Company Court jurisdiction cannot secure a disputed claim with a bank guarantee after relegating it to civil court.

A Company Court cannot require a company to furnish a bank guarantee for a disputed monetary claim after declining to adjudicate that claim in winding-up proceedings and relegating the creditor to the civil court. Once the dispute is sent to civil court, the creditor must pursue ordinary civil remedies, including any request for attachment before judgment under Order 38 of the Code of Civil Procedure, 1908. A parallel direction securing the same disputed claim would exceed the Company Court's jurisdiction. The direction to furnish a bank guarantee was therefore unsustainable and was set aside, while the admitted claim remained unaffected.

---

---

Issues: Whether the Company Court could direct the company to furnish a bank guarantee to secure a disputed claim after directing the creditor to seek remedy before the civil court.

Analysis: The disputed portion of the creditor's claim had already been declined for adjudication in the winding-up proceeding and relegated to the civil court. In that situation, the proper course for the creditor was to institute a suit and, if so advised, seek attachment before judgment under Order 38 of the Code of Civil Procedure, 1908. The Company Court could not, while sending the disputed claim to the civil court, simultaneously secure that claim by requiring the company to furnish a bank guarantee, as that would amount to dealing with the disputed claim in a manner beyond its jurisdiction.

Conclusion: The direction requiring the company to furnish a bank guarantee for the disputed claim was unsustainable and was set aside. The order was modified accordingly, while the admitted claim remained unaffected.

Ratio Decidendi: Where a disputed monetary claim is relegated to the civil court, the court cannot simultaneously secure that disputed claim by directing the opposite party to furnish a bank guarantee; relief analogous to attachment before judgment must be sought in the civil suit under the applicable procedural law.

---