DALHOUSIE JUTE CO LTD Vs. MULCHAND LAKSHMI CHAND

JUDGEMENT

(1.) The main point for determination in this appeal is whether a petition for winding-up could be admitted by the company court on the basis of an unfiled award for money payable to -the award holder by the company. It is contended before us that in order to constitute a " debt'" within the meaning of Sections 433 and 434 of the Companies Act, 1956, the same must be immediately payable by the company in the sense that the creditor can come and claim the sum and, if refused, can immediately enforce payment thereof. That is not possible in the case of an unfiled award which can be enforced for payment only by the passing of a decree. That leads us to the determination of the question as to what is the effect of an unfiled award. Is the sum involved in the award immediately payable by the company to the award holder even prior to its filing and a decree being passed thereon ?

(2.) In this case after a money award had been passed on December 8, 1975, by the Bengal Chamber of Commerce and Industry against the company, inter alia, for a sum of Rs. 44,255.29 the respondent, Mulchand Lakshmi Chand, served a notice under Section 434 of the Companies Act, 1956, on the company requiring it to pay the sum awarded. On receipt of such notice, the appellant company expressed its intention to apply for setting aside the said award and called upon the petitioning creditor to cause the said award to be filed. Instead of filing the said award or taking any step in that regard, the petitioning creditor allowed the time covered by the said ' notice to pass and upon the expiry thereof, made the petition for winding up on the basis of the amount so awarded.

(3.) It is contended on behalf of the company that the original claim had merged in the award with the result that on the basis of the original cause of action the petitioning creditor could not have made an application for the winding-up of the company. The only course left open was to get a decree passed on the said award after filing the same and then to enforce it. The debt due, if any, is not immediately payable and the same would become payable after the decree would be passed under the provision of Section 17 of the Arbitration Act. Until that stage would arrive, the petitioning creditor could not have brought forward its claim against the company, nor could they have made a valid demand on the company under the provisions of Sections 433 and 434 of the Companies Act, 1956. It is also contended that if the award holder would be allowed to take recourse to the winding-up proceedings at that stage, then the company would hardly get any opportunity to get the award set aside after the same would be filed. At the same time the winding-up court would not be inclined to go into the question or examine the grounds for setting aside the award. All that the winding-up court could examine is whether the petition for winding-up is an abuse of the process of the court or whether the company has raised a bona fide dispute on the basis whereof an order for winding-up might be refused.