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TMI Blog1926 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the petitioning creditors. They obtained a promissory note for ₹ 6,00,000 from the company payable on the 31st of March 1926 and they endorsed that promissory note to the petitioning creditors. It is as endorsees of that promissory note that the Japan Cotton Trading Company, Limited, claim to be entitled to wind up the Cotton Mills, Limited. 3. The first question in such a case, logically no doubt, is the question whether there is a good petitioning creditor's debt, and two points as to that are contested at the present stage of this case. The first point of contest is that it is said that upon a true construction of the promissory note it is not a note binding the Jajodia Cotton Mills, Limited, at all, but is really a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in default the Japan Cotton Trading Company Limited would adopt legal proceedings. 7. Those notices are letters signed by the solicitors in their own name Fox and Mandal, and the objection taken before us is that that does not comply with the of Sub-section (1) to Section 163: If a creditor, to whom the company is indebted in. a sum exceeding ₹ 500 then due, has served on the company a demand under his hand requiring the company to pay the sum so due. 8. We have, therefore, to consider in this case whether it is correct to apply for the purposes of Section 163 the general common law principle qui facit per alium facit per se in accordance with the decision in In re Whitlay Partners, Limited (1886) 32 Ch.D. 337. It seems to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice as the Bankruptcy notice under the English Bankruptcy Act. But it is clear that under his hand has some special purpose in this connexion; and in view of the fact that a consequence so serious is attached to non-compliance with the notice I am not of opinion that there is here nothing to prevent the general common law principle from being applied. That being so the two notices founded upon in this petition as being statutory notices are not sufficient. 9. The only other question which arises is whether the letter written on the 31st of March 1926 signed in the name of the petitioning creditors by their manager Mr. Y. Ohsaka would not be a sufficient compliance. In this case it appears that the promissory note was payable on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y could not be said to be due because presentment was being made for the first time by the very letter itself. If, on the other hand, one takes the view that presentment was not necessary at all to charge the makers of this promissory note, then the company was not in default until the end of that day. At the time the letter was served upon them they had still some time in which they could or could not pay the money; and, in my judgment, in no way can that letter ba regarded as a compliance with Section 163. In my view Sub-section (1) to Section 163 means that the company to be served must, at the time of the service, be in default and that, being in default, it is to be served with a demand under rather special precautions so that if it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t want to pretend for a moment that this balance sheet would inspire me with any confidence in the concern, but it is not right that this balance sheet produced by the respondents should be taken as against them as proof on the face of it that they are unable to pay their debts. 12. We find that there are two matters on which Mr. Justice Ghose made a decision. He held that the promissory note in this case is not a note of the company. I do not propose to give any opinion on that point, nor would it be fair to do so in view of the fact that the company's case has not been argued before us. The same observation applies to the question whether there was any arrangement releasing the company from the claim of the petitioning creditors. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is disposed of by this Court on the basis that the petitioning creditors have not satisfied the Court by proper proof that the case comes within Section 182, Clause (5), that the company is unable to pay its debts. The questions as to the liability of the company and as to the arrangement are left open. 15. The order of the learned Judge is varied by discharging that part of it which directed the petitioning creditors to pay to the company costs of the intermediate application, but the petition is otherwise dismissed with costs and the appeal is dismissed with costs. As to the intermediate application Mr. Banerjee's clients will get the costs of one affidavit only on the ground that it was used as part of their opposition to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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