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Issues: (i) Whether a secured creditor can maintain a winding up petition without first giving up its security or proving that the security is insufficient to meet the debt; (ii) Whether, on the facts, the company's inability to pay its debts and commercial insolvency justified admission of the winding up petition notwithstanding steps taken under the SARFAESI Act.
Issue (i): Whether a secured creditor can maintain a winding up petition without first giving up its security or proving that the security is insufficient to meet the debt.
Analysis: A creditor's right to present a winding up petition flows from the Companies Act, 1956, and a secured creditor is included within that class. The statutory scheme under Section 433(e) and (f), Section 434(1)(a), and Section 439(1)(b) and (2) does not impose a blanket bar on a secured creditor merely because security exists or because proceedings are also pursued under the SARFAESI Act. The existence of security may affect the court's discretion, but it does not destroy the creditor's locus to seek winding up. The court also noted that the creditor had established the debt and the company had not raised a bona fide dispute capable of resisting the petition.
Conclusion: A secured creditor can maintain a winding up petition, and the absence of a plea or proof that the security is insufficient does not by itself render the petition non-maintainable.
Issue (ii): Whether, on the facts, the company's inability to pay its debts and commercial insolvency justified admission of the winding up petition notwithstanding steps taken under the SARFAESI Act.
Analysis: The record showed substantial admitted liability, mortgaged fixed assets, negative net worth, and failure to meet the demand. The company did not show any credible financial ability to discharge the debt, and the court treated the petition as supportable not only on deemed insolvency under Section 434(1)(a) but also on inability to pay under Section 433(e) and (f). The existence of SARFAESI steps did not oust the winding up jurisdiction. The court also found that the company had not demonstrated a bona fide dispute, and that admission of the petition was the appropriate course.
Conclusion: The winding up petition ought to have been admitted, and the refusal to admit it was unsustainable.
Final Conclusion: The order refusing admission of the winding up petition was set aside, and the matter was remitted for further steps toward admission and advertisement of the petition.
Ratio Decidendi: A secured creditor remains entitled to seek winding up of a company where the debt is established and the company has not raised a bona fide dispute; the existence of security or parallel SARFAESI proceedings does not by itself bar maintainability, and the petition may rest on both deemed insolvency and inability to pay debts.
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