2003 (2) TMI 412

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....er annum) The notice was served on the respondent. There is some dispute by the respondent-company regarding the service which prima facie is not capable of belief and I proceed on the presumption that notice under section 434 was served on the respondent-company. Accordingly, it is necessary to look at the contents of the reply of the respondent-company filed in this court. The essence of reply of the respondent-company is that there was an arrangement of the petitioner for securing work for the respondent-company which did the work of interim decoration and the petitioner forwarded the said payment some time received in cash to the petitioner-company as a result of which payment was made to the respondent-company and since the petitioner ....

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....itioner being an army officer did not have access to such sources of money. It is contended that the source of money had not been indicated clearly though learned counsel for the petitioner states that the documents filed and the bank statements showed that the deposits were made. Considering the entire gamut of facts, it is clear that the transaction between the parties is not so clear so as to attract the jurisdiction of this court in winding up Apart from the amount shown in the balance-sheet, there is no document of any kind whatsoever with the petitioner to indicate the nature and the manner of deposits including the claim of interest at 18 per cent, per annum on advances by the petitioner. It is not acceptable that a senior serving a....

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....has given a reasonable explanation for the receipt of the said amount and its version cannot be discounted at this juncture in the winding up proceeding. The learned single judge in Charanjit Singh Grewal's case [2003] 6 AD (Delhi) 637 has after a comprehensive and felicitous summation of principles of law which govern winding up proceedings laid down the following position of law : "(i)If there is a bona fide dispute and the defence is a substantial one, the court will not wind up the company. (ii)Where the debt is undisputed the court will not act upon a defence that the company has the ability to pay the debt but the company chooses not to pay it. (iii)Where the defence of the company is in good faith and one of substance, and the de....