Statutory right to seek winding-up upheld; death of creditor and unsupported defence did not prevent petition or create a bona fide dispute.

A creditor's right to present a winding-up petition is a statutory right and was not defeated by the original creditor's death or the absence of a succession certificate at that stage. The company's defence was rejected because the admitted loans and executed promissory notes established an undisputed debt, while the claimed repayment arrangement from film collections was unsupported and treated as an afterthought, so no bona fide dispute arose. A parallel City Civil Court suit and injunction could not bar presentation of the petition because that court lacked jurisdiction to restrain it, and the injunction was treated as a nullity. The petition was maintainable and the company was unable to pay its debts.

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Issues: Whether the winding-up petition was maintainable despite the death of the original creditor and absence of a succession certificate; whether the defence set up by the company disclosed a bona fide dispute to the debt; and whether the parallel suit and injunction obtained in the City Civil Court could bar presentation of the winding-up petition.

Analysis: The admitted loans and executed promissory notes showed an undisputed liability, while the company's version that repayment was to come only from film collections was unsupported by any document and was found to be an afterthought. The City Civil Court suit was held to be in substance an attempt to restrain presentation of a winding-up petition under section 434 of the Companies Act, 1956, and therefore outside that court's jurisdiction under section 5(4) read with the First Schedule of the City Civil Court Act, 1953; the injunction order was treated as a nullity. The Court further held that a petition to wind up is an exercise of a statutory right, so the heirs of the deceased creditor did not need a succession certificate at this stage to present the petition.

Conclusion: The petition was maintainable, the defence was not bona fide, and the company was held unable to pay its debts.

Final Conclusion: The winding-up petition was admitted for advertisement, with the matter directed to be listed again thereafter.

Ratio Decidendi: A creditor's right to present a winding-up petition is a statutory right that is not defeated by the death of the creditor or by the absence of a succession certificate, and a suit filed to restrain such presentation without jurisdiction cannot create a bona fide dispute to the debt.

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