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1 - 7 of 7 (1.27 seconds)Section 434 in The Companies Act, 1956 [Entire Act]
V.V. Krishna Iyer Sons vs New Era Manufacturing Co. Ltd., Palghat on 9 December, 1964
17. In the case of V.V. Krishna. Iyer Sons v. New Era Mfg. Co. Ltd. [1965] 35 Comp Cas 410 (Ker), the learned company judge has indicated that in an application to wind up a company on the ground of its insolvency, the fixed assets and the plant and machinery, which are necessary for carrying on the business of the company, cannot be ignored. The question to be considered is whether the company is able to meet its current demands and whether its existing and probable assets would suffice to meet future demands. That, if all the demands were forthwith made upon it, it would be able to meet the demands only by mortgaging or selling its capital assets, perhaps closing down, does not mean that it is insolvent. Reliance had been placed on some decisions of different High Courts.
State Of Andhra Pradesh vs Hyderabad Vegetable Products Co. Ltd., ... on 17 January, 1961
In the case of State of Andhra Pradesh v. Hyderabad Vegetable Products Co. [1962] 32 Comp Cas 64 (AP), the learned company judge referred to the principle of commercial insolvency as the foundation for making of an order of winding up at the instance of the unpaid creditor. The basis of an order for winding up of a company is that the company has ceased to be commercially solvent and, therefore, it is fit and proper in the interest of the creditors and shareholders not to allow it to function as a company was indicated as the guideline. Referring to the phrase " commercial insolvency ", the learned judge further observed that it means that the company is plainly and commercially insolvent, that is to say, that its existing and probable assets are such as to make the court feel satisfied that they would be insufficient to meet the existing liabilities and insolvency is to be presumed when there has been a failure to pay a debt in accordance, with a statutory notice of demand and it may also be proved in other ways. In this case, the main debt (sic) disputed though dispute regarding certain smaller amounts had been raised. The court observed that where the substantial part of the debt was due and owing by the company to the petitioning creditor, an order of winding up was justified.
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Amalgamated Commercial Traders (P.) ... vs A.C.K. Krishnaswami And Anr. on 8 January, 1965
In the case of Amalgamated Commercial Traders P. Ltd. v. Krishnaswami [1965] 35 Comp Cas 456, the Supreme Court dealt with a case where dividends declared by the company had not been paid and the shareholders as creditors in respect of the dividends due sued for winding up. Sikri J., as the learned judge then was, spoke for the court, thus (pages 463, 464) :
C. Hariprasad vs Amalgamated Commercial Traders ... on 19 November, 1963
In the case of Hariprasad v. Amalgamated Commercial Traders P. Ltd. [1964] 34 Comp Cas 209 (Mad), a Bench of the court stated that where a creditor's petition for winding up is contested by the company on the ground that no debt is due to him (creditor), the court should ordinarily
investigate the question and if it finds that the defence is a substantial one, it has a discretion to direct the creditor to establish his claim in an independent action. It has also an equal discretion to decide the dispute particularly in cases where the defence to the claim is insubstantial and once it is proved that the debt is due to the petitioning creditor, it should proceed with the winding-up petition.
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