Winding-up petitions may proceed despite parallel debt-recovery claims when liquidation and inability to pay debts remain in issue.

A creditor's winding-up petition is not barred merely because the same debt is already being pursued before the Debts Recovery Tribunal. The company court must treat a winding-up petition as a proceeding to test whether the company is unable to pay its debts and whether liquidation is warranted, and it should examine the petition on merits at the receiving stage where debt, statutory notice and non-payment are pleaded. Pendency of parallel debt-recovery proceedings under the 1993 Act does not itself defeat admission of the winding-up petition, since the relief sought is liquidation rather than a money decree. The petition was therefore required to be restored for consideration in accordance with law.

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Issues: Whether a creditor's winding-up petition could be dismissed at the receiving stage because the same debt was already the subject of proceedings before the Debts Recovery Tribunal, and whether pendency of such proceedings barred admission of the winding-up petition.

Analysis: A creditor's winding-up petition is not a suit for recovery of money alone but a proceeding to determine whether the company is unable to pay its debts and should be wound up. Where the petitioner asserts a debt, service of statutory notice, and non-payment, the company court is required to examine the petition on merits at the receiving stage. The pendency of proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 does not by itself prohibit a winding-up petition on the same claim, because the relief sought in company jurisdiction is liquidation and not a money decree. Any defence as to securities or liability can be considered only after the company appears and contests the petition.

Conclusion: The dismissal of the winding-up petition at the receiving stage was unsustainable. The petition had to be restored for consideration in accordance with law.

Final Conclusion: The company court cannot refuse to entertain a creditor's winding-up petition merely because parallel debt-recovery proceedings are pending, and such a petition must be considered on its own legal footing at the appropriate stage.

Ratio Decidendi: Pendency of debt-recovery proceedings does not bar a creditor's winding-up petition for the same debt, and the company court must decide whether the company is unable to pay its debts and whether liquidation is warranted on merits.

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