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Banaras Beads Limited vs Prashant Glass Works Private Limited on 5 March, 2002 cites

Amalgamated Commercial Traders (P.) ... vs A.C.K. Krishnaswami And Anr. on 8 January, 1965

The question whether the respondent-company is entitled to realise the rent and the interpretation of agreement between the parties, and further the fact that the rent due towards flat No. 72 cannot be recovered due to laches on the part of the respondent-company, are not to be decided by this court in a creditor's winding up petition. The company petition for winding up with a view to enforcing payment of a disputed debt is an abuse of the process of the court, and should be dismissed, unless of course, it is shown that the alleged dispute is not a bona fide one, for a winding up petition is not to be used as machinery to try a common law action. In Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp Cas 456, the Supreme Court said that if a debt is bona fide disputed, there cannot be "neglect to pay" within Section 434(1)(a) of the Companies Act, and if there is no neglect, the deeming provision does not come into play, and thus the ground of winding up that the company is unable to pay its debts is not substantiated. No other authority needs to be cited on this well settled proposition, and has been applied as a test in a creditor-winding up petition by all the courts. The decisions cited by Sri R.P. Agarwal are not applicable to the facts of the present case. In Advent Corporation Pvt. Ltd., In re [1969] 39 Comp Cas 463 (Bom) a consent decree was passed whereby the respondent-company agreed to pay the amount in instalments on specific dates. On the same day an agreement was entered into between the petitioners and the company for the purchase of the top floor of the building, being constructed by the respondent-company. The company failed to pay two of the instalments and ignored the notice Section 434(1)(a) of the Companies Act and filed a suit for permanent injunction restraining petitioners from taking any action in pursuance of the notice. On the said fact, it was held that there was no bona fide dispute regarding debt.
Supreme Court of India Cites 9 - Cited by 209 - Full Document

K.T.S. (Singapore) Plc. Ltd. vs Associated Forest Products (Pvt.) Ltd. on 18 January, 1993

In K.T.S. (Singapore) PLC Ltd. v. Associated Forest Products (Pvt.) Ltd. [1996] 85 Comp Cas 190, the Calcutta High Court held that allegations of defective material, the right to a discount, and the entitlement to damages were known to the company. No steps were taken to realise any part of such loss or to assert the right to discount and unconditional acknowledgment of the liability to pay the entire amount was made by the respondent-company by telex message and memorandum of understanding and also the document of guarantee, and that respondent-company did not choose to give reply to the statutory notice and in the aforesaid circumstances, it was held that the debt was due and thus the court rejected all other defence. The presumption of insolvency was raised and winding up was admitted. Both the aforesaid cases decided by the Bombay High Court and the Calcutta High Court are distinguishable on the facts, In the present case, there is no acknowledgment of debt. The respondent-company never, by conduct or by inference, admitted the liability. On the contrary, the petitioner-company could not deny that the rent was due, but tried to defend its liability on the ground that it cannot be made the subject matter of adjudication in this proceeding.
Calcutta High Court Cites 17 - Cited by 9 - R Pal - Full Document
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