Company petition admitted with interest, winding up set aside, amount held pending separate suit.

The Court admitted a company petition for a specified sum with interest, despite the company's counter-claim. However, after evaluating the counter-claim and the company's proactive actions, the Court set aside the winding up proceeding. The amount held by the Court was directed to be paid to the respondent pending the outcome of a separate suit, with accrued interest to be held by the Court accordingly. Judge Ansari concurred with the decision, and no costs were awarded.

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Issues:
Admission of company petition for a sum of Rs. 3,68,829.56 with interest, existence of counter-claim, neglect to pay debt, reasonable excuse for non-payment, setting aside winding up proceeding.

Admission of Company Petition:
The appeal was against an order admitting a company petition for Rs. 3,68,829.56 with interest. The company deposited the principal sum with the Court following a conditional stay order. The respondent claimed the debt was due and payable by the company, which was not disputed. The Court observed that the debt was due and admitted the winding up petition, disregarding the company's counter-claim and pending suit.

Existence of Counter-Claim:
The company alleged a counter-claim against the respondent, canceling out its liability partially. The key question was whether the counter-claim provided a reasonable excuse for non-payment. The Court assessed the validity and bona fides of the counter-claim, noting the company's proactive steps in depositing the principal sum and filing a suit before the winding up petition.

Neglect to Pay Debt and Reasonable Excuse:
The Court found no neglect in paying the debt to the petitioning creditor, considering the existence of a reasonable excuse for non-payment. Citing relevant case laws, the Court emphasized the importance of assessing the validity and bona fides of the counter-claim in determining the excuse for non-payment.

Setting Aside Winding Up Proceeding:
Based on the assessment of the counter-claim and the company's proactive measures, the Court concluded that the winding up proceeding could not proceed. The orders of the Single Judge were set aside, and the amount held by the Court was directed to be paid to the respondent subject to the outcome of the pending suit. Interest accrued on the sum was to be held by the Court for the entitled party based on the suit's result.

In conclusion, the Court disposed of the appeal, emphasizing that the winding up proceeding could not continue, and no costs were awarded. Judge Ansari concurred with the decision.

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