1. ' SALMAN HAMID, J.---This petition for winding up of respondents under section 305 of the Companies Ordinance, 1984, has been filed by the petitioners on the ground that the respondents have failed to re-pay a sum of Rs,1,700,000 that was invested by them in terms of Memorandum of Understanding dated 6-5-2007 for a Joint Venture pursuant to the establishment of the company, namely, Twins Engineering (Pvt.) Limited (TEL) under Agreement of Sale dated 3-11-2007, entered into between the petitioners and the respondents' two Directors namely Messrs Arshad Ali Khan and Shoaib Nasim Khan and for recovery of unpaid remunerations amounting to Rs,1,680,000 C Rs,40,000 each per mensem w,e,f, May, 2007 till July, 2009 of the two Directors of TEL/petitioners who were inducted as such at the time of incorporation of TEL. It was urged that for recovery of these dues, a mandatory notice under section 306 of the Companies Ordinance, 1984 was served on the respondents but in vain. Therefore, present petition for winding up of the respondents.
2. ' Vehemently refuting the above position, the respondents by way of defence asserted that no case for winding up has been made out and that there is a serious dispute with regard to the amounts claimed by the petitioners. It was argued that prior to the Memorandum of Understanding dated 6- 5-2007, Agreement of Sale of the plot dated 3-11-2007 was reached between the parties, of which the petitioners were owners, whereby among others, it was agreed that the total sale consideration of the plot was Rs,20 million, out of which Rs,2 million was received by the petitioners as earnest money and that the balance sale consideration was agreed to be paid upon execution of the sale- deed thereof and that such execution was not forthcoming and other disputes also arose, Suit No,674 of 2009 for specific performance of the contract, permanent injunction and damages against the petitioners is pending adjudication before the original side of this court. It was further argued that in terms of Memorandum of Understanding the joint venture was formed, under which the petitioner only paid an amount of Rs,1.7 million (now claimed under the petition) whereas they were to invest Rs,12,334,006. As against such a meagre investment of the petitioners, the respondents' two Directors had invested an amount of Rs,2.7 million each and that besides such investment of the two Directors of the respondents, an amount of Rs,8.2 million was also invested by other two Directors of the respondent/Company namely Mr. Maratab Ali and Mr. Fawwad Nasim Khan besides investment of proposed Director for TEL namely Mr. Muhammad Umer Habib. It was pointed out that such heavy investment wa3 made by the referred persons in TEL upon a clear understanding, reached between the petitioners and respondents' two Directors that such persons would be inducted as new Directors on equal sharing basis in TEL. A resolution dated 8-4-2008 was also passed in such regard. It was further urged that the winding up order of the respondents cannot be passed as it is a running company and doing business for the last about more than two decades. The respondents further argued that in terms of the Agreement of Sale dated 3-11-2006, the respondents have also invested heavily in TEL, details of which were mentioned in paragraph 12 of the objections/written statement, filed by the respondents.
3. Since section 305 of the Companies Ordinance, 1984 envisages the various grounds for winding up of a company, the petitioners in their wisdom chose to file the present petition under clause (e) of section 305 which says that a company may be wound up by the Court, if the company is unable to pay its debts. While exercising the discretion for passing an order of A winding up of a company, the court, as stipulated in clause (h) of the referred section 305 has to act justly and equitably. In order to see and/or explore whether it would be just and equitable for a court to pass a winding up order, numerous circumstances have to be looked into before such a harsh order is passed.
4. ' In the case in hand I am of the view that these are the petitioners who have violated the terms of the Sale Agreement and the Memorandum of Understanding and the Joint Venture arrangement and have attempted to do things indirectly which were not permissible for them to do directly. The respondents' Directors having made huge investments and the fact that the suit for specific performance of the contract is pending before the original side of this court, it would not be just and equitable if the respondents are ordered to be wound up, more particularly when the grounds for such winding up are also not clearly available to the petitioners.
5. ' The events those were narrated by the respective counsel and came forth before this court would show that the company which is sought to be wound up by the petitioners has hardly any role to play and the entire claim of the petitioners hinges on Memorandum of Understanding dated 6-5- 2007, which stipulates various things to be done on either end, which in fact in letter and spirit had been followed by the Directors of the respondents-Company. In the petition itself, the petitioners have stated that it was under this Memorandum of Understanding that they had invested an amount of Rs,1.7 Million in a company which came into existence pursuant to the Sale Agreement dated 3-11-2006 i,e, TEL. It was under the same Memorandum of Understanding that the respondents' two Directors and other three persons had also invested heavily in TEL. Such heavy investment having been made and the newly incorporated company i,e, TEL also doing business, being a running concern cannot be ordered to be wound up just because the two sets of Directors of the same Company are at variance.
6. It is well-settled by now that there is a distinction between unable to pay debts and unwilling to pay debts. In the present case the respondents' Directors, for the various reasons mentioned above not only are unwilling to pay the alleged debts but altogether have disputed the existence of debts.
7. As a matter of fact the Directors of the respondents, claim otherwise. They say that under the terms of Memorandum of Understanding petitioners were to invest Rs,12,334,006 and as against this investment, only an amount of Rs,1.7 million was made whereas the respondents have invested far more than Rs,1.7 million.
8. ' For such reasons, the winding up of respondents, as sought by the petitioners is declined and the petition is dismissed with cost of Rs,35,000.