TaxTMI 
TaxTMI 
TaxTMI 
1979 (8) TMI 159
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Civil Court, Madras, against the appellant herein in O.S. No. 3032 of 1966 for a sum of Rs. 17,093-06 with further interest. The first respondent issued a notice as contemplated in section 434(1) of the Act. The first notice was returned as "left" and to a second notice issued to the appellant, there was a reply that the original decree under Ex. P-1 was only an ex-parte decree and that efforts were being made to have the same set aside. However, at the time when the matter came to be disposed of by the learned judge, it was not in dispute that the attempt to have the ex parte decree set aside had failed and that the said decree had become final and effective. In view of this, the point that was urged before the learned judge was that sinc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor ; (b)if execution or other process issued on a decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (c)if it is proved to the satisfaction of the court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company". The controversy that had to be considered in this case was whether the first respondent herein, since it happened to be a decree-holder against the appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n contemplate a money decree or order for payment of money and it generally uses the expression "if execution or other process issued on a decree or order of any court in favour of a creditor of the company". Therefore, the decree or order that is contemplated by section 434(1)(b) is not confined only to a money decree or an order for payment of money. On the other hand, it is general in nature. However, what we have to concentrate on is, whether a person who had obtained a decree for money against a company will cease to be a creditor because of that fact, so as to take his case out of section 434(1)(a) of the Act. We are of the opinion that there is no warrant for such a contention. A creditor, who has instituted a suit and obtained a dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Madhuban Pvt. Ltd. v . Narain Dass Gokal Chand [1971] 41 Comp. Cas. 685 at 692-693. It would appear that in that case a similar argument was urged before the learned judge and the same was rejected. It was stated therein as follows (p. 692): "The learned counsel submitted that it was not necessary in the case of a creditor holding a decree against the company to serve a notice. Specific provision, on the other hand, was made for taking out execution of the decree in such a case, which was not done in this case. The argument, of the learned counsel, however, is without any merits. Clauses (a) and (b) provide two alternative methods of showing that the company is unable to pay its debts. A creditor does not cease to be a creditor, if he ....