1989 (5) TMI 257 - HC - Companies Law

Summary

Issues Involved:
Creditor's petition u/s 439, read with sections 433(e) and 434 of the Companies Act, 1956.

Judgment Details:

Issue 1: Debt Recovery and Winding-Up Petition
The petitioner, a creditor, claimed that the respondent owed a substantial sum and failed to pay despite a notice served u/s 434 of the Act. The respondent argued that a civil suit on the same matter was filed in another court. The court cited legal precedents emphasizing that a winding-up petition is a valid remedy for debt recovery but not an alternative to regular debt realization procedures. The court noted that the power to wind up a company is discretionary even if it is unable to pay its debts. Therefore, the court dismissed the petition, stating that resorting to winding-up solely for debt recovery is not permissible.