- (1.) THE appeal is directed against a judgment and order dated 22nd February, 2012 by which the learned Company Court disposed of the winding up petition by relegating the petitioning creditor to a suit subject to security being furnished by the company. To be precise, the order is as follows; - "In view of my above findings, I am of the opinion that the company has been unable to disclose any bona fide defence to the claim of the petitioning creditor. However, using my discretion as permitted by the case of M/s. Mechalee Engineers & Manufacturers v. M/s. Basic Equipment Corporation reported in : AIR 1977 SC 577 I give an opportunity to the company to prove its defence. I relegate the petitioning creditor to a suit to recover the claimed sum, but, upon the company furnishing security. I direct the company to furnish within four weeks from date a bank guarantee in favour of the petitioning creditor by a nationalised bank for a sum of Rs. 2,92,01,970.41 and to keep it renewed until contrary orders are passed by any court. The petitioning creditor will file a suit claiming the sum claimed in the winding up application within four weeks of furnishing of the above security by the company. In default of the company furnishing security, the petitioning creditor may apply to this court for admission of the winding up application. In that event, no further prima facie case need be established by the petitioning creditor. Only proof of default has to be established."
(2.) AGGRIEVED by the order, the petitioning creditor preferred an appeal contending that the winding up petition should have been admitted. The Appellate Court did not interfere, inter alia, on the ground that: - "In a case where a litigant invokes the discretionary power of the learned Judge and the learned Judge uses such power in one way the litigant cannot complain that it should have been other way round unless such exercise was so perverse that it would require correction by the Court of Appeal. Right to claim winding up as statutorily provided, is a discretionary remedy. Learned Single Judge exercised discretion in one way. If we independently consider the controversy we might exercise our discretion contrary to what was observed by the learned Single Judge. Being a Court of Appeal we are not competent to do so. The duty of the Court of Appeal is to see whether discretion is properly and judiciously exercised by the Learned Judge. If the result of the test is positive interference is not warranted. We cannot substitute our independent views on the controversy sitting in a Court of Appeal. It is nobody's case that the discretion was used perversely or de hors the Statute."
(3.) THE petitioning creditor preferred a special leave petition challenging the Appellate Court's order, which was allowed by the Apex Court and the matter was remanded for re -hearing. The order passed by the Apex Court is as follows as far as the same is material for our purpose: - - "Though the Division Bench of the High Court agreed with the learned Single Judge that the defence of the respondent lacked credibility and was not bona fide, it declined to interfere with the order of the learned Single Judge on a wholly erroneous premise that while hearing an appeal against the order of the Company Judge, the Division Bench of the High Court does not have the jurisdiction to interfere with the discretion exercised by the Company Judge even though the same may be contrary to the law laid down by this Court. Like the learned Single Judge, the Division Bench also applied the principle laid down by this Court for exercise of power under Order XXXVIII C.P.C. and held that the interest of the appellant can adequately be protected by asking the respondent to furnish bank guarantee....... In our view, the reasons recorded by the learned Single Judge and the Division Bench for dismissing the winding up petition filed by the appellant are legally unsustainable and the impugned order is liable to be set aside.";