Ashok Bhan, J. - (1.) THE present petition under Section 434(1) read with sections 438 and 439 of the Companies Act, 1956 ('the Act'), has been filed seeking winding up of the company Punjab Tractors Ltd. (as respondent No. 1) which arises out of the following facts:
(2.) THE petitioner is a creditor of the company by assignment from the Gleason Works, S.A., Pare Industrial De Ghlin, Bandour, Belgium. The amount due to the said the Gleason Works S.A. of Belgium was assigned by the said Gleason Works S.A. to the petitioner by deed dated 12 -1 -1994, a photostat copy of which has been attached as annexure A to the petition. It is stated that the name of the Gleason Works S.A. of Belgium has now been changed to Thenson Works S.A. of Belgium which has been added as respondent No. 2 in this petition. The Gleason Works S.A. is a joint stock company registered in Belgium and a wholly -owned subsidiary of the petitioner. The petitioner was controlling and managing its affairs and acting on its behalf till 10 -11 -1993, when the shares held by the petitioner the Gleason Works were transferred; that in accordance with the negotiations carried on between the petitioner and the respondent -company through Hypoids (India) (P.) Ltd., the respondent -company placed an order with the petitioner for three machines and tooling on 17 -7 -1990, for a total price of 20,232,105 Belgium francs equivalent to 6,00,000 US dollars; that in the indent dated 17 -7 -1990, the following terms were stipulated : "(i) Machinery was to be supplied free on board port of shipping in seaworthy packing. All other charges up to the port of loading were to be borne by the petitioner. (ii) An irrevocable letter of credit was to be opened by Punjab Tractors Ltd. for full FOB payment. Payment of commission to Hypoids (India) (P.) Ltd. was to be paid in Indian currency 30 days after the receipt, inspection and acceptance of the material at the works of Punjab Tractors Ltd. (iii) The items ordered were against import licence set out in the indent. Mode of despatch by sea." The order was placed by respondent No. 1 through Hypoids (India) (P.) Ltd. who forwarded the same to the petitioner. The Gleason Works S.A. acknowledged the receipt of the order of the respondent -company. There was a written contract in which there was a cancellation clause which reads as under: "3. Cancellation. - -This contract shall not be subject to cancellation by buyer without the consent in writing of the seller. No such consent will be given where the work is 90 per cent complete or scheduled for completion within 30 days. In all other cases such consent will be granted, if at all, only upon the condition that buyer shall compensate seller for such cancellation by paying to the seller that percentage of the total price of the contract that the work done and raw material or supplies used or for which commitments have been made bears to the total of the contract as the same may be determined by seller."
(3.) THAT the equipment ordered by respondent No. 1 was to be specifically manufactured by the petitioner in accordance with the specifications and indent placed by respondent No. 1 and were to be shipped by the petitioner in June, 1991, FOB port of shipment provided the letter of credit three months before the date of shipment, i.e., 3 -2 -1991, was opened by the respondent -company in favour of the petitioner; that in breach of agreement the letter of credit was not opened by February, 1991, and instead the respondent -company sought various extensions which were agreed to by the petitioner; that on 27 -4 -1992, respondent No. 1 illegally cancelled the said order on the ground that after the placement of the orders, the prices of the machines due to drastic changes in economic policy of the country have increased exorbitantly which makes the operation of the machines for their applications totally uneconomic and unviable for them. Respondent No. 1 showed its inability to pick the machines and cancelled the orders. It is stated in the petition that the machinery was transferred to a warehouse in Antwerp (Belgium); that statutory notices were issued to respondent No. 1 by the petitioner to which reply was received which was vague in nature; that respondent No. 1 was liable to pay 6,00,000 US dollars as damages which comes to be an admitted debt; that respondent No. 1 having failed to make the payment is liable to be wound up.;