9911796707
TMI Blog1983 (5) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... y consumed and for water supply. On May 2, 1979, the company paid a sum of Rs. 7,000 by cheque being the rent for the month of May, 1979, but the company defaulted from the month of February, 1981, in payment of rent and as a result, a total sum of Rs. 1,36,000 representing rent payable for the period February, 1981, to June, 1982, exclusive of interest and a further sum of Rs. 48,000 representing occupier's shares of taxes, Rs. 2,000 representing charges for water supply and electricity consumed, charges aggregating to a sum of Rs. 1,86,000 became due and payable. As a result, the petitioner filed an ejectment suit against the company being Title Suit No. 85 of 1981 before the Alipore Court and prayed for a decree for ejectment, damages, perpetual injunction, costs, etc . The company filed an application in the said suit under the provisions of section 17(2)( a ) and ( b ) of the West Bengal Premises Tenancy Act wherein the company admitted that it was not in a position to pay all the arrears of rent at a time inasmuch as the company was running at a loss and passing through financial stringency and wished to pay only a sum of Rs. 1,000 per month, that is, the company desired to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner creditor also belatedly filed the petition for winding up which was affirmed in July, 1982, but not filed till January, 1983. Under the circumstances, the company asserted that the petitioning creditor was guilty of inordinate delay. As a result no order should be passed on this application. From the facts and circumstances of this case, it appeared that the company was unable to pay the lawful dues of the landlord and in fact admitted in a legal proceeding before a court of law its inability to pay the arrears of rent at a time and prayed for payment by monthly instalments of a paltry sum of Rs. 1,000. It is admitted that the company did not comply with its statutory obligation of filing the audited balance-sheet since 1976. The learned Alipore court is competent to entertain and/or try the title suit filed by the petitioning creditor for eviction on the ground of non-payment of rent as also it had been alleged that the company had been storing combustible and other inflammable articles in the demised premises and for other reasons the company was entitled to vacate possession inasmuch as on those grounds the tenancy created in favour of the company had been terminate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has provided for the stay of a suit against the company when there is a winding-up order against the company. If the Legislature had intended that on account of the fact that a suit or proceeding has been filed in another court, the court in seisin of the winding-up application will stay that proceeding on that ground alone, there would have been a provision to that effect in the Companies Act. There is no such provision, the reason being that a winding-up proceeding is not merely for the benefit of the petitioner but of all shareholders, creditors or contributories of the company. Therefore, winding-up proceedings could not be stayed merely because the creditor has filed a suit against the company." In the case, Pandam Tea Co. Ltd. v. Darjeeling Commercial Co. Ltd. [1977] 47 Comp. Cas. 15 (Cal.), it had been held by a Division Bench of this court (headnote) : "The respondent, after issuing a notice to the appellant-company under section 434 of the Companies Act, 1956, filed a petition for winding up the appellant-company. The appellant-company instituted a suit in the Darjeeling court and in that suit an injunction was issued restraining the respondent from 'proceeding i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existent, the petitioning creditor is entitled to prove by other evidence that the company was unable to pay its debts. Indebtedness can be proved aliunde. The learned lawyer appearing on behalf of the petitioning creditor relied on 78 CWN 248 and made his submission as to what amounted to a disputed debt. He also craved reference to the case, Nathoo Lal v. Durga Prasad, AIR 1954 SC 355, and submitted, relying on the case, Registrar of Companies v. S. Sohanmull Golcha P. Ltd. [1972] 42 Comp. Cas. 386 (Raj.), that the company was commercially insolvent. Mrs. U. B. Mukherjee appeared on behalf of the company and relied on the case, Bukhtiarpur Bihar Light Railway Co. Ltd. v. Union of India, AIR 1954 Cal 499 ; [1954] 24 Comp. Cas. 507 (Cal.), where in paragraph 14 (p. 512 of 24 Comp. Cas.) the learned judge of the Division Bench observed as to when the company could be held to be unable to pay its debts and as to the nature of the dispute of cases where disputed debts were to be excluded. There the learned judges also held that even if it was not available for the petitioning creditor the presumptive or constructive liability of the company to pay the debts, the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be deemed to be gone so as to entitle the court to pass a winding-up order when ( a ) the subject-matter of the company is gone, or ( b ) the object for which it was incorporated has substantially failed, or ( c ) it is impossible to carry on the business of the company except at a loss which means that there is no reasonable hope that the object of trading at a profit can be attained, or ( d ) the existing and probable assets are insufficient to meet the existing liabilities. When none of the four tests can be applied to the facts of the particular case, the company cannot be wound up." In the case, National Conduits ( P. ) Ltd. v. S. S. Arora [1967] 37 Comp. Cas. 786 (SC); AIR 1968 SC 279, it was held that in answer to a notice to show cause why a petition for winding-up be not admitted, the company is entitled to show cause and contend that the filing of the petition amounts to an abuse of the process of the court. It is open to the company to submit that in the interest of justice or to prevent abuse of the process of the court, the petition should not be advertised. It was further held following A Company, In re, [1894] 2 Ch 349 that where a petition is presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company owes the creditor a debt entitling him to a winding-up order but the exact amount of the debt is disputed, the court will make a winding-up order without requiring the creditor to quantify the debt precisely. The principles on which the court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law, and, thirdly, the company adduces prima facie proof of the facts on which the defence depends." In the case, Registrar of Companies, Rajasthan v. S. Sohanmull Golcha P. Ltd. [1972] 42 Comp. Cas. 386 (Raj.) it had been held (p. 388): "Section 433 of the Companies Act, 1956, is similar to section 222 of the English Companies Act of 1948, while our section 434(1) corresponds to section 223 of the English Act. There are four clauses in section 223 of the English Companies Act, while our section 434(1) contains three such clauses. Clause ( c ) of section 434(1) of our Act is similar to clause ( d ) of section 223 of the English Act and, for reasons already stated, this case has to be examined with reference to that clause. Now, the position regarding that clause has been stated a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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