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Issues Involved:
1. Creditor's petition for winding-up under section 433(e) read with section 434(1)(a) of the Companies Act, 1956. 2. Dispute over the liability to pay contractual compensation and standard rent. 3. Allegation of the respondent-company's insolvency and being a "bubble" company. Detailed Analysis: 1. Creditor's Petition for Winding-Up: The petitioners, tenants of certain premises, filed a winding-up petition against the respondent-company for non-payment of compensation amounting to Rs. 49,000 from June 1, 1975, to April 30, 1978. The petitioners had previously granted permission to the respondent-company to use and occupy the premises under a leave and licence agreement dated May 8, 1972, for a fixed period of three years, with a monthly compensation of Rs. 1,000 and Rs. 400 per month as commission for services. The respondent-company paid the compensation in advance for the three-year period but failed to pay from June 1, 1975. The petitioners issued a statutory notice under section 434 of the Companies Act, 1956, which the respondent-company denied, citing ongoing declaratory suit and standard rent application in the Court of Small Causes at Bombay. 2. Dispute Over Liability to Pay Contractual Compensation and Standard Rent: The petitioners argued that the respondent-company's contractual liability to pay compensation at Rs. 1,400 per month was evident from the leave and licence agreement. They contended that the application for fixation of standard rent did not nullify this liability, and no interim standard rent had been fixed by the court. The petitioners claimed the respondent-company was a trespasser and demanded compensation at Rs. 75 per day. The respondent-company, however, filed for standard rent fixation, asserting their position as tenants and the applicability of the amended Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which capped licence charges to standard rent levels. The court concluded that a bona fide dispute existed regarding the compensation payable, which was under adjudication before a competent court. 3. Allegation of Insolvency and Being a "Bubble" Company: The petitioners alleged that the respondent-company was insolvent, describing it as a "bubble" company with a paid-up share capital of Rs. 200 and significant carried forward losses and sundry creditors. The respondent-company countered, showing reduced debt and ongoing business operations. The court found no material evidence of the respondent-company's inability to meet its liabilities and deemed the insolvency allegation reckless and unfounded. The court referenced historical cases to highlight the gravity of such allegations and concluded that calling the respondent-company a "bubble" was unjustified. Conclusion: The court determined that both grounds for winding-up under section 433(e) read with section 434(1)(a) and section 433(f) were not well-founded. The petition was deemed an attempt to exert pressure rather than a legitimate claim for winding-up. The petition was dismissed with costs, and the court clarified that its observations were prima facie and would not affect pending proceedings between the parties.
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