Court receiver as creditor in winding-up proceedings, with valid statutory demand despite asserted dispute and attachment.

A court receiver authorised under Order XL Rule 1(d) may file a winding-up petition to realise debts belonging to the estate, because that power extends to steps for recovery of assets and debts and treats the petition as a form of equitable execution. The receiver is also a creditor for winding-up purposes where he is authorised to realise the debt and sue in his own name, read with the Companies Act provisions on creditors and petitions. A statutory demand is valid if it gives the debtor a means of full legal discharge, and a non-bona fide dispute will not defeat proceedings based on inability to pay debts.

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Issues: (i) whether a court receiver empowered under Order XL, rule 1(d), of the Code of Civil Procedure, 1908 could maintain a petition for winding up of a company for realisation of the debt due to the estate; (ii) whether such a receiver was a creditor competent to present a winding-up petition under the Companies Act; and (iii) whether the statutory notice and the alleged neglect to pay satisfied section 434 of the Companies Act, notwithstanding the income-tax attachment and the asserted dispute as to the debt.

Issue (i): whether a court receiver empowered under Order XL, rule 1(d), of the Code of Civil Procedure, 1908 could maintain a petition for winding up of a company for realisation of the debt due to the estate

Analysis: The power conferred on the receiver was wide enough to include steps taken for recovery of assets and debts belonging to the estate. A winding-up petition was treated as a mode of equitable execution and a permissible means of realising a just debt. The authority to file suit and to take such other powers as the court thought fit was held sufficient to support the petition.

Conclusion: The receiver was competent to file the winding-up petition; the contention against his authority failed.

Issue (ii): whether such a receiver was a creditor competent to present a winding-up petition under the Companies Act

Analysis: A receiver authorised to realise a debt and to sue in his own name stood in the position of a person to whom the debt was payable. Reading sections 433, 434 and 439 of the Companies Act together, a creditor by assignment or otherwise included a person who had such recoverable control over the debt. The receiver was therefore treated as a creditor for the purpose of presenting the petition.

Conclusion: The receiver was a creditor within section 439(1)(b) of the Companies Act and could maintain the petition.

Issue (iii): whether the statutory notice and the alleged neglect to pay satisfied section 434 of the Companies Act, notwithstanding the income-tax attachment and the asserted dispute as to the debt

Analysis: The notice was held to be in substance compliant because payment to the Additional Collector would give the company a valid discharge in view of the income-tax notice under section 46(5A) of the Income-tax Act, 1922. The company did neglect to comply with the demand. The suggested attachment did not prevent payment in the manner required by the notice. The alleged dispute was found not to be bona fide, being inconsistent with the material on record.

Conclusion: Section 434 was satisfied, and the company's objections on notice, neglect and bona fide dispute were rejected.

Final Conclusion: The winding-up proceedings were upheld and the appeal failed.

Ratio Decidendi: A receiver authorised by the court to realise a debt and to sue in his own name is a creditor for winding-up purposes, and a statutory demand is valid if it affords the debtor a means of full legal discharge; a non-bona fide dispute will not defeat proceedings for inability to pay debts.

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