Winding-up petition and bondholder authorisation requirements defeated where trustee failed to prove the contractual threshold.

A winding-up petition based on bondholder rights was not maintainable because the trustee failed to show prior authorisation from holders of at least 25% of the outstanding principal, as required under the trust deed. The court did not accept a later attempt to file supporting documents after judgment was reserved. It also reiterated that winding up is not a proper method to compel payment or pressure settlement against a going concern, particularly where the company was shown to be facing financial difficulty. The petition was therefore rejected and no winding-up order was made.

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Issues: Whether the company petition for winding up was competent in the absence of proof that holders of 25% of the outstanding bonds had authorised the trustee, and whether the respondent company should be wound up for non-payment of interest despite the statutory demand notice.

Analysis: The petitioner's right under the trust deed depended on authorisation by bondholders holding at least 25% of the principal amount outstanding. The petitioner failed to place such authorisation on record despite the preliminary objection. The later attempt to file documents by memo after the judgment was reserved was not accepted. In the circumstances, the petition was held to be defective and not maintainable as framed. The Court also reiterated that winding up is not a proper means of enforcing recovery against a running company merely to pressure it into settlement, especially where the company was shown to be a going concern facing financial crunch.

Conclusion: The winding up petition was not maintainable and was rejected; the respondent company was not ordered to be wound up.

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