Statutory demand under his hand requires the creditor's personal signature; agent-signed demand was invalid.

A statutory demand under section 163(1) of the Indian Companies Act, 1913 had to be signed personally by the creditor because the words "under his hand" were treated as deliberate and precise, and the demand signed by an agent was invalid. The company was also not proved unable to pay its debts, as the materials before the Court were insufficient and the debt had in any event been paid shortly after presentation of the petition. The winding-up petition was further found not to be bona fide, having been used as pressure rather than a genuine insolvency proceeding. The decision emphasised that serious statutory consequences require strict compliance with the prescribed form.

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Issues: (i) whether a demand notice under section 163(1) of the Indian Companies Act, 1913, served by the creditor's agent, satisfied the requirement of a demand "under his hand"; (ii) whether the materials before the Court established that the company was unable to pay its debts; and (iii) whether the winding-up petition was bona fide.

Issue (i): whether a demand notice under section 163(1) of the Indian Companies Act, 1913, served by the creditor's agent, satisfied the requirement of a demand "under his hand".

Analysis: Section 163(1) created serious consequences for the company by deeming it unable to pay its debts if a proper demand remained unpaid for three weeks. The wording "under his hand" was treated as precise and intended to avoid doubt as to authority. In that setting, the demand had to be signed personally by the creditor and not by an agent.

Conclusion: The demand signed by the agent was not a valid demand under section 163(1), and this issue was decided against the appellant.

Issue (ii): whether the materials before the Court established that the company was unable to pay its debts.

Analysis: Apart from the defective statutory demand, the petitioning creditor sought to prove insolvency by oral evidence after the company's solvency was denied. On the materials then available, there was no sufficient proof of inability to pay debts, and the debt itself had in any event been paid in full shortly after the petition was presented.

Conclusion: The company was not proved to be unable to pay its debts, and this issue was decided against the appellant.

Issue (iii): whether the winding-up petition was bona fide.

Analysis: The surrounding circumstances showed that the petition was pursued after the debt had been paid and in the face of an existing commercial arrangement affecting the petitioning creditor's obligations. The petition was found to have been used as pressure rather than as a genuine insolvency proceeding.

Conclusion: The petition was not bona fide, and this issue was decided against the appellant.

Final Conclusion: The appeal failed because the statutory demand was invalid, insolvency was not established, and the petition was not brought in good faith.

Ratio Decidendi: Where a statute uses the words "under his hand" in a provision carrying serious legal consequences, the requirement calls for personal signature by the creditor unless the statute clearly permits execution by an agent.

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