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Issues Involved:
1. Whether a company can re-agitate the merits of the claim at the post-admission stage of a creditor's winding-up petition. 2. Whether the company can offer to furnish security at the post-advertisement stage and seek a direction that the claim be relegated to a suit. Summary: Issue 1: Re-agitation of Merits at Post-Admission Stage The primary question was whether a company can re-agitate the merits of the claim and contest the same at the post-admission stage of a creditor's winding-up petition. The court held that a company cannot, at the post-advertisement stage, disturb or unsettle the finality of a finding as to the indisputable nature of a debt rendered at the admission stage of a creditor's winding-up petition. The judgments in both Khaitan Paper and SRC Steel instruct thus. SRC Steel lays down that even though the decision at the admission stage is final as between the company and the petitioning-creditor, others connected with the company who come in after advertisements may question the finding and the court may not feel constrained that it is bound by the finding. The judgment in Khaitan Paper is restricted only to the finality of the issue as between the company and the petitioning-creditor. Issue 2: Offering Security at Post-Advertisement Stage The ancillary issue was whether the company can offer to furnish security at the post-advertisement stage and seek a direction that the claim be relegated to a suit. The court concluded that it is no longer open to the company to offer security or for the court to accept it. Security is offered or directed to be furnished where the adjudication as to the claim is not immediately made and the adjudication is postponed till a regular action in furtherance of the claim is brought by the petitioning creditor. Once a creditor's winding-up petition is admitted, the adjudication of the claim must necessarily have been made and the debt found to be due and owing to the creditor. In such a situation there is no question of any security being furnished since the security is invariably in respect of an unassessed claim, but upon a creditor's winding-up petition being admitted in this court the assessment would already have been made upholding all or a part of the claim. Conclusion: The company, Baljit Securities Ltd., is directed to be wound up in accordance with the provisions of the Companies Act, 1956. The official liquidator shall take possession and control of all books, records, assets, documents, and transactions of the company now in liquidation. The petitioner will cause a gist of this order to be published in the same newspapers where the petition had been advertised. The order of winding-up will not take effect if the company immediately pays off the entire amount owing from it to the petitioner in terms of the order of admission. The company has a second chance to ward off its liquidation since no other creditor of the company has applied at the post-advertisement stage when the matter has assumed a representative capacity.
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