O. O. C. J v. (Orig

A Company Petition for an order of winding up was filed by the Appellant under Sections 433 and 434 of the Companies Act, 1956. The claim of the Appellant was based on a lease 2 agreement dated 1st November, 1995 which was terminated by a letter dated 1st August, 1997. The Learned Single Judge noted that in reply to the statutory notice dated 1st August, 1997 two defences have been raised by the company on 11th August, 1997. The first defence was that despite the Appellant having agreed to furnish the original documents, those documents have not been furnished to the company. The second defence was that a fax has been received from the Appellant under which an amount of Rs.3,23,700/- was confirmed as being due and payable by the Appellant to the company whereas according to the statutory notice an amount of Rs.3,23,034/- was stated to be due to the Appellant by the company. In other words, the amount due from the Appellant to the company approximated to the amount claimed to be due from the company. The Learned Single Judge noted that the Company Petition does not categorically deal with the two defences to the statutory notice. This was a vital and important aspect since Section 434 of the Companies Act, 1956 provides for an order of winding up of a company on the ground that it is unable to pay its debts. The Learned Single Judge held that there was 3 thus a basic lacuna in the petition and granting an opportunity at that stage to amend the petition would amount to encouraging a practice of improper drafting of company petitions.