1989 (5) TMI 257

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....nod Sharma for the Respondent. JUDGMENT G.R. Majithia, J.-This is a creditor's petition under section 439, read with sections 433(e) and 434 of the Companies Act, 1956, (for short "the Act"). The averments in the petition briefly are as follows: The respondent is indebted to the petitioner-company in the sum of Rs. 17,49,865.90. It is also liable to pay interest at the rate of 22.75 per c....

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.... to pay its debt under section 434(1)(a) of the Act and this entitles the petitioner to an order for winding up the company. I am afraid the submission of learned counsel is not well-founded. The apex court in Harinagar Sugar Mills Co. Ltd. v. M. W. Pradhan [1966] 36 Comp Cas 426 (SC), quoted with approval the following passage from Palmer's Company Precedents, Part II, 1960 edition, page 25 : ....

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.... is also manifest that the power to wind up exists, but its exercise is governed by considerations of propriety. In Aluminium Corporation of India Ltd. v. Lakshmi Rattan Cotton Mills Co. Ltd. [1970] 40 Comp Cas 259 ; AIR 1970 All 452, which arose on a creditor's petition to wind up the respondent company, it was held thus (headnote of AIR); "The fact that the company is unable to pay its debts,....