Saul K. Roy Chowdhury, J. - (1.) This is an application for stay of winding up of the company. The facts shortly are that the company was incorporated on December 29, 1953, as a private company and is existing within the meaning of the Companies Act, 1956. The registered office of the company is situate at 12, Gray Street, Calcutta. It appears that the petitioning-creditor obtained an ex parte decree on January 5, 1973, in this court for a sum of Rs. 13,781.25 together with interest and interest on judgment at the rate of 6% per annum and costs as that of a defended suit until it was defended and thereafter as an undefended suit. The petitioning-creditor by a notice dated May 26, 1973, under Section 434 of the Companies Act, 1956, through his solicitor demanded the payment of the said decretal amount together with interest and costs thereon as provided in the said decree. The company having failed to pay the said sum of the petitioning-creditor on December 5, 1973, the winding-up petition was presented which was made returnable on December 11, 1973. On the returnable date it was adjourned till December 17, 1973, directing the petitioning-creditor to serve the notice on the company. Then again, on December 17, 1973, the matter was adjourned till January 7, 1974. On January 7, 1974, the matter was directed to appear for settlement on January 16, 1974. As the matter could not he settled, the petition was admitted and direction for advertisement was given on January 16, 1974. Thereafter, on February 11, 1974, the present application was made for stay of the winding up and I passed an ad interim order of stay on the company for depositing a sum of Rs. 3,000 with the petitioning-creditor's solicitor and on such deposit being made, ad interim stay in terms of prayer (c) was granted and direction for filing affidavits was also given and the matter has come up for hearing before me.
(2.) Mr. Bimalesh Chatterjee appearing for the company submitted that the claim of the petitioning creditor being based on a decretal claim, the application for winding up is not maintainable in view of the provisions of Section 434 of the Companies Act, 1956, as the petitioner should have proceeded by way of execution of the decree and then and then only he could have come under Section 434(1)(b) of the Companies Act, 1956. In short, his submission is that without executing the decree he has no right to file the winding-up petition. According to his interpretation of Section 434 of the Companies. Act, 1956, whenever there is a decree, it must come under Section 434(1)(b) of the Companies Act, 1956, and in the absence, it cannot be said that the company is unable to pay its, debts within the meaning pf the said Section. He has referred to the High Court Rules and also the Civil Procedure Code and the Rules, regarding the execution of the decree and the Rules relating thereto. Further, he submitted that the company was in difficulties and now it is improving and has a bright future as the customers of the company are like I.C.I. (India) Private Ltd., Metal Box Company of India Private Ltd., Railways, Defence Department of the Government and various other concerns. The turnover of the company is also quite substantial and there is a prospect of the company earning huge profits in future to pay off all its liabilities including that of the decretal claim of the petitioning-creditor. As an alternative, he submitted that if the court does not accept his submission, as to the maintainability of this winding-up petition being premature and misconceived on the above submissions, then the company should be given some time to pay off the claim of the petitioning-creditor so that the company may survive. The company is also expecting financial assistance from various financial institutions and they will be in a position to pay off the claim of the petitioning-creditor within a reasonable time. Therefore, the winding-up petition should be stayed to enable the company to pay off its liabilities as he submitted that if once the winding-up petition is advertised, it will cause great injury and loss to the company and will affect its working which is now showing progress and bright future.
(3.) Mr. Hirak Mitra, appearing with Miss Sakuntala Rao for the petitioning-creditor, submitted that the company has no bona fide defence to the claim of the petitioning-creditor. Right from the beginning the claim of the petitioning-creditor cannot be disputed and it has not been disputed in any way by the company. He further submitted that it is not necessary when the creditor has a decree to execute the same before he can make an application for winding up of the company. He submitted that Section 434(1)(a) makes it clear that any claim of the creditor, if it remains unpaid for a period of three weeks after serving the notice, the company should be deemed to be unable to pay its debts. He further submitted that there is no dispute as to the company having been served with notice under Section 434 and in spite of such notice they have failed to pay the decretal amount together with costs and interest as demanded in the said notice. He further submitted that the company has taken time to pay off the debt and in fact the matter was put in the list for settlement. Ultimately, the company has not paid the amount. Subsequently, it made this application for stay only to delay the proceedings as long as possible. He further submitted that the claim of the petitioning-creditor, which ultimately resulted in the decree dated January 5, 1973, originated in 1968, on account of price of goods sold and delivered. The petitioning-creditor is waiting for such a long time and has not been paid. He further submitted that when the company was in difficulty and if it has got such prospect as it has been stated in the affidavit in support of the stay application, there should not be any difficulty for the company to pay off the said sum due to the petitioning-creditor under the said decree together with interest and costs.;