( 1 ) THE petitioner viz. Plachem Industries has filed this petition under Sections - 433 and 434 of the Companies Act, 1956 for winding up of the respondent Company on the ground that the respondent - Company has failed to make the payment of Rs. 4,93,000/- to the petitioner.

( 2 ) IT is the case of the petitioner that the respondent Company required loan on short term basis for an amount of Rs. 5 lacs and hence the request was made to the petitioner. The petitioner accordingly advanced a sum of Rs. 5 lacs in the form of three cheques on 7. 11. 1994, 12. 11. 1994 and 19. 11. 1994 for an amount of Rs. 3 lacs, Rs. 1 lac and Rs. 1 lac respectively. The respondent Company, towards part payment of the said liability has issued cheque of Rs. 2,50,000/- on 5. 12. 1994 and the balance amount of Rs. 2,50,000/- alongwith the interest has not been paid by the respondent - Company to the petitioner despite repeated requests, the respondent Company has failed to make said payment either under one or another pretext. Since the petitioner was persistently demanding the amount, the respondent Company issued two cheques No. 355540 and 355541 dated 7. 2. 1995 and 8. 2. 1995 for Rs. 1 lac each towards further part payment of the outstanding amount. The said cheques were however dishonoured, the petitioner therefore issued statutory notice on 1. 8. 1997 making the demand of Rs. 4,93,000/- as being outstanding amount of Rs. 2,50,000/- towards principal and Rs. 2,43,000/- towards interest. Neither any reply was given by the respondent - Company nor any payment was made and hence the petitioner has no other alternative remedy but to file the present winding up petition before this Court.

( 3 ) THE respondent - Company filed its affidavit-in-reply on 22. 2. 1998 wherein the facts stated and averments made in the petition were denied. The respondent - Company raised the contention in the said affidavit-in-reply that the respondent - Company was dealing in the business of finance, sales promotion etc. The petitioner - Company was intending to have the business with the employer Company of the Managing Director of the respondent Company viz. M/s. Esskay Pharmaceutical and as per the practice of granting commission and brokerage in sales promotion the petitioner had assured the commission and brokerage to the respondent - Company. The respondent Company has assisted in procuring the total business of Rs. 40,00,000/- in favour of the petitioner against which the petitioner had paid only Rs. 5 lacs as commission and brokerage for the business of 5 years. It is further stated that the petitioner - Company after getting the order for 5 years was of short finance for carrying out the business commitments. The respondent - Company therefore assured finance to the petitioner subject to execution of necessary documents, guarantee, mortgage etc. The respondent - Company through its Managing Director assured the petitioner to render finance and post dated cheques were drawn up on assurance that the necessary documents would be carried out for securing finance. Since the necessary documents were not executed by the petitioner, the petitioner - Company was called upon to return the original post dated cheques and instead of returning the said cheques the petitioner had presented the said cheques in the Bank. It is further stated that since there existed a dispute arising out of non execution of security documents and arising out of recall of cheques by the drawer and withholding of cheques by payee with a dishonest intention the respondent - Company had instructed the paying bankers to dishonour the cheque. Based on this returning of cheque, the present winding up petition was filed, with an intention that the amount of commission and brokerage should not be paid by the petitioner to the respondent Company.

( 4 ) IT is further stated that in the year 1994-95 and 1995-96 the petitioner had sent bulk drugs worth Rs. 40 lacs to M/s. Esskay Pharmaceutical