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TMI Blog1990 (4) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Supreme Court in the case of Madhusudan Gordhandas and Co. v. Madhu Woollen Industries Pvt. Ltd. [1972] 42 Comp Cas 125 . In my view, there is no such absolute law. The section itself confers judicial discretion upon the courts. In the present case, it seems that the intention of the petitioners in insisting on admission of these matters is only to coerce the company and extract from it immediately by any means the amount which is payable to the petitioners. There is no such law that a company which is a running company employing about 500 employees who are paid their wages regularly and which is having a business of crores of rupees every year should be brought to a grinding halt by admitting these petitions merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or not and in doing so consider many relevant factors. It may be that despite the inability to pay its debts, a company has still prospects of coming back to life and if the court is told of any specific proposal, which in the opinion of the court is likely to materialise, the court will be inclined to give a chance to resurrect the company. It should be the policy of the court to attempt to revive though at the moment the company may not be solvent and may not be able to meet its obligations to its creditors. But this should be only if it is shown that there is reasonable prospect for resurrection and survival. It may be easy for a court when once it is shown that the company is unable to pay its debts to bury it deep, and distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, it would be a blow to do so, so long as there is any possibility of resurrecting the company. It would not be right to say that creditors can insist on winding up of a company by the court as a matter of right if the position of the company is such that it would be unable to pay its debts to them even if the company can be resurrected. When the persons to whom the company becomes indebted enter into dealings with the company, they do so because they hope to make profits out of the transactions with the company in the usual course of business. It is an incidental risk and an occupational hazard for the persons who enter into such dealings which they undertake in order to earn profits. In fact, it is possible that in the course of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be made on a creditor's petition if it would not benefit him or the company's creditors generally. The grounds furnished by the creditors opposing the winding up will have an important bearing on the reasonableness of the case (see P J Macrae Ltd., In re [1961] 31 Comp Cas 424 ; [1961] 1 All ER 302 (CA)". The court also considered that if the petition is filed out of improper motive to coerce the company then the court may refuse winding up. In the present case, it is the say of Mr. Shah, the learned advocate appearing on behalf of the company, that because of financial difficulties created on account of dispute with Coal India Ltd. and other purchasers, large amounts of the company are being withheld and, therefore, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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