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Issues:
- Stay of further proceedings in the winding-up petition due to a pending criminal case against the managing director of the respondent company. Analysis: The petitioner filed a winding-up petition against the respondent company, alleging insolvency and failure to pay debts amounting to Rs. 6,11,715.65. The respondent company, instead of replying to the show-cause notice, filed applications seeking a stay of proceedings citing a criminal case against the managing director for an offense under section 420 of the Indian Penal Code. The respondent argued that responding to the show-cause notice could prejudice their case in the criminal court. The petitioner contended that the criminal case was against the director individually and not the company, and the causes of action were distinct. The respondent sought a stay based on the premise that the criminal complaint against the managing director, related to the same hundis mentioned in the petition, warranted a halt in the winding-up proceedings. However, the petitioner argued that the criminal case was against the director personally, not the company, and the causes of action differed between the two matters. The petitioner highlighted that the Companies Act allows for punishment of company officers for offenses under the Act, emphasizing the separation between the company's liability and the director's individual liability. After considering the arguments and case law, the judge concluded that the applications for a stay were unfounded. The judge noted the distinction between the relief sought in the winding-up petition against the company and the criminal case against the director individually. The judge found no basis to halt the winding-up proceedings due to the criminal case against the director. The judge dismissed the applications and directed the respondent company to respond to the show-cause notice by a specified date. In summary, the court rejected the request to stay the winding-up proceedings based on the pending criminal case against the managing director, as the causes of action and reliefs sought in the two matters were distinct, with the criminal case focusing on individual liability separate from the company's obligations.
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