Dosangh v Balendran – Just and Equitable Winding Up

Just and Equitable Winding Up – When No Other Remedy Is Available

From around 2011, Parminder Singh Dosanjh (also known as Peter) and Vallipuram Balendran (also known as Victor) ran a property business together. It started as a limited liability partnership, Webb Estate Management LLP, holding eight or nine properties around England.

In February 2018, the business was moved into a limited company, Webb Estate Developments Limited (“the Company”). The properties transferred across with it. By the time of trial, Dosanjh estimated the properties were worth about £6,850,000. Balendran, who had initially thought they were worth less, had come round to broadly the same figure.

Balendran did most of the hands-on work. He was retired, and had told Dosanjh at one point that “time is all I have”. Dosanjh had other business interests and was not involved in day-to-day management. He offered more than once to take on half the property management himself but Balendran always declined.

For more information on this case, please read Dosangh v Balendran & Anor [2025] EWHC 507 (Ch)

The £7,000 Question

Both men drew £6,000 a month from the LLP, later rising to £7,000 each from the Company. The trouble was nobody had agreed what these payments actually were.

Dosanjh said they were repayments of loans he and Balendran had made to the company. Balendran said they were reimbursement of “expenses”. Under the original LLP partnership agreement, no partner was entitled to be paid for their work at all, only reimbursed for genuine expenses. The company’s articles said something similar: directors could only be paid if remuneration was properly agreed by the board.

The dispute over how to label these payments meant the accounts for the year ending July 2019 could never be signed off. In November 2020, Dosanjh filed a set of accounts himself, falsely stating they had been approved by the board. Balendran did much the same in May 2022, filing his own amended accounts, also falsely claimed to be board-approved.

Chasing an Agreement and a Suspicious Invoice

In March 2020, during a scramble to file the LLP’s final accounts before a deadline, Dosanjh pushed Balendran for a clear answer on how the £7,000 payments should be treated. After some back-and-forth, Balendran sent a short email agreeing they should be treated as loan repayments. He later claimed he had only been questioning the request, not agreeing to it, a claim the judge firmly rejected.

Months later, in July 2020, with the company’s own accounts now due, Balendran changed his position. He emailed the accountants an invoice, purportedly from his own services company, TRS Windmill Limited, billing the company £70,500 for “asset management” and “service management” work. The invoice was dated 2 July 2019. The court later established, from the document’s own metadata, that it had actually been created on 24 July 2020, just six minutes before Balendran emailed it. No such services had ever really been invoiced at the time.

Dosangh v Balendran - Just and Equitable Winding Up

Dosanjh refused to accept the invoice and threatened to report the matter to HMRC as potential fraud. In November 2020, he asked Balendran to stop taking the monthly payments altogether. Balendran refused, and instead instructed a different firm of accountants, giving them a one-sided account of the dispute that led them to unsurprisingly back his position.

The Aldwych House Sale

Trust broke down further over a company property called Aldwych House, an office block in Andover. In February 2022, Balendran told Dosanjh a buyer had offered £830,000 for the building, with a side arrangement to buy Dosanjh’s shares in the company too. Only when pressed did Balendran reveal the buyer was H&B Services London Limited, a company in which Balendran himself held a 50% stake.

It later emerged that H&B had already instructed architects to draw up plans to convert the building into flats, months before this was disclosed to Dosanjh. A later valuation suggested planning permission alone could add £80,000 to the property’s value. Dosanjh pulled out of the sale once he learned the full picture. Balendran’s response was not to acknowledge the conflict of interest, but to demand compensation for H&B’s wasted planning costs.

Attempts to Split Up

The two men did try to find a way out. In late 2021, they jointly instructed accountants to review the payments dispute, and a restructuring adviser, who proposed splitting the company’s assets into two new companies under a formal demerger, with Lloyds Bank’s support. Balendran appeared to agree at first. Then, once Lloyds confirmed it would support the plan, he abruptly pulled back, telling the bank a demerger would be a disaster for the company.

By 2024, matters had deteriorated further. Lloyds refused to refinance the company’s borrowing and formally demanded repayment of a £970,055 loan. The company faced unpaid rates liability orders on Aldwych House, a tenant dispute at another property in Croydon, and lapsed planning permission on a third site in Croydon caused by Balendran blocking development work. Balendran wrote to the bank at one point claiming he had taken control of the company temporarily.

The Petition

On 18 August 2023, Dosanjh petitioned the court to wind up the company on the “just and equitable” ground under section 122(1)(g) of the Insolvency Act 1986. He pointed to the breakdown in trust, the fabricated invoice, Balendran’s unilateral attempts to sack the accountants, the concealed conflict of interest over Aldwych House, and the repeated failure to agree a way of splitting the business.

Balendran’s defence accepted that the company was a “quasi-partnership”, that trust and confidence had broken down, and that there would be a substantial surplus for shareholders on a winding up. But he argued the breakdown was mainly Dosanjh’s fault, that Dosanjh had come to court with “unclean hands” by filing unapproved accounts, and that winding up would cause him serious financial hardship when cheaper alternatives such as a share buyout were available.

The Judgment

ICC Judge Mullen handed down judgment on 7 March 2025. He found Dosanjh honest, but Balendran evasive and unwilling to accept any view but his own. He held the £7,000 payments were not genuine expenses, that Balendran had in fact agreed by email to treat them as loan repayments, and that the TRS invoice was fabricated after the fact to disguise this.

On the law, a company can be wound up on the “just and equitable” ground where there is either functional deadlock or, in a quasi-partnership, an irretrievable breakdown of trust and confidence. Even where both sides share some blame. Winding up is a last resort, but only if some other remedy is actually available and it would be unreasonable not to pursue it.

The judge found both grounds satisfied here. The accounts remained unresolved, and Balendran’s concealed conflict of interest over Aldwych House would alone have destroyed the relationship. Dosanjh’s unauthorised filing of accounts did not bar him from relief, since it was a reasonable response to Balendran’s refusal to accept the truth about the invoice. No real alternative to winding up existed as Dosanjh didn’t want to buy Balendran out, Balendran’s own buyout offers had been unrealistic, and a late post-trial proposal was likely to lead to further disputes. The suggestion that Dosanjh was misusing the petition as pressure tactics was also rejected.

Webb Estate Developments Limited was ordered to be wound up by the court.