Secured creditor may maintain winding up petition despite security, SARFAESI steps, and commercial insolvency findings.

A secured creditor is not excluded from presenting a winding up petition merely because it holds security or has invoked SARFAESI remedies. The court treated the petitioning creditor as a creditor within the winding up provisions and held that maintainability may rest on deemed insolvency after notice of demand or on the company's broader inability to pay its debts. The existence of mortgaged assets did not by itself defeat admission where the company's financial position showed commercial insolvency, and no bona fide dispute was raised to resist the petition. On that basis, the winding up petition was held maintainable and refusal to admit it was erroneous.

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Issues: Whether a secured creditor may maintain a winding up petition without first giving up its security or proving that the security is insufficient to satisfy the debt, and whether the company court can admit such a petition on the basis of indebtedness, deemed insolvency, and inability to pay debts.

Analysis: The petitioning creditor was held to be a creditor within the meaning of the winding up provisions, and a secured creditor was not excluded from invoking the remedy. The Court held that the right to maintain a winding up petition could arise both on the basis of deemed insolvency under notice of demand and on the broader ground that the company was unable to pay its debts. It further held that the creditor need not be disabled merely because it had also taken steps under the SARFAESI Act, and that the existence of mortgaged assets did not by itself defeat maintainability where the company's financial position showed commercial insolvency. The Court also found that the company had not raised a bona fide dispute sufficient to resist admission of the petition.

Conclusion: The winding up petition was maintainable at the instance of the secured creditor, and the refusal to admit it was erroneous.

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