Secured creditor petition for winding up can be refused if it benefits only that creditor and others oppose.

Whether a secured creditor may obtain a winding up order where it holds ample security and other creditors oppose the petition: the court confirmed a secured creditor may present a winding up petition without abandoning or valuing security, but retained discretion to refuse winding up where the order would not benefit the general body of creditors or where a large body of creditors oppose it; on the facts the petition would principally permit realisation of the creditor's security with no material benefit to other creditors, and the winding up order was set aside with the appeal allowed for the company (appellant).

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Issues: Whether a winding up order should be made against the company at the instance of a secured creditor who holds ample security and where other creditors do not support the petition.

Analysis: The petitioning creditor relied on statutory grounds under Section 162 and Section 166 of the Indian Companies Act and on the company s admitted defaults and alleged suspension of business and inability to pay debts. It is established that a secured creditor may present a petition for winding up and is not required, as a condition of maintainability, to abandon or value his security. However, the court retains a discretion to refuse winding up where the order would not benefit the general body of creditors or where a large mass of other creditors oppose the winding up. The evidence indicated that, apart from the petitioning creditor, other creditors were not supporting the petition and that a winding up would primarily permit the petitioning creditor to realise its security without providing any material benefit to other creditors.

Conclusion: Winding up order set aside; appeal allowed in favour of the company (appellant).

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