Pledged shares as security, no novation without unequivocal acceptance, and the winding-up petition was admitted.

Pledged shares transferred in favour of the petitioner were treated only as security, as the subsequent correspondence supported that commercial understanding and allowed the set-off question to be examined on that basis. On novation, no material showed compliance with the terms of the petitioner's offer, and no contract could arise without unequivocal acceptance; the statutory notice was therefore not displaced. The challenge to the rejoinder was rejected, and the affidavit in rejoinder was taken on record. The petition was admitted, while the request for stay was refused and the matter was directed to proceed for hearing.

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Issues: Whether the pledged shares were held only as security and could support a set-off; whether there was novation of the contract so as to displace the statutory notice; and whether the winding-up petition should be admitted with stay of the order refused.

Analysis: The material on record showed that the shares, even if transferred in favour of the petitioner, were intended only as security, as supported by the subsequent correspondence between the parties. On novation, there was no material to show compliance with the terms of the petitioner's offer, and a contract could not be said to arise without unequivocal acceptance. The challenge to the rejoinder was rejected and the affidavit in rejoinder was taken on record.

Outcome: The petition was admitted, the request for stay was rejected, and the matter was directed to proceed for hearing.

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