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Issues:
Winding-up petition based on inability to pay debts under Companies Act, adjournment application by company for compromise with creditors, relevance of previous judgment on adjournment in winding-up cases, distinction in facts between present case and previous judgment, consideration of company's attempt to settle with creditors, impact of secured creditor's sale on unsecured creditors, granting of adjournment by the court. Analysis: The High Court of Bombay heard a winding-up petition against a company based on its inability to pay debts under the Companies Act, 1956. The petitioning creditor had a claim of Rs. 11,350 for plumbing work done in the company's factory. The company applied for an adjournment to reach a compromise with its creditors, which was opposed by the petitioners. The court considered a previous judgment where an adjournment was overturned in similar circumstances, emphasizing that each case must depend on its own facts. The court noted distinctions between the present case and the previous judgment, especially regarding the size of the petitioners' claim compared to the total liabilities of the company. The court highlighted that the company's adjournment request aimed to settle with creditors through a compromise or arrangement, not to pay in full. The court considered the company's proposal feasible, given the interests of large creditors in financing the company to recover their investments. The court also noted the company's willingness to refrain from disposing of assets during the adjournment period and to convene a creditors' meeting as specified by the court. The court found that granting an adjournment for settlement negotiations would benefit both the company and creditors as a whole, distinguishing the present case from the previous judgment. Regarding concerns raised about a secured creditor selling the company's assets, the court held that the sale would not affect unsecured creditors, and it was the secured creditor's decision to proceed with the sale. The court stated that the possibility of persuading the secured creditor to halt the sale should not influence the decision on granting an adjournment. Ultimately, the court granted an adjournment until a specified date, subject to the company's undertakings not to deal with assets and to call a creditors' meeting within a set timeframe. The court also ordered the company to pay the petitioner's costs for the adjournment.
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