice of Delhi High Court, Justice Shri Shiv Prakash Narain, as their arbitrator. Thereafter the appellant nominated Shri D.N. Jha, former Chief Justice of Allahabad High Court. These two arbitrators appointed Shri Justice M.H. Kania (former Chief Justice of this Court) as Chairman.

9. On January 6, 1992, the first respondent issued a notice under Section 434 of the Act to the appellant. It was stated that an amount of Rs 140.33 lakhs had been spent on the project. The notice further stated that an amount of Rs 72.50 lakhs was payable by the appellant under the terms of the promoters agreement. That amount had not been forthcoming. On that ground it is alleged that the appellant was indebted to the tune of Rs 72.50 lakhs as on November 30, 1991 which the appellant was called upon to pay as its share contribution of NIPL within three weeks of the receipt of the notice.

10. On January 29, 1992 the appellant replied to the notice denying its liability to pay the amount of Rs 72.50 lakhs. It was stated therein that the disputes raised by second respondent M/s Dalmia Industries Limited had already been referred to arbitration and as such is pending adjudication. Hence, N1PL was not entitled to take any action.

11. In the winding-up petition it is alleged that the sum of Rs 72.50 lakhs is a debt payable by the appellant to the First respondent. The debt arose on the basis of the promoters agreement between