THAKUR PAPER MILLSLTD Vs. STATE

JUDGEMENT

(1.) N.L. Untwalia, J. 1. This is a petition under Section 433 of the Companies Act, 1956 (Act 1 of 1956) hereinafter called the Act by a person claiming to be a creditor of the Company named Thakur Paper Mills Ltd. having its registered office at Samastipur in the district of Darbhanga for winding up the Company on the ground that it is unable to pay its debts.

(2.) The petition for winding up was first presented in this Court on the 13th of April, 1966 showing in the cause title "Kai-lash Chand Jain, partner of M/s. Kailash Chand Jain & Co. Unnao". as the petitioner. An employee of the petitioner had sworn the affidavit in support of this petition. There were several defects pointed out in this petition by the office. It was, therefore, directed to be returned by U.N. Sinha. J., the learned Judge who was then in charge of the Company Cases to be refiled after removing the defects. The petition was re-filed on 2-8-66. An affidavit of Kailash Chand Jain, however, was filed on 12-9-66 wherein the contents of the petition, as previously filed, were verbatim repeated. This petition supported by the affidavit of Kailash Chand Jain was directed to be treated as a part of the original petition bv order No. 7 dated 4-11-66

(3.) According to the petitioner's case as made out in the petition for winding up, the Company was incorporated with the object of dealing in. and manufacturing, all kinds of finished papers besides other objects. In paragraph 6 of the petition it was stated that the Company was indebted to the petitioner to the tune of Rs. 20,000 besides interest amounting to Rs. 3,000 at the rate of 6 per cent, per annum. The amount was deposited by the petitioner with the Company as security for being appointed as the distributor of the Company, meaning thereby as distributor for distribution and sale of the Company's products. It was further stated that "the Company stopped the manufacture of papers and as such the petitioner had to close his business of distributorship". Out of the total amount of Rs. 23,000 due, a sum of Rs. 2,500 was adjusted towards the price of paper and a sum of Rs. 20.500 was due to the petitioner from the Company. In the 7th paragraph, it was stated that the petitioner applied to the Company for the payment of his debt by his notice of demand dated 1-4-64 served on the Company at its registered office on 3-4-64 by registered post. But the Company failed and neglected to pay the debt or any portion thereof. It had sent letters promising to refund the amount within a short time but nothing was paid. The petitioner then sent a notice of demand through his lawyer per registered post on 4-1-66, to which a reply dated 7-1-66 was received by the petitioner, intimating to him that the money would be refunded very soon but up till the presentation of the petition nothing was paid. Hence, according to the petitioner, the Company was unable to pay its debts within the meaning of Section 434 of the Act and was liable to be wound up.