SANJIV KHANNA, J.:

Petitioner-RPG Cables Limited (hereinafter referred to as RPGCL, for short) seeks winding up of the respondent-Logic Easter India Pvt. Limited (hereinafter referred to as the respondent-company, for short) on the ground of inability of the respondent-company to pay debt due under Section 433(e) read with the presumption raised under Section 434(1)(a) of the Companies Act, 1956. The allegation of the petitioner is that the respondent-company has failed to pay the undisputed/ admitted debt inspite of service of statutory notice dated 21st January, 2008 under Section 434(1)(a) of the Act. Clause (c) of Section 434(1) is also evoked by the petitioner.

2. The respondent-Company has defended the present proceedings, inter alia, on the ground that the debt claimed is not debt due but a disputed debt and the present proceedings are nothing but arm-twisting tactics. It is also alleged that the petitioner has not approached the court with clean hands.

3. Both the parties have not disputed that they had entered into an Agreement dated 15th December, 2002 (hereinafter referred to as the Agreement, for short) and that an amount of Rs.4.73 crores was paid by the RPGCL to the respondent-Company.

4. The Agreement, as per Schedule I required the respondent-Company to develop the equipment, including software, mentioned in it and transfer of rights to enable RPGCL to manufacture the said product. Schedule I reads as under:-

“SPECIFIED PRODUCT

1. Specifies Product shall include (switching functionality) CoT Broad Band Router meeting the clause 6.5.2.1 and all its sub-clauses (6.5.2.1.1 to 6.5.2.1.3 and 6.5.2.1.3.1 & 6.5.2.1.3.3) of the TEC, BSNL specification for Generic Requirements of Optical Multi Service Access Network Equipment on STM-1/4/16 SDH transport No.GR/OMSAN-01-01 MAR’ 2003 or its latest amendment.

It is hereby clarified that the same generic product specified under the framework of different specifications/amendments would be treated as same products.

It is also clarified that the Product includes NMS (Network Management Software) that would be an integral part of the product.

2. All components, accessories and spares used for the manufacture of above;

3. Such other items/components/accessories as may be mutually agreed upon by the Parties.”

5. RPGCL, in support of its claim, has relied upon Clause 2 of Article XIII of the Agreement which reads :

“2. In the event this agreement is terminated due to breach of contractual terms by LE, prior to obtaining TEC approval or for not meeting the development within three months of dates mentioned in Schedule II and keeping into account the considerations mentioned in Article XII clause 7, LE shall refund (with 14% interest) Development expenses received from RPGCL and to secure such refund there shall have to be made an Escrow arrangement over the Bank account of LE. Payment received in any form for other products licensed to other parties will be diverted to RPGCL to meet LE’s payment obligations to RPGCL.”

(LE stands for the respondent company)

6. RPGCL relies upon Schedule II of the Agreement in support of the contention that the product had to be designed within a specific time limit as stipulated in the said Schedule. My attention was drawn to specific milestones indicated in Schedule II along with the time/schedule of delivery. It is stated that the respondent has failed to adhere to the said schedule and therefore clause 2 of Article XIII of the Agreement is applicable.

7. On the other hand, the respondent-Company has defended the present proceedings on the ground that the time schedule for payments was not adhered to by RPGCL as there were delays in making payment of the instalments fixed in Schedule-IV of the Agreement. The case made out by the respondent-Company is that delay in payment had an adverse impact on the timely development of the product which resulted in delay in procuring equipments to test, debugging the product etc. Further, development of

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