RANI AJITKUNVARBA Vs. RAJPUTANA COLD STORAGE LTD

JUDGEMENT

(1.) THIS is a petition by Rani Ajitkunvarba, Maharaj Digvijay Singh, and Rani Niranjan Kumari (to be hereinafter referred to as the first, second and third petitioner respectively) under sec. 162 of the Indian Companies Act for the winding up of the Company known as the Rajputana Cold Storage and Refrigeration Ltd. ( to be hereinafter referred to as "the Company".

(2.) THE facts, which are undisputed, are that the Company was registered at Jaipur under the Jaipur Companies Act in August, 1947. Its office is situate at Jaipur West. THE authorised capital of the Company is Rs. 10,00,000/-, which is composed of 4,000 5%, tax-free cumulative preference shares of Rs. 100/- each ( hereinafter to he referred to as preference shares ) and 60,000 ordinary shares of Rs. 10/- each. Out of the 4,000 preference shares 780 have been subscribed. On their account Rs. 75/- per share has been called up. Out of this amount Rs. 2,000/- remain in arrears, and, therefore, Rs. 56,5000/- have been paid up. Out of the 60,000/- ordinary shares, 36750 have been subscribed, and Rs. 7/8/- on account of each share have been called up. Out of this amount Rs. 23,000/-are in arrears, and therefore, the total Sum paid up on account of these shares is Rs. 2 52,625/ -. THE total of the paid up capital is Rs. 3,09, 125/ -.

(3.) UNDER sec. 162 of the Companies Act, a company can be wound up by Court, if the company is unable to pay its debts, and under sec. 163 (1) a company shall be deemed to be unable to pay its debts if, upon a service of notice by its creditor, to whom the company is indebted in a sum exceeding five hundred rupees, requiring the company to pay the sum so due, the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it, to the reasonable satisfaction of the creditor. It was argued by Mr. Gauba on behalf of the petitioners that notices under sec. 163 (1) were served on the company in respect of the pro-note as well as the amount of the deposits mentioned in the petition; but the Company failed to pay up those amounts for three weeks after the notice, and so the Company should be deemed to be unable to pay its debts, and the petitioners were entitled to an order for the winding up of the Company. It has been admitted on behalf of the Company that such notices were served, but it was argued that the Company cannot be said to have neglected to pay any of the said sums or to secure or compound for them to the reasonable satisfaction of the petitioners, as according to the petitioners themselves the claim for deposits did not arise on account of the execution of the pro-note, and with respect to the pronote there was a bona fide dispute, and the first petitioner had herself brought the Bombay suit for the recovery of the said sum, and the Company had raised sound and legal objections with respect to her claim. The petition was filled mala filed simply with a view to coerce the company into paying the said disputed amount and should therefore, be dismissed. Quite a number of authorities were referred to on behalf of the respondents in order to show that in case a debt is bonafide disputed the company cannot be said to have neglected to pay its debts simply because after demand the company had not paid the sum demanded within three weeks from the date of service of notice under sec. 163 (1 ). I shall refer to these rulings one day one in chronological order.