TMI Blog1953 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ed capital is Rs. 20 lakhs, out of which a capital of Rs. 10,13,519, was paid up. The registered office of the company is at Hagari Bommanahalli, Bellary district. The respondent who was the petitioning creditor is the Madras Industrial Invest ment Corporation Ltd. The company borrowed from the respondent a sum of Rs. 6,50,000 and secured the said sum by a mortgage dated October 24,1950. The hypotheca included lands situated at Hospet in the Bellary district and the engines, machinery, plant and factories belonging to the company and which might be erected at any time during the continuance of the mortgage. The principal amount was repayable in 16 equal annual instalments, the first of such instalments to be paid on 30th June, 1953. Interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otic condition, that there was a deadlock in its management, that the accounts of the company had not been properly kept, and that the financial position of the company was such that it was not possible any longer to work the concern for a profit. The petition was opposed by the company. Though the default in payment of interest was admitted, the allegations of mismanagement and deadlock were denied. The company inter alia stated that the petitioning creditor had other rights and remedies which could be pursued to enforce its rights, that the financial embarrassment of the company was only temporary and due to causes beyond their control, and that a winding up of an industrial concern like the company would mot be in the best interests of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for winding up. Nor did he invoke the rule in bankruptcy that before a secured creditor could file a petition for winding up he had to abandon his security or to value the security and aver that after giving credit to such value there would be a balance due and payable to him. It is well established that a secured creditor is as much entitled as of right to file a petition for winding up as an unsecured creditor. Moor v. Anglo Italian Bank is the leading decision on the point. Jessel M. R. observed thus: "What the plaintiffs say is this: they say that a petitioning creditor in bankruptcy, in order to obtain adjudication, must be an unsecured creditor. That is quite correct in this sense, that he must be a creditor who either never ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except the realisation by the respondent of his security. He relied on the decision in In re Great Western ( Forest of Dean ) Coal Consumer's Co. There is considerable force in this argument of the appellant's counsel, and the decision in In re Great Western ( Forest of Dean ) Coal Consumer's Co. appears to be apposite to this case. In that case, there was a creditors' petition for the winding up of a company. The petitioners represented a moiety of the first mortgage debt and debentures for a large sum of money. It was contended that the company was admittedly and clearly insolvent and therefore a winding up order was to be made. For the company, it was contended that the petitioners held security for their debt, that if their sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These observations equally apply to the present case. Here too, we think that nothing would be gained by a winding up beyond the realisation of the respondent's security. Fry J., while conceding that prima facie a person having an unsatisfied debt due from a company had a right ex debito jusiitiae to a winding up order, pointed out that nevertheless the court would not make an order for the winding up if there was a large mass of other creditors opposed to the winding up. In the present case, too, we are of opinion that it must be held that except the respondent creditor the other creditors are opposed to the winding up. According to the respondent, there are unsecured creditors to the extent of Rs. 4,76,628. The company stated that ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The court may, nevertheless refuse to make a winding up order having regard to the wishes of the majority of the creditors. (Halsbury's Laws of England, Vol. V, 2nd Edn., para. 889). The order will also be refused if it would not benefit the creditors generally but only the petitioning creditor (Palmer's Company Law, 19th Edn., page 381). Both these circumstances are present in this case, and the court will, therefore, be justified in refusing to make the order. Mr. Pattabhiraman, learned counsel for the respondent, was unable to cite any instance in India or in England in which in a case like the present, at the instance of a creditor holding ample security, he has been held to be entitled to an order of winding up without having had r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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