Pledged shares and winding-up debt claim: sale power was optional, and the defence was not bona fide.

In a winding-up petition over an unpaid loan, the court treated the respondent's objection that the pledged shares should have been sold before the balance debt was demanded as not a bona fide defence. The pledge agreement gave the petitioner a power to sell the shares, but not a mandatory duty to do so, and the respondent had not raised that point in response to the statutory notice, instead undertaking staged payment of the balance. The court therefore required deposit of the claimed amount and directed deposit of the pledged shares, with the petition to stand disposed of on payment and admitted if the deposit was not made.

---

---

Issues: Whether the respondent's objection that the petitioner should have sold the pledged shares before demanding the balance debt constituted a bona fide defence to the winding-up petition under sections 433 and 434 of the Companies Act, 1956.

Analysis: The petition was based on an unpaid loan and a statutory notice that had elicited a reply undertaking staged payment. The agreement showed that the petitioner had power to sell the pledged shares, but the power was not mandatory. The respondent had not raised this objection in reply to the statutory notice and had instead undertaken to pay the balance. On that basis, the defence was not treated as bona fide.

Outcome: The respondent was directed to deposit the claimed amount in court within the stipulated time, and the petitioner was directed to deposit the pledged shares. The winding-up petition was to stand disposed of if the amount was deposited, and was to stand admitted if the deposit was not made.

---