SEVERN TRENT WATER PURIFICATION, INC. versus CHLORO CONTROLS (INDIA) PRIVATE LTD. & ANR.

Citation: [2008] 2 S.C.R. 1127 · Decided: 18-02-2008 · Supreme Court of India · Bench: C.K. THAKKER · Disposal: Disposed off
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Judgment (excerpt)

[2008] 2 S.C.R. 1127 
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SEVERN TRENT WATER PURIFICATION, INC. 
A 
II. 
CHLORO CONTROLS (INDIA) PRIVATE LTD. & ANR. 
(Civil Appeal No. 1351 of 2008) 
FEBRUARY 18, 2008 
B 
'r 
(C.K. THAKKER AND TARUN CHATTERJEE, JJ.) 
Companies Act, 1996; Ss.425, 430, 431, 432, 433(1) and 
439: 
Winding up petition - A foreign company and an Indian c. 
company setting up a Joint Venture company - Joint Venture 
Agreement - Indian company filing a suit against the foreign 
company circumventing dispute resolution provision in the 
agreement - Dead Jock in management of Joint Venture -
Termination of agreement and filing of winding up petition by D 
> ,.. 
appellant-foreign company - Allowed by Company Judge 
holding it to be maintainable - Filing of appeals by constituent 
company-Partly allowedby Division Bench of the High Court 
as not maintainable as 'contributory' but remitting the matter 
to Company Judge on question of maintainability of the 
E 
petition on ground of-capacity of appellant company as creditor 
-Appeal.and cross appeal- Held: S.439 of the Act couched 
in positive as· well as negative words - Sub-section (1) of 
Section 439 permitting all the persons, as enlisted, to file 
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petition for winding up of the company- However, sub-section 
F 
(4) of Section 439 declares that a contributory cannot file such 
petition unless shares in respect of which he is contributing 
have been originally allotted to him or held by him and 
registered in his name or devolved on him through former 
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holder after his death - Since appellant-foreign company did G 
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not put forth its claim under provisions of clause (a) of s. 439( 4 ), 
it could only make such claim in terms of clause (b) of s.439(4) 
- Since appellant company not registered in the Register of 
the company, it is not entitled to file the winding up petition -
1127 
H 
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1128 
SUPREME COURT REPORTS 
[2008] 2 S.C.R. 
A Division Bench of the High Court rightly held that the phrase :f 
"have devolved on him through the death of the holder' in part 
(iii) of section 439(4) would apply to natural person and not to 
juristic person where death normally refers to seizing a life of 
natural person -Provision uls.439(4) exhaustive in nature and 
B its sweep cannot be extended by judicial interpretation -
Hence, winding up petition by appellant-company in its 
capacity as contributory not maintainable. 
y
Maintainability of the winding up petition in the capacity 
of the appellant as Creditor - Held: In terms of the decision of 
c Division Bench of. the High Court, appellant could raise 
contention before the Company Judge as to maintainability 
of the petition in the capacity as a creditor and also on the 
ground of premature advertisement. 
D 
Words and Phrases: 
'Have devolved on him' and 'death' - Meaning of in the 
.., .
context of s.439 (4) of the Companies Act, 1956. 
Appellant, formerly known as Capital Control 
E (Delaware) Company, was organized and existing under 
the, laws of the State of Pennsylvania, USA. Later, it 
acquired another company, namely, Capital Controls 
Company, Inc. Both the companies amalgamated. 
Appellant-company alleged that it is entitled to the rights 
F 
and benefits of both the companies, so amalgamated and 
also to file and maintain the company petition against 
y 
respondents. Respondent No.1 is an Indian company 
controlled by one 'K' and Capital Controls (Delaware) 
Company, Inc. is one of the constituent companies of the 
appellant. They set up a joint venture company with 
G Capital Controls India Private Limited with the object of 
manufacturing in India and distributing within the 
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geographical boundaries of India and neighboring 
countries certain gas chlorination water treatment 
systems and a single product line of brine electro 
H chlorination system from component parts supplied by 
t 
SEVERN TRENT WATER PURI., INC. v. CHLORO 
1129 
CONTROLS (I) P. LTD. & ANR. 
the appellant company. In pursuance thereof, a Joint A 
Venture Agreement was executed by the parties. Appellant 
company holds 50% equity shares of the equity share 
capital of the joint company, remaining 50% of the shares 
were held by respondent No.1. Respondent-company filed 
a suit against the appellant-company with the sole object B 
of circumventing the dispute resolution provisions in the 
Joint Venture Agreement entered into between the parties. 
Due to wrongful stand and intransigence of the 
respondent-company, there was total deadlock on the 
management
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