9911796707
TMI Blog1994 (1) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... alcon Gulf Ceramics Ltd. v. Industrial Designs Bureau [1996] 86 Comp Cas 207 (Raj)) passed in D.B. Special Appeal (Company) No. 76 of 1992. The Division Bench has set aside the order dated February 24, 1992, passed by the company judge only on the ground that the order of winding up was not preceded by an advertisement and that advertisement of a petition was imperative in view of the provisions of rule 96 of the Companies (Court) Rules, 1959, read with rule 99 of the said Rules. It will be proper to refer to some of the facts in order to decide the question as to whether an order for advertisement of the petition should be issued or not. The petitioner is a proprietory firm of architects, engineers and planners. The company had entere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioner, the respondent-company did not dispute the claim of the petitioner. Rather, it had pleaded that the company has been incurring losses and the cash flow of the company is under heavy strain. It promised to contact the petitioner once again through its advocate. The petitioner pleaded that despite service of statutory notice, the respondent-company has not paid the amount due to the petitioner. The respondent-company is insolvent and unable to pay its debts. On the said ground, it has sought an order of winding up. The respondent-company has contested the claim of the petitioner by alleging that the petition filed by the petitioner is not bona fide . It has been filed with the sole object of coercing the respondent-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efuted the charge of collusion between the petitioner and the contractor. Some documents have also been filed with a rejoinder in support of the claim made by the petitioner-company. During the pendency of this petition an order was made by the court on October 25, 1991, directing the respondent-company to provide inspection of the account books for the years 1989-90 and 1990-91 to the petitioner so that the petitioner may confirm as to whether the credit entry, as alleged by it, is there or not. In pursuance of the order made by the court, the respondent-company granted inspection of its account books to the counsel for the petitioner-company and its officers. Thereafter an additional affidavit dated November 15, 1991, has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt to make an order for admission and advertisement of the petition. I have given my thoughtful consideration to the rival submissions. Section 434(1) of the Companies Act, 1956, reads as under : "434. Company when deemed unable to pay its debts (1) A company shall be deemed to be unable to pay its debts ( a )if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court has no discretion to refuse to make a winding up order, and that the creditor between himself and the company could file a suit to recover the debt is irrelevant. Similarly in Surindra Packers v. Punjab Land Development and Reclamation Corporation Ltd. [1989] 66 Comp Cas 883, a learned judge of the Punjab and Haryana High Court held that where the company made their payment and failed to make the remaining payment despite repeated demands, that by itself is prima facie evidence of inability to pay. As already noted, in this case, a winding-up order had been made by the company judge on November 24, 1992, after considering the entire matter at length. At this stage, what I am required to consider is as to whether it is a fit case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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