Judgment :- 1. C.P. No. 184 of 2001 has been filed by M/s. Motorola India Ltd., a company incorporated under the Indian Companies Act, 1956, under Section 434 (e) read with Section 434 of The Companies Act, 1956, praying this Court to order winding up of the respondent, M/s. BPL Mobile Cellular Ltd., having its registered office at BPL Centre, No. 1045-1046, Avinashi Road, Coimbatore, to appoint Official Liquidator to act as Provisional Liquidator of the respondent company and for other consequential reliefs. 2. C.P. No. 185 of 2001 has been filed by M/s. Motorola Inc., a Corporation incorporated under the laws of State of Delaware, United States of America, under Section 434 (e) read with Section 434 of The Companies Act, 1956, praying this Court to wind up M/s. BPL Mobile Cellular Ltd., having its registered office at BPL Centre, No. 1045-1046, Avinashi Road, Coimbatore, to appoint Official Liquidator to act as Provisional Liquidator of the respondent company and for other consequential reliefs. 3. Both the Company Petitions were presented on 3.8.2001 and taken on file on 3.8.2001. This Court ordered notice regarding admission on 3.8.2001. 4. Pending the Company Petitions, interim applications were moved and they were taken up for consideration and disposed of. Other pending company applications are also taken up together with these Company Petitions and common order is passed. 5. On behalf of the petitioner in both the Company Petitions, Mr. Ariyama Sundaram, learned Senior Counsel, Ms. Nalini Chidambaram, learned Senior Counsel and Mr. P. Chidambaram, learned Senior Counsel appeared and made their submissions on different dates in continuation. On behalf of the respondent in both the Company Petitions, Mr. Aravind P. Datar, learned Senior Counsel made his submissions. With the consent of counsel for either side, the main Company Petitions were taken up and substantial arguments were advanced in the two winding up petitions. 6. It is admitted on either side that it would be sufficient to refer to the facts in any one of the Company Petitions and as the facts in the other petition are practically identical, it is not necessary to refer to the facts in the second Company Petition as the contentions are identical and the difference, if any, is only in respect of the figures or the amount claimed and certain dates. 7. 7. At the outset, it is essential to set out that very many contentions were advanced by the learned senior counsel appearing on either side and hair splitting and hair tilting arguments were advanced overlooking the fact that the jurisdiction of the company court is summary and this Court on the facts of the case has to decide as to whether the respondent-company in both the Company Petitions is unable to pay its debts and, whether they are liable to be wound up. If this Court, on the facts of the case arrive at a finding that the respondent is sound, there are disputes between the parties with respect to the claims and counter claims, in respect of the contract entered between them, and if the dispute is held to be bona fide, and that the respondent-company is a profit making company employing hundreds of workmen directly and indirectly serving the public by paying a huge licence fee to Government of India, then this Court may turn down the request of the petitioner in both the Company Petitions. In that case, it is for the petitioner to work out their remedies elsewhere. 8. It is settled law that while examining identical petitions filed under Section 433 (e) of the Companies Act, 1956 on the ground that the respondent-company is unable to pay its debts, this Court has to follow the tests well laid down by the Apex Court. Though number of pronouncements have been cited at the bar on either side, in the considered view of this Court it would be sufficient to refer to two of the pronouncements of the Apex Court, which will be sufficient to decide these two Company Petitions. 9. In Madhusudan Gohardandas & Co. v. Madhu Woollen Industries Pvt. Ltd. reported in 1971 (3) SCC 632 , the Apex Court held thus:— “20. Two rules are well settled. First, if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. See London and Paris Banking Corporation (1874) LR 19 Eq 444). The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. See London and Paris Banking Corporation (1874) LR 19 Eq 444). Again, a petition for winding up by a creditor who claimed payme nt of an agreed sum for work done for the company when the company contended that the work had not been properly was not allowed. See Re. Brighton Club and Horfold Hotel Co. Ltd., (1865) 35 Beav 204, 21. Where the debt is undisputed the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay that particular debt, see Re. A Company (94 SJ 369) Where however there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of the debt is disputed the court will make a winding up order without requiring the creditor to quantify the debt precisely see Re. Tweeds Garages Ltd., (1962 Ch 406). The principles which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends. 22. Another rule which the court follows is that if there is opposition to the making of the winding up order by the creditors the court will consider their wishes and may decline to make the winding up order. Under section 557 of the Companies Act, 1956 in all maters relating to the winding up of the company the court may ascertain the wishes of the creditors. The wishes of the shareholders are also considered though perhaps the court may attach greater weight to the views of the creditors. Under section 557 of the Companies Act, 1956 in all maters relating to the winding up of the company the court may ascertain the wishes of the creditors. The wishes of the shareholders are also considered though perhaps the court may attach greater weight to the views of the creditors. The law on this point is stated in Palmers Company Law, 21st Edition, page 742 as follows: “This right to a winding up order is, however, qualified by another rule, viz., that the court will regard the wishes of the majority in value of the creditors, and if, for some good reason, they object to a winding up order, the court in its discretion may refuse the order”. The wishes of the creditors will however be tested by the court on the grounds as to whether the case of the persons opposing the winding up is reasonable; secondly, whether there are matters which should be inquired into and investigated if a winding up order is made. It is also well settled that a winding up order will not be made on a creditors petition if it would not benefit him or the companys creditors generally. The grounds furnished by the creditors opposing the winding up will have an important bearing on the reasonableness of the case, see Re. P. and J Wacrae Ltd. , (1961) 1 AER 302. 29. It is beyond dispute that the machinery for windingup will not be allowed to be utilised merely as a means for realising its debts due from a company. In Amalgamated Commercial Traders (P) Ltd. v. A.C.K. Krishnaswami this Court quoted with approval the following passage from Buckley on the Companies Acts, (13th Edn., p. 451): “It is well-settled that a winding-up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding-up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the court”. 11. A petition presented ostensibly for a winding-up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the court”. 11. Pradeshiya Industrial & Investment Corporation of U.P. v. North India Petrochemicals Ltd. & another reported in 1994 (3) SCC 348 , the Apex Court, while assigning reasons to set aside the orders passed by the Division Bench of the High Court also held as follows: “a) Every aspect of the dispute has to be noticed and no aspect shall be overlooked; b) Where there is a debt and the company has neglected or is unable to pay; c) Where the claim is the subject matter of any other proceeding such as Arbitration or adjudication before any other forum; d) Where there is a prima facie dispute or not as to the debt; e) Where the defence raised is substantial one and not mere moonshine; f) The admission of the winding up petition is fraught with serious consequence as far as the company is concerned; and the likes.” 12. Though a number of pronouncements following the above two pronouncements or other pronouncements highlighting various other dimension arising out of those dictas are pointed out and relied upon by either side, this Court do not propose to multiply the authorities cited by either side and make this order long winding. This Court has to refer to the summary of the facts as set out in one of the Company Petitions and the respective counter before taking up the contentions for consideration as well as considering the material documents relied upon by either side. 13. Let me not also lose sight of the ruling of the Apex Court in Haryana Telecom Ltd. v. Sterlite Industries Ltd. reported in 1999 (5) SCC 688 where it is held that claim in a petition for winding up is not for money, but the winding up is sought for on the ground that the company has become commercially insolvent and, therefore, it deserves to be wound up. The winding up petition, therefore, is not for recovery of money due or enforcement of a sum claimed to be due. 14. The winding up petition, therefore, is not for recovery of money due or enforcement of a sum claimed to be due. 14. In C.P. No. 184 of 2001, according to the Indian company, Motorola India Ltd., the respondent was granted a licence by the Department of Telecommunication to operate cellular telephone system in the States of Maharashtra and Kerala Circles of India. The respondent company entered into an arrangement with the petitioner for supply of service and equipments. The petitioner company rendered service and supplied diverse quantity of goods/equipments for cellular infrastructure between 1998 and March 2001. Towards the said supply and services, the respondent, as on 14.12.1998 owe a sum of Rs. 432 lakhs. When demanded, the respondent requested time to liquidate and also forwarded a proposal giving the schedule of payments. Since the petitioner and M/s. Motorola Inc. insisted liquidation of the dues, the respondent, in retaliation raised frivolous counter claims/disputes. 15. Again on 18.6.1999, the petitioner called upon the respondent to discharge the outstanding amount. By letter dated 25.6.1999, the respondent, while acknowledging the sum of Rs. 16,98,96,318/= forwarded a payment schedule agreeing to pay Rs. 5 Crores by Nov. 1999 and, thereafter, Rs. 10 Crores by Dec. 1999 and Rs. 7 Crores by end of January 2000. The respondent committed itself to discharge the liability in various instalments. Once again on 2.9.99, while acknowledging the liability, the respondent forwarded a fresh proposal, while stating that it had to divert the funds to pay the licence fee and assured payment to the petitioner. After acknowledging the liability, the respondent raised false and frivolous claims alleging delays in supplies, delay and deficiency in the supplies. 16. After making allegations of delays and deficiencies and putting forward counter claims, the respondent, by letter dated 25.5.2000 unconditionally withdrew all the claims made by it by its letters dated 19.3.1999, 20.3.1999, 25.3.1999 and 7.9.1999. Despite such assurances, the respondent not only neglected, but also failed to clear the outstanding dues to the petitioner. On 15.3.2001, a statement of outstanding dues was drawn up and as per the statement, the respondent is liable to pay Rs. 231,201,763/= and all assurances made by the respondent was not kept up. The Managing Director of the respondent-company in a telephonic discussion with Mr. Pramod Saxena, General Manager and Executive Director of the petitioner company, assured payments and offered to forward a proposal. 17. 231,201,763/= and all assurances made by the respondent was not kept up. The Managing Director of the respondent-company in a telephonic discussion with Mr. Pramod Saxena, General Manager and Executive Director of the petitioner company, assured payments and offered to forward a proposal. 17. Even according to the reconciliation statement of accounts sent by the respondent as on 31.3.2001, the respondent had admitted the outstandings in a sum of Rs. 153,400,326/-. Yet the respondent was not coming forward to liquidate the debt and substantial amount remains unpaid. On 17.3.2001 the respondent acknowledged the interest invoices and replied that it has shown a sum of Rs. 8,76,16,659.35 towards services and interest invoices is yet to be accounted. Despite acknowledgement and confirmation of liability and despite repeated assurances, the respondent failed to pay the sum of Rs. 241,016,985.35. 18. The petitioner caused a notice under Section 433 read with Section 434 of The Companies Act on 6.6.01. To the said notice the respondent notwithstanding its earlier admission and acknowledgement of liability sent a mischievous reply containing false and frivolous disputes over the delivery schedule and the alleged faulty equipment, which disputes were earlier raised but withdrawn by letter dated 25.5.2000. 19. According to the petitioner, the respondent has suffered huge losses and it is unable to pay its debts. The balance sheets of the respondent company for the years 1997 and 1999 show that the respondent had incurred huge losses and the petitioner has been shown as one of the sundry creditors. 20. It is further stated by the petitioner that the respondent is likely to dispose of its assets in the guise of merger and restructuring to avoid discharge of liabilities as seen from reports appearing in the daily “Times of India” dated 28.6.2001 by entering into a memorandum of understanding to merge its cellular operations with Birla and AT & T. Similar reports also appeared in the daily “Business World”. The respondent is indebted in a huge sum of Rs. 1800 Crores with a capitalised loss of Rs. 1000 C rores. The defence of the respondent company as set out in the reply is sham and a false defence and it is merely moonshine to avoid payment. According to the petitioner, the respondent is in arrears to the sum of Rs. 177,939,687.35 towards principal and Rs. 63,077,298/= towards interest, in all aggregating to Rs. 241,016,285.35 with future interest. 1000 C rores. The defence of the respondent company as set out in the reply is sham and a false defence and it is merely moonshine to avoid payment. According to the petitioner, the respondent is in arrears to the sum of Rs. 177,939,687.35 towards principal and Rs. 63,077,298/= towards interest, in all aggregating to Rs. 241,016,285.35 with future interest. Hence, the present Company Petition. 21. In C.P. No. 185 of 2001, Motorola Inc., an USA based company has filed the Company Petition on the ground that the respondent is unable to pay its debts. According to this petitioner, the petitioner supplied diverse quantities of equipments for cellular operations between 1998 and March 2001 of substantial quantities as detailed in the invoice. As of January 1999, the respondent is due USD $54,95,436.08 towards GSM Project Phase-II supplies. The respondent requested time to make payment. At the request of the respondent, the petitioner agreed to reschedule the payments. By letter dated 22.1.1999, the respondent intimated the petitioner that it had applied to RBI in respect of payments for supplies made in Phase-II. 22. Since the petitioner insisted for payment, the respondent raised disputes, which are frivolous and false by its letters dated 19.3.1999, 20.3.1999 and 25.3.1999. After further demand, the respondent by letter dated 25.6.1999, while acknowledging the huge outstanding amounts, forwarded a payment schedule, whereby the respondent agreed to pay the outstanding amount in instalments. Again on 2.9.1999 the respondent acknowledged the liability and stated that it had intended to pay a minimum sum of Rs. 30 lakhs and a further sum as set out in the reply. Again on 2.2.2000, the respondent informed Motorola India Ltd., a subsidiary of Motorola Inc., that it intended to pay Rs. 52,62,976.27 by 20.2.2000 and the respondent requested the petitioner to send extension letter since formalities with the RBI to secure permission has to be complied with. 23. On 25.5.2000, the respondent expressly withdrew all the claims made by it by its letters dated 19.3.1999, 20.3.1999, 25.3.1999 and 7.9.1999 and confirmed the balance payable by it to the petitioner. The respondent assured payments, but ultimately failed to remit the outstandings even on the dates, on which it assured to remit. There has been various exchange of correspondence between the parties and the respondent, while acknowledging the interest invoices and acknowledged the liability of USD $86,06,068.78. The respondent assured payments, but ultimately failed to remit the outstandings even on the dates, on which it assured to remit. There has been various exchange of correspondence between the parties and the respondent, while acknowledging the interest invoices and acknowledged the liability of USD $86,06,068.78. The respondent failed and neglected and, therefore, the petitioner issued a statutory notice on 6.8.2001. The respondent sent a mischievous reply disputing the liability and raised false and frivolous disputes over alleged delay in the delivery schedules. The respondent has suffered a huge loss and it is unable to pay its debts. In the list of sundry creditors shown in the balance sheet, the liability to the petitioner finds place. 24. The respondent is negotiating to dispose of its business to avoid payment of debts. The respondent is indebted in a huge sum of Rs. 1800 Crores, besides it has suffered a loss of Rs. 1000 Crores. The dispute raised by the respondent is false and there are no bona fides and it is a mere moonshine. The respondent is in arrears to the extent of USD $1,73,82,038.44 towards principal and USD $14,54,030.34 towards interest as on 31.3.2001, besides liability to pay future interest. Hence, the present Company Petition seeking to wind up the respondent company. 25. The respondent filed identical counter and raised identical objections in both the Company Petitions contending that the petitioner did not keep the schedule of supply of equipments and as a result of which the respondent suffered substantial losses, that the respondent has filed a counter claim and the respondent is not liable to pay the amount claimed. A long winding counter has been filed alleging default on the part of the petitioners in effecting supplies, such delayed supplies are also defective and sub-standard resulting in huge losses to the respondent. It is further stated by the respondent that several defective items were not rectified or replaced by the petitioner apart from there being delay, which is inordinate, resulting in huge losses and damages to the respondent. The respondent has relied upon number of documents to establish the contemporaneous complaint made by the respondent regarding such delays and they are incorrect and defective supplies. 26. The petitioner had been repeatedly promising to remit the same, but miserably failed to fulfill its requirements resulting in severe losses and damage to the respondent. The respondent has relied upon number of documents to establish the contemporaneous complaint made by the respondent regarding such delays and they are incorrect and defective supplies. 26. The petitioner had been repeatedly promising to remit the same, but miserably failed to fulfill its requirements resulting in severe losses and damage to the respondent. The respondent highlighted the details of losses and damages in the notice dated 23.6.2001 and 19.7.2001 sent through its counsel. The plea that the dispute is not bona fide or frivolous or sham or a moonshine is not correct. The respondent also made a counter claim for losses, which will far exceed the amount claimed by the petitioner in both the Company Petitions. 27. It is further stated that the contract between the parties provide for arbitration, which is binding on either side and the respondent had already invoked Article 34 of the Equipment Supply Contract and had commenced arbitration process by filing a request for arbitration on 3.8.2001 with the Secretariat for the International Court of Arbitration at Geneva and the said request for arbitration has been acknowledged. In the light of the said arbitration proceedings, where the respondent is making a counter claim, which is far in excess of the value of equipments and services and, therefore, no amount is due to the petitioner in both the Company Petitions and the petitions are liable to be dismissed. The present Company Petition is a ploy to extract certain other commercial considerations from the respondent and its affiliated companies in the garb of a winding up petition. The respondent has placed orders with other companies, who are competitors to the petitioner, namely, Nortel Networks and Nokia Networks OY and the present petitions are a measure of commercial retaliation on the part of the petitioners to settle commercial scores. 28. To the statutory notice the respondent sent a suitable reply. The present Company Petition is an attempt to armtwist the respondent into withdrawing certain material claims that the respondent has against the petitioner and only with a view to harass the respondent and its affiliates, in the telecommunication industry, the present Company Petitions have been filed. The respondent has been throughout complaining to the petitioner regarding the delays, short/incorrect supplies, defective goods, etc., and the petitioners have also admitted their defaults and even promised to set right their defaults, which they have miserably failed. The respondent has been throughout complaining to the petitioner regarding the delays, short/incorrect supplies, defective goods, etc., and the petitioners have also admitted their defaults and even promised to set right their defaults, which they have miserably failed. Despite poor quality, the respondent continue to purchase the equipments as it has given a fixed time schedule for roll-out of its network to maintain as undertaken to the Department of Telecommunications. 29. The respondent further states that it has entered into annual maintenance contract with the petitioners from time to time and paying substantial amount in the region of Rs. 9 Crores annually to Motorola India Ltd. Only as a pressure tactic and to coerce the respondent into withdrawing its claims, the petitioner threatened to cease the maintenance of equipments as no one will come forward to maintain the equipments supplied by the petitioners exclusively. The replacement of parts have to be made by the petitioner only and only at the threat of withdrawal of maintenance support coupled with the assurance of prompt action to set right the deficiencies in the equipments, the petitioner compelled the respondent to pass on the letter dated 25.5.2000 withdrawing its claims detailed in letters dated 19.3.99, 20.3.99, 25.3.99 and 7.9.99. Such withdrawal is conditional upon the petitioner taking immediate remedial action in respect of the deficiencies in the equipments, but the petitioner miserably failed. The petitioner had not come before this Court with clean hands and the dispute raised by the respondent is bona fide and it is neither a sham nor a moonshine dispute. 30. The respondent has invested a sum exceeding Rs. 2000 Crores in this business of which Rs. 900 Crores has been raised as a share holding contribution and a sum of Rs. 1100 Crores as loans from Banks and Financial Institutions. The respondents project was appraised and only thereafter the financial institutions have advanced substantial money for the respondents project cost since the experts have opined that the project is viable and it has the profit earning capacity. 31. It is further stated that the respondent is poised to achieve substantial growth and substantial profits in the near future and its position would improve after the inclusion of reputed names such as Tatas, Birlas along with AT & T in the consolidated new entity. 31. It is further stated that the respondent is poised to achieve substantial growth and substantial profits in the near future and its position would improve after the inclusion of reputed names such as Tatas, Birlas along with AT & T in the consolidated new entity. If the petitioners argument that the respondent needs to be wound up without due regard to the debt equity ratio, it is to be extended to its logical conclusion and most cellular operators in the country would have to be wound up and virtually the entire cellular network throughout India would be brought to a standstill. There has been consistent improvement in the performance of the respondent company in the form of consistent growth in the subscriber base, which has resulted in a commensurate revenue earnings of the respondent over the last 2-1/2 years. 32. The total number of subscribers have increased from 96,490 in April 1999 to 3,90,647 during April 2001. The defence raised is not sham nor it is a moonshine. According to the respondent no amount is payable by the respondent to the petitioner and there is no debt at all, much less, a failure and neglect to pay as alleged. There is a bona fide dispute regarding the petitioners claim and the petitions deserve to be dismissed. The respondent is entitled to the amount claimed by it by way of counter claim, which is substantial and it is the petitioner, who owes a larger amount to the respondent than sought to be claimed by the petitioner. If the respondent is ordered to be wound up, the entire subscriber base of the respondent will be denied of telecommunication services and innumerable persons, who are directly or indirectly engaged by the respondent, will be thrown out of their engagement resulting in gross and irreparable harm not only to the public, but also to several hundreds of persons. 33. A reply has been filed by the petitioners in both the Company Petition reiterating the respective stands already detailed in the Company Petition and it is not necessary to refer to the replies and rejoinders. 34. In both the Company Petitions, the following points arise for consideration: — “i) Whether the amount outstanding as claimed by the petitioner in each Company Petition is admitted or not? ii) Whether the respondent is estopped from denying the liability already admitted and acknowledged? 34. In both the Company Petitions, the following points arise for consideration: — “i) Whether the amount outstanding as claimed by the petitioner in each Company Petition is admitted or not? ii) Whether the respondent is estopped from denying the liability already admitted and acknowledged? iii) Whether the respondent in both the Company Petition could persist in its counter claim towards damages or loss after having given up the same and plea of counter claim is a valid defence to the claim of the petitioner? iv) Whether the petitioner in each of the Company Petition has made out a prima facie case to proceed further by admitting the Company Petition and ordering publication? v) Whether the respondent could be put on terms after admission and before ordering publication? vi) To what relief, if any?” 35. Detailed arguments were advanced on either side and in the considered view of this Court, for the present Company Petitions, it is not necessary to set out all those contentions or arguments, which were hair splitting and hair tilting and the points raised in these two Company Petitions could be decided on broad facts for the limited purpose of these Company Petitions. 36. Under various acknowledgements, confirmation letters written from time to time and in the counter, the respondent in both the Company Petitions admitted its liabilities towards the value of supplies of equipments and services rendered practically there is no quarrel with respect to the amount claimed by the petitioner, which liability is admitted by the respondent in both the Company Petitions. The amount is not in dispute, so also the amount outstanding as claimed by the petitioner in both the Company Petitions is not in dispute. 37. In fact when the petitioner called upon the respondent to produce its balance sheets for the relevant years and also furnished the full details of schedule relating to sundry creditors, Mr. Aravind P. Datar as well as Mr. Murari, appearing for the respondent admitted that the petitioner in each of the Company Petitions is shown as a sundry debtor in the respondents audited balance sheet to the very amount claimed by the petitioners. 38. In other words, the petitioners name is shown as a sundry creditor for the amount claimed by the petitioner in the audited balance sheet of the respondent company as approved by its Board of Directors. 38. In other words, the petitioners name is shown as a sundry creditor for the amount claimed by the petitioner in the audited balance sheet of the respondent company as approved by its Board of Directors. Therefore, the first point has to be answered in favour of the petitioner in both the Company Petitions. Therefore, the plea of estoppel advanced against the respondents also deserves to be sustained. In fact, further arguments were advanced only on the basis that the respondent admits its liabilities to the two petitioners in the sum as claimed by the petitioners as outstanding. The plea or defence of counter claim is only plea or answer, which the respondent raised in both the Company Petitions. 39. The substantial contention being that the equipments and supplies made by the petitioner as well as services rendered are defective and as a result of which the respondent has sustained huge losses. It is further pointed out that the petitioner did not keep up the schedules and, therefore, the respondent could not complete the project, which has resulted in substantial loss to the respondent-company and for which the petitioner in each of the Company Petition is liable to make good the loss. It is also the further plea of the respondent that it had already given a notice intimating the dispute and appointing an Arbitrator in terms of the stipulation contained in the agreement. 40. According to the respondent, counter claim made by the respondent by way of loss and damages against the petitioners is many times more than the amount claimed by the petitioner in each of the Company Petition and, therefore, no amount is due or outstanding or payable by the respondent to the petitioner and, therefore, the Company Petition is not maintainable. Though various other incidental points have been raised, the respondent has been harping upon this plea or defence to contend that it is not liable to pay any amount and it is the petitioner in both the Company Petition, who are liable to pay substantial amount towards loss sustained and damages suffered by the respondent. 41. The counsel on either side took the Court through the correspondence exchanged between the parties. According to respondents, a perusal of the correspondence relied upon by it would show that there has been admitted delay in the supplies of equipment by the petitioner and so also in the service. 41. The counsel on either side took the Court through the correspondence exchanged between the parties. According to respondents, a perusal of the correspondence relied upon by it would show that there has been admitted delay in the supplies of equipment by the petitioner and so also in the service. Apart from the delay, as pointed out by the respondent, the very petitioner company, through their letters, not only admitted the delay, but also the defect or deficiency in the equipment, etc., supplied by them, so also in the service and the petitioner had assured to rectify the same, which defect or shortage or delay, the petitioner in both the Company Petitions have miserably failed to rectify or set right and as a result of which the respondent has to engage the service of other companies like Nortel Networks and Nokia Networks OY paying huge amounts and it sustained loss not only due to delay, but also due to deficiency and shortage and sub-standard equipments, had serious set back on the project of the respondent company. 42. This plea of the respondent in both the petitions cannot be brushed aside as totally baseless or groundless or as an afterthought, since the petitioner companies in their correspondence have admitted the defects, deficiencies, shortage and delay. Even assuming so, whether such a plea could be sustained on the merits of the case is the question to be examined. 43. The respondent by its letters dated 19.3.99, 20.3.99, 25.3.99 and 7.9.99 and various other letters relied upon the admitted deficiencies or shortages or failures or delays. But having put forward such a claim in the innumerable letters and in particular those four letters, admittedly closely following the said letters, on 25.5.2000 the respondent had with full knowledge withdrew all the claims made by it against the petitioners and in particular the claims detailed in its letters dated 19.3.1999, 20.3.99, 25.3.99 and 7.9.99. 44. Having given up the claims and exonerated the respondent from its liability towards damages or loss sustained, it is rather too late in the day and it is not open to the petitioner to repeat the same as a defence or a counter claim. Hence, the plea of estoppel raised by petitioner in both the petitions deserve to be sustained. 45. Hence, the plea of estoppel raised by petitioner in both the petitions deserve to be sustained. 45. The respondent had admittedly withdrawn the claims, which was made prior to 25.5.2000 against the petitioner in both the Company Petitions. The letter dated 25.5.2000 and the subsequent letters makes all the difference and this Court is unable to sustain the plea of the respondent about the counter claim after the respondent having given up all its claims detailed by its letter dated 25.5.2000. It is not open to the respondent to revive the earlier claims for the alleged deficiencies once over after having given up the same. 46. The withdrawal letters are fatal to the respondents plea of counter claim. The counter claim, for the limited purpose of the Company Petition, in my considered view, will not constitute a valid defence, namely, the respondent does not owe any money and it is the petitioner who owes large sum to the respondent. 47. There is no dispute about the respondent writing the letter dated 25.5.2000. The letter, which is fatal to the respondents plea was admittedly written by the respondent addressed to the petitioner, which reads thus:— “25th May, 2000 Mr. Sunil Kulkarni Area Operations Manager Motorola India Limited Cellular Infrastructure Division 33 A, Ulsoor Road Bangalore. Dear Sunil Subject: WITHDRAWAL OF ALL CLAIMS MADE ON MOTOROLA. Reference: Our letters dated Sept. 7, 1999, March 19, 20 & 25th, 1999. We hereby inform you that we are withdrawing all the claims we made on you as per these letters. Thank you very much for your support and co-operation. Thanking you, Sincerely, for BPL Cellular Limited S. Balagopal Head - Commercial & Logistics.” 48. In the reconciliation statement forwarded by the respondent to the petitioner, Motorola Inc., dated 31.3.2001, the respondent had admitted the outstanding of USD $10,99,656.43. Again on 17.5.2001, the respondent had admitted the liability and the letter reads thus: “Motorola Inc. 1501 W, Shure Drive Arlington Heights Illinois IL 600 04 United States. We refer to our statement of reconciliation wherein we have shown the amount $14,54,030.34 towards interest invoices raised by Motorola Inc. and yet to be accounted by us. This is due & payable to Motorola Inc. For BPL Cellular Ltd. Authorised Signatory”. 49. 1501 W, Shure Drive Arlington Heights Illinois IL 600 04 United States. We refer to our statement of reconciliation wherein we have shown the amount $14,54,030.34 towards interest invoices raised by Motorola Inc. and yet to be accounted by us. This is due & payable to Motorola Inc. For BPL Cellular Ltd. Authorised Signatory”. 49. Even prior to the counter claims detailed in various letters, the respondent admitted its liability as seen from the letters dated 11.1.1999, 25.6.99, 2.9.99, 2.2.2000 and other letters. On 22.1.99, the respondent intimated the petitioner that it has applied to RBI for permission to pay for the supplies made in Phase-II and in respect of approval of documentation of supplies made in Phase-III. 50. On 25.6.99, the respondent addressed the Executive Director of Motorola India Ltd., the petitioner, wherein the respondent admitted the liability and sent a proposal and proposed a program of payment, which reads thus: — Mr. Pramod Saxena Executive Director and General Manager Motorola India Limited New Delhi. Dear Mr. Saxena Sub: GSM Phase 2, 3 and Microwave Backbone Payment Schedules. This is with reference to the various communications we had on this subject with our Managing Director and other team members, we propose the payment program. 1. We would be releasing the dollar and INR payments of GSM phase 2, 3 and Microwave Backbone as per the payment program given below: GSM Phase 2 USD 5,262,966 By October 1999 GSM Phase 3 USD 4,741,364 By October 1999 MWBB USD 7,480,588 By end Nov. 1999 Services INR 16,98,96,318 5 Cr. by Nov. 1999 10 Cr.by Dec. 1999 7 Cr. by end Jan. 2000 2. We agree to pay INR 25 lakhs to be 10th July 99 towards part payments of supervisory charges for GSM Phase 2 & 3 and interest on delayed payments as per Financial and Security Agreement for services. We will pay INR 30 lakhs in August 99 and INR 35 lakhs in September 99 and we will start paying INR 50 lakhs per month for these charges from Oct. 99 onwards. 3. Motorola will release immediately the shipment of goods relating to Y2K requirements after the receipt of July 99 payments and also resume the Microwave Backbone implementation services in Maharashtra. 4. We will pay US$ 83,000 towards M Cell Arena Macro shipment and 10% advance (US$ 30,000) in August 99 toward shipment of balance BTS expansion orders. 5. 99 onwards. 3. Motorola will release immediately the shipment of goods relating to Y2K requirements after the receipt of July 99 payments and also resume the Microwave Backbone implementation services in Maharashtra. 4. We will pay US$ 83,000 towards M Cell Arena Macro shipment and 10% advance (US$ 30,000) in August 99 toward shipment of balance BTS expansion orders. 5. Upon this, Motorola will hand over M Cell Arena Macro and will also ship immediately the balance BTS payments. Thanking you Sincerely yours for BPL Cellular Limited S. Balagopal Head-Commercial 51. On 2.9.99 also the respondent again addressed Motorola India Ltd., acknowledging the liability and assured it that it will release payments towards supplies. The said letter reads thus: September 2, 1999 Motorola India Limited “The Senate” No. 33A, Ulsoor Road Bangalore 560 042. Dear Sirs, We realise that there have been certain delays in settling the current outstanding of around US$ 17 million and outstanding in respect of services and local supplies. We had intended to pay a minimum of Rs. 30 lakhs and upto Rs. 1 Crore in August 1999 for which the necessary fund were mobilised. Unfortunately due to unexpected turn of events we had to divert money to payment of licence fees of Rs. 15 Crores which had to be paid by August 15, 1999, failing which our licence would have been revoked. While we are making efforts to pay the local technical services outstanding in monthly instalments from our monthly revenue, it may not be possible to do so for the US$ outstanding till we obtain financial closure which is expected by Jan. 2000. We would release payments in instalments of Rs. 309 lakhs per month minimum starting from 30th September 99 towards outstanding in respect of Services, local supplies, supervisory charges and interest on delayed payments and enhance the amount based on our cash flows. We will also release US$ 83,000 towards payment of Mcellarenamacro by September 1st, 1999. 52. Even on 30.5.2001, the respondent admitted the liability to the petitioner Motorola Inc., with reference to the statements respectively dated 24.1.2001 and 3.12.2000. In the letters dated 17.5.2001, addressed to the petitioner, the respondent has admitted the liability despite the earlier withdrawal of all claims, is fatal to the respondents plea. 53. 52. Even on 30.5.2001, the respondent admitted the liability to the petitioner Motorola Inc., with reference to the statements respectively dated 24.1.2001 and 3.12.2000. In the letters dated 17.5.2001, addressed to the petitioner, the respondent has admitted the liability despite the earlier withdrawal of all claims, is fatal to the respondents plea. 53. Identically, the respondent sent a schedule to the petitioner to repay the outstandings on three different occasions and failed to keep up the Schedule-I, Schedule-II and the last schedule also, which the respondent proposed, had not been kept. In other words, the respondent had never kept its assurance and it has come forward with a novel explanation as an afterthought. 54. So far as the other Company Petition is concerned, not only identical acknowledgements of liability have been admitted, but even the respondent has given a “satisfaction” certificate in respect of equipments supplied and services rendered. After having made such representation, the respondent had given three different schedules to discharge the liability, which the respondent had failed to keep up. The counsel for the petitioner rightly relied upon the acceptance certificate sent by the respondent with respect to site acceptance as well as equipment acceptance, etc. 55. On 14.2.1998, the respondent, while acknowledging the liability had given a schedule of payment of the outstanding sum of Rs. 325 lakhs as seen from its letter dated 14.10.1998. Even in the reconciliation of account, the respondent admitted its liability. 56. Once again on 25.6.1999, after acknowledging the outstanding, the petitioner had set out the schedule of repayments and assured payments. That apart the respondent expressed acknowledgement of quality of equipments supplied, which reads thus: — “For the Attention of: Mr. G. Cartia Italtel Mr. S. Balagopal BPL Reference: Andrew two piece reflectors Andrew are able to offer two piece reflectors for antenna sizes 2.4 m and larger. The standard and optional antenna configurations are shown in the table below. Antenna Size Standard Optional 2.4 m One piece Two piece 3.0 m One piece Two piece 3.7 m Two piece One piece 4.5 m Two piece N/A 2-piece reflector configurations allow a significant reduction in shipping volume and transportation costs, but require slightly more time for Antenna assembly and installation. Installation is straightforward, but approximately 20-40 minutes extra time should be allowed to assemble a 2 piece reflector. Installation is straightforward, but approximately 20-40 minutes extra time should be allowed to assemble a 2 piece reflector. Each reflector is serialised at the factory to ensure only machine halves are supplied together. The two reflector halves fit exactly to each other using alignment shoulder bolts, precision drilled at the factory. Each reflector pair are also assembled in the factory and the surface tolerance measured to ensure no deformation of the reflector surface has occurred during the splitting operation. If assembly is carried out to the attached instructions, there will be no degradation of the antenna performance when compared with an equivalent 1 piece reflector, this applies to all antenna types including high cross polar HSX types at 7 GHz. Andrew supply many hundreds of two piece reflectors every year. I hope this assures you of the suitability of two piece reflectors, however should you require further information do not hesitate to call. Yours sincerely, Sandy Fraser Market Development Manager TMW Systems, Europe.” 57. So also on 2.9.99 the respondent assured to release payments of Rs. 30 lakhs per month starting from 30.9.99 onwards. As late as 31.3.2001 the respondent company sent a reconciliation statement, wherein it has acknowledged the outstanding due and payable by it. On 17.5.2001 also the respondent by its letter acknowledged the liability of Rs. 8,76,16,659.35 towards service and interest with reference to invoice raised by Motorola India Ltd., and confirmed the outstandings. So also on 17.5.2001, the respondent had acknowledged the outstanding and admitted the liability, while confirming reconciliation of accounts. 58. A perusal of the above correspondence, particularly the letter written by the very respondent in both the Company Petitions, which letters are admitted by the respondent would show that the respondent had not only confirmed and acknowledged the outstanding to the petitioner company in the Company Petitions, but also withdrawn its claims in toto against the petitioner in each of the Company Petition and as late as May 2001, acknowledged its liability of outstanding. Not once or twice, but on three occasions the respondent had given three different schedule of payments, which it could not keep up. Not once or twice, but on three occasions the respondent had given three different schedule of payments, which it could not keep up. On a consideration of the entire facts it is clear and it is only for the limited purpose of these Company Petitions, the plea of counter claim has been put forward as an afterthought and it is not a bona fide one, but it is a moonshine. 59. Though Mr. Aravind P. Datar and Mr. Murari took pains and argued and contended that the dispute raised is bona fide, and that the same cannot be gone into in a winding up petition, on a prima facie reading of the admitted letters written by the respondent addressed to the petitioner in both the Company Petitions, this Court holds that there are absolutely no bona fides in the dispute, which is sought to be revived or resurrected belatedly after having given up the dispute and counter claims and after having admitted the liability on various dates and after having given a schedule of payments to discharge the said admitted liabilities. 60. Absolutely there are no bona fides in the plea of the respondent that there is a dispute. As pointed out, the dispute is not a bona fide dispute as by repeated letters, the respondent admitted the entire claim and this would show that the respondents counter claim or defence or objections to the present Company Petitions is definitely not bona fide, but it is a clear moonshine, trotted out to delay the proceedings. 61. Merely because the respondent had initiated action for arbitration by sending a reference and nominating an Arbitrator, liability does not cease nor get extinguished. The Company Petition is not for recovery of any substantiated amount and the arbitration proceeding is definitely not for winding up and in this respect we shall not lose sight of the pronouncement of the Apex Court in Haryana Telecom Ltd. v. Sterlite Industries Ltd. , reported in 1999 (5) SCC 688 . 62. As regards the financial condition of the respondent-company, voluminous materials have been placed by the petitioner to show that the respondent has suffered a substantial loss and it is highly indebted heavily not only both to the petitioner, but also various banks and financing institutions. Substantial amounts are admittedly due. 62. As regards the financial condition of the respondent-company, voluminous materials have been placed by the petitioner to show that the respondent has suffered a substantial loss and it is highly indebted heavily not only both to the petitioner, but also various banks and financing institutions. Substantial amounts are admittedly due. A perusal of the typed set of papers would show that number of bills of exchange remains unpaid and the respondent sought for time and requested the payees to represent the bills of exchange and they are for substantial sum. 63. The respondent has been seeking time even in respect of admitted bills and bills of exchanges for substantial sums as seen from its letters dated 26.3.1990, 30.3.90, 7.4.99, 22.4.99, 23.4.99, 31.5.99 and 10.6.99 and amounts for which the bills of exchange has been raised are for substantial sums. Very many bills are even due to Motorola India Ltd., which remains unpaid and the respondent requested for representation of the bills on later dates. Those bills relate to other supplies and services as well. At no point of time the respondent had paid the bills of exchange, according to the petitioner. Even according to the balance sheet, the respondent company is highly indebted and it is commercial inability had led to the present position. 64. Much could be said against the respondent with respect to its inability to pay and it is a clear case of inability on the part of the respondent to pay. The inability alone had prevented the respondent to seek for postponing of bills or to raise farse of defence or claims or counter claims. 65. Though Mr. Aravind P. Datar and Mr. Murari contended that the letters withdrawing the claims were handed over under peculiar or special circumstances, that if such letters were not given, the respondent will stop the supply and the current maintenance contracts, which were in currency, this explanation, though attractive, cannot be sustained. The respondent is neither a novice nor it could claim that it is not acquainted with the commercial activities. The respondent has got number of offices, financial experts, legal Assistants, Chartered Accountants in their services and, therefore, they cannot say that the letter has been extracted from them. The conduct of the respondent from time to time belie the very plea. The respondent has got number of offices, financial experts, legal Assistants, Chartered Accountants in their services and, therefore, they cannot say that the letter has been extracted from them. The conduct of the respondent from time to time belie the very plea. It is not the case of the respondent that the withdrawal letters were extracted by force or coercion. Without any reservation, the respondent has withdrawn the claims not once, but more than twice and the respondent is, therefore, estopped by conduct to put forward such a counter claim. 66. The commercial inability is obvious as the respondent is highly indebted to a substantial sum even as seen from its balance sheet. The details set out in the above Company Petition in this respect, though controverted, as a matter of fact, it is clear that the respondent is unable to pay its debts and that is the reason, which had prompted the respondent to raise all untenable claims or pleas after having withdrawn its claims. Such a conduct on the part of the respondent, a business house, cannot be appreciated. The inability has been established and the petitioner in both the Company Petitions has made out not only a prima facie case, but also sustained its case and the plea of respondent is not bona fide and it is a clear moonshine. 67. The next point that should engage the attention of this Court is whether still this Court should proceed further and order publication, which may result in serious consequences and may even throw out respondent company out of gear from its current functioning resulting in grinding halt. 68. Though Mr. Murari pointed out that the present Company Petitions are an attempt to armtwist the respondent and also defeat the respondents move to amalgamate with other leading companies in India, this Court is unable to appreciate the same and it cannot be countenanced. It could even be stated that it is out of frustration. 69. Yet it is to be pointed out concedingly too, the respondent is carrying on the project and rendering cellular service in the State of Tamil Nadu, Kerala and Maharashtra and it has also established the business of serving lakhs and lakhs of customers. It could even be stated that it is out of frustration. 69. Yet it is to be pointed out concedingly too, the respondent is carrying on the project and rendering cellular service in the State of Tamil Nadu, Kerala and Maharashtra and it has also established the business of serving lakhs and lakhs of customers. The respondent has invested substantial amount running to thousands of crores in the cellular business by creating a large infrastructure as well as base stations, transmission and receiving centres, clusters and at this stage, if this Court proceeds further and orders publication, not only the interest of the respondent companys share holders will suffer, but also that of the public who utilise the cellular services running to several lakhs in the said States will suffer. So also the thousands of employees whether directly or indirectly engaged in the cellular service in the three States will be thrown out of employment and the cellular service will go haywire. This is in fact a public service as a large section of the public are using cellular phones. Therefore, this is not a fit case where this Court would be justified in proceeding further and ordering publication, straightway without reference to the consequences and ruination of the respondent and its projects. 70. The petitioner is also paying around Rs. 10 Crores every year to the respondent towards maintenance contract and there is no default in this respect and the petitioners are also making regular profit in their business. It is also admitted that the respondent has placed substantial orders and payments are being made. That apart, the respondent had remitted substantial sum to Government of India towards licencee fee and this is one of the reasons attempted by respondent. 71. Further, there is every chance of the respondent company turning around the corner shortly or in the recent future and discharge its liabilities including that of the petitioner in both the Company Petitions as the cellular business has picked up considerably. From 90,000 subscribers it has increased to around Four lakhs. The learned counsel for the respondent had also given the revenue collections from the subscribers so far, which also would show that the business of the respondent is improving day by day. From 90,000 subscribers it has increased to around Four lakhs. The learned counsel for the respondent had also given the revenue collections from the subscribers so far, which also would show that the business of the respondent is improving day by day. If at this stage the respondents cellular operations are interfered or strangled, the same would not only result in derailing of the entire cellular project undertaken by the respondent, but also will cause economic loss to the society and deprivation of cellular facilities to lakhs and lakhs of customers in the three States. The respondent has also paid substantial sum as licence fees to the Government of India for getting licence and the investment on the part of the respondent on various base stations, clusters or transmitters, etc., which are substantial will also be rendered a total loss or waste. By proceeding further or publishing the Company Petitions also, the petitioner may not be in a position to recover the amounts due to the petitioner. But at the same time the respondent will not be justified in using the petitioners equipment without making payment of its value and allowing the respondent to enrich itself by day-to-day earnings by utilising the petitioners supply of modern machinery and equipments. 72. In the circumstances, taking into consideration of the totality of the circumstances, investment so far made, public services rendered and improved business, this Court is of the considered view that it will not be justified in ordering publication without reference to consequences. Instead this Court would be justified in giving sufficient opportunity to the respondent to enable itself to come out of its present financial position and also at the same time earn and pay the petitioners in such instalments, which will lead to discharge of petitioners liability. 73. The only and better course would be to enable the respondent to continue the cellular service, earn and discharge the liability it owes to the petitioner in both the Company Petition in reasonable instalments. Any other move or approach or order would be catastrophic to all the activities resulting in totai destruction of the respondents project and cellular service. 74. The only and better course would be to enable the respondent to continue the cellular service, earn and discharge the liability it owes to the petitioner in both the Company Petition in reasonable instalments. Any other move or approach or order would be catastrophic to all the activities resulting in totai destruction of the respondents project and cellular service. 74. It is made clear that any observation or discussions with respect to the claim or counter claim of the petitioner and respondent in each Company Petition is for the limited purpose of deciding these Company Petitions and the same shall not be in any manner affect the respondents proposed arbitration nor it is conclusive since the dispute between the parties has to be decided in the arbitration proceedings by the Arbitrators by examining the respective cases and deciding the dispute raised by the parties. 75. In the result, while following the pronouncements of the Apex Court reported in Madhusudhan Gohardhandas & Co. v. Madhu Woollen Industries reported in 1971 (3) SCC 632 and Pradeshiya Industrial & Investment Corporation of U.P. v. North India Petrochemicals Ltd. , reported in 1994 (3) SCC 348 and while holding that the petitioner in each of the Company Petitions has made out a prima facie case for admission of their Company Petition, this Court admits the two Company Petitions, but direct that the publication of the Company Petition shall be deferred until further orders, while directing the respondent to liquidate the outstandings due to the petitioner in each of the Company Petitions at least as per the conditions imposed hereunder. The following conditional orders are passed: “i) ADMIT C.P. NOS. 184 and 185 of 2001; ii) The respondent in C.P. No. 184 of 2001 is directed to deposit Rs. 5,50,00,000/= (Rupees Five Crores Fifty Lakhs only) to the credit of C.P. No. 184 of 2001 within two months from today; iii) The respondent in C.P. No. 185 of 2001 is directed to deposit Rs. 184 and 185 of 2001; ii) The respondent in C.P. No. 184 of 2001 is directed to deposit Rs. 5,50,00,000/= (Rupees Five Crores Fifty Lakhs only) to the credit of C.P. No. 184 of 2001 within two months from today; iii) The respondent in C.P. No. 185 of 2001 is directed to deposit Rs. 10,00,00,000/= (Rupees Ten Crores only) to the credit of C.P. No. 185 of 2001 within two months from today; iv) After deposit of the said sum, the respondent in both the Company Petition shall deposit the balance of the outstanding as claimed by the petitioner in the respective Company Petitions to the credit of the respective Company Petitions in ten equal bimonthly instalments with intimation to the petitioner in the respective Company Petitions; v) The amounts directed to be deposited by the respondent to the credit of the respective Company Petitions shall be kept in deposit to the credit of the Company Petitions as the respondent has already initiated arbitration proceedings, or until this Court modifies the directions; vi) Failing compliance of conditions (i), (ii), (iii), viz., either first payment or any one of the subsequent instalments by the respondent till the outstanding is wiped out, the petitioner will be entitled to move this Court for publication of the Company Petition and for further consequential orders leading to winding up.”