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2016 (3) TMI 1254 - HC - Companies LawWinding up petitions - whether the respondent companies could claim adjustment of goods sold and delivered by Concast Bengal to the appellant petitioning creditor, assuming that Concast Bengal had actually supplied goods to the petitioning creditor, as claimed by the respondent companies? - Held that:- The question is whether there was any arrangement by which a right to adjustment can be claimed. This is a factual issue which may have to be decided on the basis of evidence, documentary as also oral. The learned Company Court rightly held that a company would be liable to be wound up if it was unable to pay its debts. The question posed by the learned Court was how the Court could adjudge if a company was unable to pay its debts. The learned Company Court drew an analogy between the circumstances in which a Court trying a summary suit could grant a decree or grant leave to defend and held that the principles would apply to winding-up proceedings. In Madhusudan Gordhands & Co. vs. Madhu Woollen Industries [P] Ltd. [1971 (10) TMI 49 - SUPREME COURT OF INDIA] relied upon by the learned Company Court, the Supreme Court held that if a company raised a defence in good faith or a defence which was likely to succeed or prima facie likely to succeed at the trial, in that event the winding-up application would fail. Industries Corporation Ltd. [2004 (8) TMI 684 - CALCUTTA HIGH COURT] where a Division Bench of this Court presided over by Ajoy Nath Ray, A.C.J., opined that in a winding-up application, the Court had to come to the conclusion that the claim of the petitioning creditor was indisputable. This determination had to be final and not prima facie, at both stages of winding up, the admission stage and the trial stage. At the admission stage it was final and conclusive as between the petitioning creditor and the company, but at the final stage it was conclusive between the petitioning creditor, the company, the creditors and all other persons who joined the winding-up. In SRC Steel Pvt. Ltd. [2004 (8) TMI 684 - CALCUTTA HIGH COURT] held that the standard of proof required by the petitioning creditor to prove his case in the winding-up application was the same standard that was required to prove a plaintiff’s case in a summary suit. The learned Company Court rightly concluded that the company must be in a completely defenceless position, for it to be wound up. It would suffice if the company raised a triable issue for relegation of a winding-up application to a civil forum, the defence is a completely sham defence, the Court may direct the company to be wound up. If, however, the defence raised by the company in the winding-up proceedings is not a sham defence but a plausible one, the Court ought not to direct winding-up of the company. We find no infirmity whatsoever in the order of the learned Company Court which calls for interference in appeal.The appeals and the connected applications are, therefore, dismissed. We, however, make it clear that the period during which the appeals have been pending in this Court, shall also be excluded for computation of limitation under Section 14 of the Limitation Act, 1963.
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