PINAKI CHANDRA GHOSH, PRAVENDU NARAYAN SINHA ( 1 ) WE have heard the Learned Senior Advocates on behalf of the parties. ( 2 ) BOTH these appeals and the applications are taken up together by consent of the parties and are disposed of by this common dictated order. ( 3 ) THE appellant challenged the order passed by the Hon'ble Trial Judge on 29-6-2001 and order dated 23-11-2004. ( 4 ) MR. Mukherjee, Learned Senior Advocate appearing on behalf of the company drew our attention to the order dated 29-6-2001 and submitted that the winding up petition was admitted by the said order by His Lordship. He further contended that in the said order dated 29-6-2001, it has been specifically stated that by virtue of a Memorandum of Understanding (hereinafter referred to as 'mou') entered into between the parties on 13-2-2001, the appellant herein would supply software device to the company and the company in turn will pay a sum of Rs. 25 lakhs in cash and Rs. 25 lakhs by way of allotment of shares in the company. In accordance with the Schedule which was entered into between the parties, company also paid a sum of Rs. 2. 74 lakhs leaving a balance of Rs. 22. 26 lakhs. ( 5 ) HE further contended that the software device is a highly precision product and the agreement was entered into between the parties after taking into account the said fact. He also submitted that the performance in respect of MOU was also to be done by the respondents. Mr. Mukherjee further submitted that the Hon'ble Judge could not appreciate the fact that the respondent had failed to comply with their part of the obligation and failed to hand over a complete software programme which was acceptable in the market. He further submitted that Learned Judge has erred by admitting the winding up petition when the petition was appreciated the fact that there was no debt outstanding from the appellants to the respondents. ( 6 ) HE further submitted that it was also the duty of the respondents to act in terms of the MOU including any payment which could not be paid by reason of failure on the part of the respondents to fulfil their part of the obligation. ( 6 ) HE further submitted that it was also the duty of the respondents to act in terms of the MOU including any payment which could not be paid by reason of failure on the part of the respondents to fulfil their part of the obligation. He further contended that the company is a profiteering company and is further a solvent company and should not be wound up. ( 7 ) HE further contended that oh 23-11-2004 the matter was placed before the Hon'ble Court after the advertisement was published. He further contended at that point of time that it was contended before the Hon'ble Judge that there was no other supporting creditor has joined the petitioning creditor and winding up orders so passed by the Hon'ble Court would affect the appeal which was pending before the Court and further it was specifically submitted that although the company has no tangible asset, the same is a running one having work-force working in various units and earning a profit of Rs. 1 lakh per annum. Such fact also to be considered. ( 8 ) HE further drew our attention to the said order and contended that the Hon'ble Judge held that the Court cannot go beyond the order of admission. But in fact the Court has to decide the application after giving a chance to the company to file an affidavit and in this case affidavit was filed before the Hon'ble Judge and even then it was submitted that the company is a profiteering company. The Court held that it is insolvent and according to Mr. Mukherjee, that part of the order is also bad in law. He also relied upon a decision in Maharani Lalila Rajya Lakshmi v. Indian Motor Co. , (Hazaribagh) Ltd. and contended that it is not just and equitable ground to wind up the company when the company is a profiteering company. ( 9 ) ON the contrary, Learned Senior Advocate appearing on behalf of the respondent drew our attention to the agreement entered into between the parties and submitted that it would appear that the appellant would buy out the retail ERE Software Solution developed by the respondents at a mutually agreed price of Rs. 50 lakhs with transfer of all proprietary rights of the software. It was also agreed that 50 per cent of the agreed price (i. e. Rs. 50 lakhs with transfer of all proprietary rights of the software. It was also agreed that 50 per cent of the agreed price (i. e. Rs. 25 lakhs) would be paid to the respondents by way of issue of shares in the appellant company at an agreed price of Rs. 18 per share and balance 50 per cent of the total consideration amount would be paid over a deferred payment plan by the company to the respondents within a period of a year. He further drew our attention to Annexure 'b' to the payment schedule and submitted that from March, 2001 till July, 2002 it was the duty of the company to pay of the said amount. He also submitted that if there is any default on the part of the respondents it was the duty of the company to point it out at very first opportunity. The company did not do so. On the contrary, the company has from time to time paid a sum o! Rs. 2,74,000 leaving a balance sum of Rs. 22,26,000. So far the transfer of shares, we have specifically conceded that part before the Trial Judge and it would be evident from the order that we would take necessary steps in respect of that part of the transaction. So far the debt of the company is concerned, it would appear that Rs. 22,26,000 is due and payable by the company to the respondents. He also drew our attention to the letter addressed by the Advocatc-on-Rccord of the respondents to the appellants on 6-8-2002, just after the last month for the payment in accordance with the agreement and/or MOU entered into between the parties. That was the reminder and whereby it was specifically pointed out that they have failed to make the said amount. Therefore, according to him, debt of the company was ascertained on that date i. e. 6-8-2002. ( 10 ) HE further submitted that the company gave a reply on 28-8-2002 and for the first time stated that the claim of the respondents are baseless. He further pointed out that certain false pretext were taken by the company for such non-payment. Therefore, according to him, debt of the company was ascertained on that date i. e. 6-8-2002. ( 10 ) HE further submitted that the company gave a reply on 28-8-2002 and for the first time stated that the claim of the respondents are baseless. He further pointed out that certain false pretext were taken by the company for such non-payment. He further submitted that subsequently notice was again served on the company on 8-10-2003 for the said payment which was again replied by the company and at last when no payments were made by them on 18-12-2003, company gave a final notice and took steps in the matter by filing this winding up of application. ( 11 ) HE further contended that under Section 433 (e) of the Companies Act, 1956, when the company fails to make payment or where the Court thinks it fit to wind up the company on just and equitable ground, then the Court has a power to wind up the company. He further submitted that the company could not pay the claim of the petitioning creditor. Hence, he further contended that Rs. 1 lakh profit would not make the company as a profiteering company by making a profit of Rs. 8,000 per month which is not a rosy picture. ( 12 ) HE further submitted that the orders so passed by the Hon'ble Trial Judge, are absolutely clear since it has been specifically stated that it would be evident from the order that the Court cannot go beyond the order of admission since the Hon'ble Division Bench in a recent unreported decision in the case of SRC Steel (P.) Ltd. [apot No. 398 of 2004] observed that an order of admission is a final decision on merit. The same view as has been taken by the Hon'ble Division Bench in a subsequent decision in the case of Dhariwal Sleek (P.) Ltd. [t. No. 318 of 2004]. Hence, he submitted that the Hon'ble Judge has no right which is final and binding upon His Lordship. ( 13 ) AFTER hearing the Learned Senior Advocates for the parties since the appeal admitting the winding up petition was also pending before us, we directed Mr. Hence, he submitted that the Hon'ble Judge has no right which is final and binding upon His Lordship. ( 13 ) AFTER hearing the Learned Senior Advocates for the parties since the appeal admitting the winding up petition was also pending before us, we directed Mr. Mukherjee on behalf of the appellants to take instruction whether his client is in a position to secure the claim of the petitioning creditor/respondent by furnishing the bank guarantee and/or the security in favour of registrar, original side to his satisfaction. If such security can be furnished by the company, we can further proceed in the matter. The matter was adjourned thereafter, but when today the matter was appearing for such consideration by Mr. Mukherjee before us, that his client is not in a position to furnish such security. ( 14 ) HOWEVER, we have perused the order passed by the Hon'ble Trial Judge both admitting the winding up petition on 29-6-2001, and thereafter, the order passed by His Lordship. We find that the company/appellant has no tangible asset and further earning of the company as has been submitted before us is only Rs. 1 lakh per annum. In our opinion, the same cannot paint a rosy picture to attract us. We feel that the submission of Mr. Mukherjee to that extent, cannot create a mark in our opinion. We do not find that the Hon'ble Trial Judge either in the trial of admission of the winding up application, failed to find out 'debt' or there is any reason before us to interfere with the said orders. In our opinion, such 'debt' of the company is an indisputable debt and we respectively agreed to the findings of the Hon'ble Trial Judge and accordingly, we do not find any reason to interfere with the order of admission so passed by the Hon'ble Trial Judge. Then we feel that a chance is to be given to the company to contest the claim of the petitioning creditor and accordingly, we feel that it would be proper to direct the company to furnish a bank guarantee and / or security to the tune of Rs. 20 lakhs to the satisfaction of the Registrar, Original Side within a period of 4 (four) weeks from date and claim of the petitioning creditor, respondent herein, arc relegated to a suit on such consideration condition. 20 lakhs to the satisfaction of the Registrar, Original Side within a period of 4 (four) weeks from date and claim of the petitioning creditor, respondent herein, arc relegated to a suit on such consideration condition. However, we make it clear that if the said bank guarantee and/or security is furnished to the satisfaction of the Registrar, Original Side to the tune of Rs. 20 lakhs, the petitioning creditor/respondents herein, shall file a suit concerning the claims mentioned in the winding up petition, within a period of 4 (lour) weeks thereafter. ( 15 ) IN default of furnishing of such bank guarantee to secure the claim as directed hereinabove the Official Liquidator shall proceed in the matter forthwith. The Official Liquidator is directed to stay their hands for 4 (four) weeks from date. ( 16 ) BOTH the appeals and the application arc disposed of on the above terms. All undertakings given by the appellants are discharged.