GAUTAM ELECTRIC MOTORS Vs. FIRM SHANTILAL AND BROS

JUDGEMENT

(1.) This appeal is directed against the order of Hardy, J. admitting the petition of the respondent-creditor against the appellant-company under Section 433(e) read with clause (a) of sub-section (1) of Section 434 of the Companies Act, 1956 for the winding up of the appellant-company and directing this to be advertised in the newspapers.

(2.) Both the parties are commercial concerns having dealings with each other. By one transaction the appallant-company had purchased some Super Enamelled wire from the respondentcreditor. After paying the major portion of the price for the same, the appellant-company has to pay to the respondent-creditor the remainder of the price which according to the company is Rs. 22,087.27 and according to the respondent-creditor 4 27,484.21. By another separate transaction, the company had given about 30 tonnes of copper bars to the respondent-creditor to be fabricated into copper wire. The creditor deposited about three lakhs rupees as security with the company. The creditor has filed a suit in this Court against the company for the recovery of Rs. 5 lakhs in the second transaction, which is defended by the company. The defence of the company is that nothing is due to the creditor from the company and on the other hand Rs. 24,000.00 are due to the company from the creditor.

(3.) The creditor had also alleged that the company was financially insolvent, but the order of Hardy J. is based solely on the failure of the company to pay the admitted debt of Rs. 22,087.00 .07 within three weeks in response to the notice given by the creditor to the company under clause (a) of sub-section (1) of section 434 of the Companies Act and the appeal was argued on both the sides solely on the question whether this order was justified or not.