1963 (9) TMI 31 - HC - Companies Law

Summary

Issues:
1. Petition for compulsory winding up by a creditor based on non-payment of dues.
2. Claim of unpaid remuneration by the petitioner as a managing director.
3. Company's inability to pay its debts as a ground for winding up.

Detailed Analysis:
1. The petitioner, a creditor of the company, filed a petition seeking compulsory winding up due to non-payment of dues. The petitioner claimed a sum of Rs. 26,400 for services rendered as the managing director of the company. The company failed to comply with the demand despite a notice of demand issued on October 31, 1960. Additionally, the petitioner asserted that the company was unable to pay its debts, leading to the winding-up petition.

2. The petitioner, who was the managing director of the company until August 6, 1959, claimed unpaid remuneration from July 1, 1958, to the date of his resignation. The petitioner argued that he was entitled to draw a monthly remuneration of Rs. 2,000 as per the articles of association. The company's balance sheet for the year 1958-59 showed a debit of Rs. 24,000 as payable to the petitioner as remuneration. The company contended that the petitioner had waived his right to remuneration, but the court found no evidence to support this claim. The company also argued that the petitioner's claim became time-barred by the time the winding-up petition was filed.

3. The company contended that the petitioner's claim for unpaid remuneration was time-barred and that the company's liabilities exceeded its assets as per the affidavit of the Registrar. However, the court noted that having liabilities exceeding assets does not necessarily imply the inability to pay debts. Without further evidence demonstrating the company's incapacity to meet its obligations, the court found the second ground for a winding-up order unsubstantiated.

In conclusion, the court dismissed the petition for compulsory winding up, citing lack of evidence to support the company's inability to pay its debts and the time-barred nature of the petitioner's claim for unpaid remuneration.