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of <h1>Court dismisses winding up petition citing non-compliance with statutory notice requirements</h1> <h3>Japan Cotton Trading Company Ld. Versus Jajodia Cotton Mills Ld.</h3> The High Court of Calcutta dismissed the compulsory winding up petition by Japan Cotton Trading Company, Limited against Jajodia Cotton Mills, Limited. ... - Issues:Compulsory winding up petition by Japan Cotton Trading Company, Limited against Jajodia Cotton Mills, Limited; Validity of petitioning creditor's debt; Compliance with Section 163 of the Indian Companies Act for statutory notice; Sufficiency of the letter dated 31st March 1926 as a statutory notice; Alleged insolvent position of the company; Decision on promissory note and arrangement releasing the company from petitioning creditors' claim; State of account between Sukdeodas Ramprosad and petitioning creditors; Costs incurred by petitioning creditors for an intermediate application.Analysis:The judgment by the High Court of Calcutta involved an appeal by Japan Cotton Trading Company, Limited for the compulsory winding up of Jajodia Cotton Mills, Limited. The petitioning creditors claimed entitlement based on a promissory note endorsed to them by Sukdeodas Ramprosad, the managing agents of the company. The first issue addressed was the validity of the petitioning creditor's debt. It was contested whether the promissory note bound the company or the directors personally. Another issue raised was the compliance with Section 163 of the Indian Companies Act regarding the statutory notice. The court scrutinized the requirement of a demand served 'under his hand' for the notice to be valid, emphasizing the importance of formal compliance with the statute.Regarding the sufficiency of the letter dated 31st March 1926 as a statutory notice, the court found it inadequate as it did not establish the company's default at the time of service. The judgment highlighted the necessity of presentment for payment before the debt could be considered due. The court emphasized that the petitioning creditors failed to establish the company's inability to pay its debts through the statutory notice. The court also discussed the alleged insolvent position of the company, noting that the balance sheet alone was insufficient proof of insolvency without a specific case made by the petitioning creditors.The judgment addressed the decision on the promissory note and the arrangement releasing the company from the petitioning creditors' claim. It clarified that these matters were no longer covered by the previous decision. Additionally, the court briefly mentioned the state of the account between Sukdeodas Ramprosad and the petitioning creditors, deeming it irrelevant. Lastly, the court overturned the order for the petitioning creditors to pay costs incurred for an intermediate application, emphasizing that there was no basis for the application to be taken off the file. The petition was ultimately dismissed, and the appeal was also dismissed with costs, except for specific costs related to the intermediate application.
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