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P.R. Doraiswami Ayyar Vs. Coimbatore Easwara Sahaya Nidhi Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai
Decided On
Reported inAIR1929Mad265
AppellantP.R. Doraiswami Ayyar
RespondentCoimbatore Easwara Sahaya Nidhi Ltd.
Excerpt:
- .....entitled to a claim against this money because under the articles of association and rules of the company, that money is deposited as security as it were for the conduct of the depositor, the secretary in this case, and that where a director has negligently recommended clients to the bank, the bank is entitled to claim against that director any loss occasioned by such recommendation. this is denied by the petitioner but there is an issue with regard to that. i cannot say that there is no bona fide dispute as to the company's liability to pay this debt. courts will never allow creditors of a company to invoke the assistance of the companies act for getting payment of their debt. if there is a genuine dispute with regard to the debt, then the creditors of the company must be referred to a.....
Judgment:

Beasley, J.

1. The petition for winding up is dismissed The only ground seriously put forward is that there is a debt owing to the petitioner, the payment of which he has demanded and there has been a failure by the company to comply with that demand within 21 days, the statutory period, and that entitles the petitioner to come before the Court and ask as a matter of right for the winding up of the company. It is vague statement made in the petition about the company being unable to pay its debts. That is not supported by a single figure or by any fact which will enable me to come to the conclusion that the company is not able to pay beyond its failure to comply with the statutory demand. That is not sufficient. The company in its affidavit puts forward the defence whilst submitting that the money is with it in fixed deposit that it is entitled to a claim against this money because under the Articles of Association and Rules of the Company, that money is deposited as security as it were for the conduct of the depositor, the Secretary in this case, and that where a Director has negligently recommended clients to the Bank, the Bank is entitled to claim against that Director any loss occasioned by such recommendation. This is denied by the petitioner but there is an issue with regard to that. I cannot say that there is no bona fide dispute as to the company's liability to pay this debt. Courts will never allow creditors of a company to invoke the assistance of the Companies Act for getting payment of their debt. If there is a genuine dispute with regard to the debt, then the creditors of the company must be referred to a suit. In this case, the petitioner will be referred to a suit. As the company admits having in its possession the money which, subject to its defence,' is money belonging to the petitioner, the company will have to pay that money into this Court within one week after the re-opening of the Court. If the money is not paid into Court within that time, the petitioner is at liberty to come before this Court with a fresh application. No order as to costs.


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