Salil Kumar Roy Chowdhury, J.
1. This is an application for the winding up of the company under Sections 433, 434 and 439 of the Companies Act, 1956.
2. This petition has a chequered career as the winding-up petitioner was presented on 10th June, 1970, and the same was admitted on 16th June, 1970, and fixed for hearing on 29th June. 1970.
3. The claim of the petitioning creditor arises out of money lent andadvanced for the purpose of the business of the company being a sum ofRs. 3,00,000 and the repayment of the said loan and interest was securedby a second charge created on the assets of the company by a registeredmortgage and at the time of filing of the winding-lip petition the claimwas Rs. 3,99,936.09 inclusive of interest up to 31st December, 1969, particulars of which are set out in para. 8. It appears that the company inits balance-sheets for the years 1961-67 duly acknowledged its liabilityto the petitioning-creditor company and also by a letter dated 21st June,1968, the company confirmed and acknowledged its liability to the petitioning-creditor company in writing for a sum of Rs. 3,88,174.03 as on31st December, 1967. As the company failed and neglected to pay theloan together with interest to the petitioning-creditor company, Ultimately a statutory notice under Section 434 of the Companies Act, 1956, dated12th/13th March, 1970, was served by the petitioning-creditor companyon the company at its registered office on 16th March, 1970, by the advocate-on-record of the petitioning-creditor company. The companystrangely enough by its letter dated 8th April, 1970, replied to the statutory notice alleging that there did not appear to be any such transactionbetween the company and the petitioning-creditor in the records of thecompany. The petitioning-creditor by its letter through its advocate-onrecord dated 30th April, 1970, denied the allegations in the said reply tothe statutory notice of the' company, asserting the liability of the company to the petitioning-creditor and alleged that the said allegations ofthe company in the letter dated 8th April, .1970, were incorrect and untrue as the said loan was a running loan from year to year and dulyshown in the balance-sheets of the company as hereinbefore stated andthe company was confirming the liability to the petitioning-creditor up tothe year 31st December, 1967. It also appears that the said letter dated8th April, 1970, by which the company denied the claim of the petitioning-creditor which was demanded by the statutory notice was signed byone of the then directors of the company being Mr. S.N. Sarogee, whowas himself a signatory to the balance-sheet for the year ending 31stDecember, 1967, which was signed on 25th June, 1968, and the auditorsreport on the said balance-sheet was signed on 3rd June, 1968, where theauditors have observed that in their opinion the papers, books of account,etc., have been kept by the company as required by law as appeared tothem from the examination of those books. Thereafter, it appears thatby an affidavit affirmed on 27th July, 1970, the said S.N. Sarogee, as a director of the company, filed an affidavit-in-opposition, inter alia, alleging that the petitioning-creditor had not alleged as to when the said sum of Rs. 3,00,000 was lent and advanced to the company and the deeds of mortgage referred to in the winding-up petition was not annexed to the winding-up petition and called upon the petitioning-creditor to produce the said deed of mortgage and it was further alleged that the petitioning-creditor company and the company along with several other companies were under the same management of which M/s. Goenka & Co., was the managing agent which was,controlled by Chirimars and the directors of the -petitioning-creditor company and the defendant company and other companies were under the same management and had common directors and purported to show various loans and advances by Goenka Commercial Bank Ltd. to the said several companies and they were fraudulently shown to be such loans to the company although in fact no such sum was actually lent or advanced. Thereafter, the Goenka Commercial Bank Ltd. was prohibited from carrying on banking business and by an order of this court on 17th May, 1970, the Goenka Commercial Bank Ltd. was directed: to be wound up. The petitioning-creditor company as the, successor-in-interest of the said Goenka Commercial Bank Ltd. after taking several steps for reviving the business of the company and changing its name. It was alsp alleged by the said S. N. Sarogee. that the said Chirimars directors having; lost their control over the respondent company and other companies, were now. seeking to put, pressure on the company and extort money from the company and the company bona fide disputed the claim of the petitioning-creditor. The letter of confirmation dated 21st June, 1968, by the company in favour of the petitioning-creditor which was signed by S.N. Sarogee as a director was denied and disputed and it is alleged that the same was written for income-tax purposes as a result of fraud practiced upon the company and, therefore, the said letter did not amount to a letter of acknowledgment and confirmation of the liability of the company to the petitioning-creditor. It was further alleged that the Chirimars and their group were acting in collusion and conspiracy with others, and have procured and manipulated various documents including the said letter dated 21st June, 1968, for the purpose of creating evidence in favour of the petitioning-creditor. It was alleged that, until 15th March, 1968, the company was managed by Chirimars and particularly by one Dhanoolal Chirimar and Purusatyam Das Ghirimar. In substance, the dispute was that the loan was fictitious and the documents were brought into existence by the Chirimars to foist the liability on the company wrongfully and fraudulently and it was submitted that the petition was lacking in material particulars and as such demurrable and the application was mala fide and misconceived and was a gross abuse of the process of the court.
4. To the said affidavit-in-opposition filed on behalf of the company affirmed by the said S.N. Sarogee, the then director, an affidavit-in-reply was filed giving particulars of the loan and the debt and the mode and amount of repayment by the company from time to time in the affidavit-in-reply filed by one Shanti Lal Shaw, a director of the petitioning-creditor company, affirmed on 5th September, 1970. In substance the allegations made by the said S.N. Sarogee, the then director of the defendant company, was denied and the letter of confirmation and the acknowledgment and the balance-sheet of the company were referred to in which the debt due to the petitioning-creditor company by the respondent company was duly acknowledged in no uncertain terms and the control of the companies by the Chirimars was denied save and except that the said Dhanoolal Chirimar was a director of the company and it was also denied that the said loan was fictitious and brought into existence fraudulently as alleged in the affidavit-in-opposition filed on behalf of the company through the said, the then director, S.N. Sarogee. A copy of the mortgage deed dated 17th March, 1951, was also annexed to the affidavit-in-reply filed on behalf of the petitioning-creditor company through the said Shanti Lal Shaw, a director of the petitioning creditor company, affirmed on 5th September 1970, being annex. A thereto.
5. The facts of the relevant list of dates may be useful for appreciating the nature of defence or the merits of the disputes sought to be raised by the company which appears to have changed hands several times regarding the management and, ultimately, it has come into the hands of the present management during the period the present winding-up application is pending. On 13th June, 1945, Goenka Commercial Bank Ltd. was incorporated and on 19th March, 1949, the respondent company, Pandam Tea Co. Ltd., was incorporated. It appears that at the time both the companies were under the same management or at least had common directors. On 17th March, 1951, the deed of mortgage was executed by Pandam Tea Co. Ltd. in favour of Goenka Commercial Bank Ltd., which recorded the loan transactions between the said Goenka Commercial Bank Ltd. and the respondent company and the said deed was registered as it had created a charge on the properties of the respondent company by way of security. In 1955 the RBI prohibited Goenka Commercial Bank Ltd. from carrying on banking business. In September, 1961, the Chirimars for the first time joined the said Goenka Commercial Bank Ltd. as directors. On 6th February, 1964, the respondent company confirmed as on 31st December, 1963, a sum of Rs. 3,79,460.47 was due and payable to the Goenka Commercial Bank Ltd. Thereafter, in or about April, 1967, the name of Goenka Commercial Bank Ltd. waschanged to the present name of the petitioning-creditor, being Darjeeling Commercial Company Ltd. Thereafter, on 3rd June, 1968, the respondent company admitted its indebtedness to the petitioning-creditor company in its balance-sheet for the year ending 31st December, 1967. It may be noted that since 1951-67 the respondent company acknowledged the liability specifically stating the amount due to the petitioning-creditor company in its balance-sheets year after year, which were duly passed in the annual general meetings as a subsisting liability. Then on 21st June, 1968, the respondent company admitted its liability to the petitioning-creditor company in writing for a sum of Rs. 3,88,174.03 as on 31st December, 1967. It may be noted that thereafter a change of management took place in the board of directors of the respondent company and in the subsequent balance-sheet the said sum was described as unconfirmed liabilities, possibly inspired by some judicial decision which has held that such a liability cannot be said to be an admitted liability when it is qualified like the words ' unconfirmed '. Thereafter, on 12th/ 13th March, 1970, the petitioning-creditor caused a statutory notice under Section 434 of the companies Act, 1956, to be served on the respondent company and on 8th April, 1970, the respondent company replied through its then director, S.N. Sarogee, alleging that from the records of the respondent company it appeared that there had been no loan transaction between the petitioning-creditor company and the respondent company and it was further alleged that one Purusatam Lal Chirimar had all along been a director of the respondent company and had been in actual management of its affairs and the said Chirimar was then a director of the petitioning-creditor company and caused the said demand letter to be issued. Therefore, the respondent company asked the petitioning-creditor company to furnish the full particulars of the said loan and the mortgage and repayment, if any, and, thereafter, would deal with the same. Then, on 19th January, 1971, the present winding-up petition came up for hearing before K.L. Roy J. before this court. By an order dated 26th November, 1960, which was passed in the suit filed by the respondent company against the petitioning-creditor company in the Court of the Subordinate .judge at Darjeeling on 25th November, 1970, for a declaration that the petitioning-creditor company was not a lawfully constituted incorporated body and had no lawful existence and for a cancellation of the said mortgage bond dated 17th March, 1951, and for costs in which an ad interim order of injunction was passed by the Sub-Judge, Darjeeling. restraining the petitioning-creditor company from proceeding in any action whatever on the basis of the demand notice. The said order was considered by K.L. Roy J. and, thereafter, on 19th January, 1971, directions for advertisement were given but it was stayed for three weeksin order to enable the respondent company to proceed according to law.On 9th November, 1971, the respondent company made an applicationfor stay of the winding up in which on 15th March, 1971, amdavit-in-opposition was filed by the petitioning-creditor company affirmed by one BijoyKumar Chirimar and on 26th March, 1971, affidavit-in-reply was filed onbehalf of the respondent-company by one Biswa Bandhu Bhttacharya, adirector of the respondent company at that time. On 13th May, 1971, thesaid stay application of the respondent company was dismissed byS.C. Ghose J. (Pandam Tea Co. Ltd., In re  45 Comp Cas 67 (Cal)),by awell considered judgment also dealing with the question of limitation andthe fraudulent nature of the alleged loan of the petitioning-creditor company to the respondent company and also that both the companies were atthat time under the same management having common directors. On 24thJune, 1974, the respondent company preferred an appeal from the saidorder of refusal to stay. In the meanwhile, on 12th July, 1973, the suitfiled by the respondent company against the petitioning-creditor inDarjeeling being Suit No. 50 of 1970 (Pandam Tea, Co. Ltd. v. DarjeelingCommercial Co. Ltd.] was dismissed with costs. On 25th November, 1975,appeal of the respondent company against the order of Mr. Justice Ghosedismissing the stay application ( 45 Comp Cas 67 (Cal)), was alsodismissed with costs which judgment is reported in Pandam Tea Co. Ltd.v. Darjeeling Commercial Co. Ltd.  47 Comp iCas 15 ;  80 CalWN 172. On 27th January, 1976, affidavit-in-opposition was filed inthis application by one Swapan Roy on behalf of the respondent companyopposing the present winding-up application. On 3rd February, 1976, anaffidavit was filed on behalf of Swaika Oil Mills Ltd. as a supportingcreditor in the winding-up petition. On 23rd February, 1976, affidavit-in-reply was filed in the present winding-up application by the petitioning-creditor. On 23rd February, 1977, Ajoy K. Basu J., inter alia, passedan order for a stay of the winding-up petition for six months. On 23rdMarch, 1977, the petitioning-creditor company preferred an appeal fromthe said order of Ajoy Kumar Basu J. On 17th August, 1978, thesaid appeal was allowed and on 21st August, 1979, special leave petition made by the respondent company was dismissed. On 31st March,1980, a winding-up order was made by me. On 5th May, 1980, on mentioning the said winding-up order was withdrawn. On 2nd June, 1980,directions for filing affidavits were given and the matter was adjournedtill 10th June, 1980. Thereafter, the matter appeared in the list butcould not be taken up for one reason or other and finally it was heardat length.
6. Mr. Jayanta Mitter, appearing for the petitioning-creditor, referred me to the paper-book of the appeal being Appeal No. 98 of 1977 (Darjeelitig Commercial Co. Ltd. v. Pandam Tea Co. Ltd.) where all the pleadings and documents used by the company since the inception of the winding-up proceedings are available. He referred to page 87 of (the paper-book where the mortgage, deed of 1951 is set out and also to the winding-up petition and the letters of admission, pp. 7 & 14 of the said paper-book. He also produced the balance-sheets of the respondent company from 1951 to 1967 where it has been specifically admitted that the respondent company was indebted to the petitioning-creditor company in respect of the amount which is the subject-matter of the winding-up petition as a secured debt. The last balance-sheet was signed as would appear from the directors' report which is dated 25th June, 1968, and from the auditors' report which is dated 3rd June, 1968, and the acknowledgment in writing by the respondent company is dated 21st June, 1968, which is at page 11 of the said paper-book. The winding-up petition was presented on 10th June, 1970, that is, well within the period of limitation from the last acknowledgment of liability in writing by the respondent company. He also referred to the affidavit-in-opposition of Shanti Nath Sarogee affirmed on 27th July, 1970, in the stay application which are at pages 68-75 of the Said paper-book, the only, defence sought to be raised is that the petitioning-creditor company has not given particulars of the said loan of RS. 3,00,000 and it does not appear from the records of the respondent company that the money was lent and advanced by the petitioning-creditor to the respondent company on mortgage and there was a general denial of the claim of the petitioning-creditor. He also referred to the stay application at page 153 specially at page 155 of the paper-book and also at page 70. Mr. Mitter referred to the plaint filed by the respondent company against the petitioning-creditor at Darjeeling which is at page 205 and the said suit was dissmissed on 12th July, 1973, a would appear at page 138 of the paper-book being the order sheet in the said Darjeeling Suit. Mr. Mitter also referred to the afndavit-in-reply filed on behalf, of the petitioning-creditor at pages 117, 126, 128 and 129 and submitted that the claim of the petitioning creditor has not been bona fide disputed by the respondent company. He also referred to the judgment of S.C. Ghose J. (Pandam Tea Co. Ltd., In re  45 Comp Cas 67 (Cal) at pages 224 and 226 of the said paper-book where the question of the petitioning-creditors' claim being barred by limitation as is sought to be raised in this winding-up petition again at this stage has been dealt with as the pleas were identical and, thereafter, he also referred to the Appeal Court's judgment which is at pages 244 and 246 upholding the judgment of S.C. Ghose J. and rejecting the pleas of the respondent company in respect of the said question of limitation. It has been specifically held by Mr. Justice Ghose and also by the Appeal Court that there was clear and unequivocal admission of the debt in the balance-sheets of the respondent company. Mr. Mitter also referred to page 140, where the judgment of A.K. Basu J. in the said paper-book, and also at pages 99 and 102, supara. (d) being the affidavit-in-opposition of Swapan Roy affirmed on 27th January, 1976, particularly at para^ 7(d) at page 102, where it is alleged that the mortgage deed dated 17th March, 1951, executed by the respondent company in favour of the petitioning-creditor company was signed by the common directors being R.N. Agarwala and other directors who signed the said mortgage deed being P.K. Ghosh who is alleged to be a henchman and nominee of the Goenka family and Chirimar family. Mr. Mitter also referred to sub-paras, (g) and (h) of para. 7 of the said affidavit-in-opposition filed on behalf of the respondent company and affirmed by Swapan Roy, a director of the respondent company, where the reference to the suit filed by the respondent company in the subordinate judge's court at Darjeeling is referred to but the said suit had already been dismissed on 12th July, 1973, as hereinbefore stated. In sub-para, (h) of para. 7 the said Swapan Roy alleged that until March, 1965, the respondent company was being managed by the Chirimar directors who were the directors of the petitioning-creditor company and the Chirimars having lost the control since then have started to put pressure through other companies including the petitioning-creditor company to extort moneys from the respondent company with an ulterior motive. Mr. Mitter, therefore, submitted that the nature of the dispute sought to be raised is that the claim of the petitioning-creditor being the-loan ot Rs. 3,00,000 on the said mortgage deed dated 15th March, 1951, is barred by limitation as no particulars of the Origin of the said loan are given. Secondly, the said loan is fictitious and, thirdly, the Chirimars were the common directors up to 1965 and they had created this loan fictitiously and now with a view to put pressure has brought this winding-up petition. Mr. Mitter also referred to the supporting affidavit of B.K. Swaika, who is admittedly a creditor of the company, which is at pages 109 and 113 of the paper-book. The claim is to the extent of Rs. 63,620.67 as on 9th July, 1975, and since then with interest it has gone up.
7. Mr. T.K. Basu, appearing for the Central Excise, and supporting thewinding-up petition referred to the affidavit of Himangsu Ghosh paras 10,11-19; but admittedly a sum of Rs. 1,53,000 is still due and payable bythe company on account of excise duty and the company's cheque-inpurported payment has been dishonoured.
8. Mr. S.B. Mukherjee, appearing with Mr. R.N. Ghosh, for the respondent company, first submitted that there cannot be any question of res judicata regarding the contentions which are now raised by the company, that is, the claim of the petition ing-creditor is barred by limitation as there are no particulars on which date the loan was given and whether acknowledgments were within the period of limitation. Mr. Mukherjee drew my attention to para. 7 of the winding-up petition and that there is no particular as to the date and the manner in which the said loan of Rs. 3,00,000 was advanced. In para. 8 of the winding-up petition nothing is stated about the rate of interest. He also referred to paras. 10-13 and submitted that the said pleading does not save limitation as to the alleged claim of the petitioning-creditor against the respondent company. He referred to pages 12, 14 and 66 of the paper-book being the statutory notice and reply thereto and the petitioning-creditor company's reply and submitted that from the said letter no particulars as to the date when the advance of Rs. 3,00,000 was made by the petitioning-creditor company to the respondent company and as to when the acknowledgment was made in writing by the company are available. On the other hand, the respondent company asked for particulars of the said loan and denied any loan transaction between the petitioning-creditor company and the respondent company. But inspite of that the petitioning-creditor company has not furnished any particulars yet and, therefore, the said claim of the petitioning-creditor should be held to be barred by limitation. He further submitted that there is a delay of 20 years on the part of the petitioning-creditor not going to court for realisation of alleged dues from the respondent company as the loan is alleged to be recorded in the said deed of mortgage in 1951. He referred to pages 87 and 90 of the paper-book. Mr. Mukherjee then submitted, drawing my attention to pages 96 and 1,33 of the paper-book, as to the appointment of directors of the company, wherefrom it will appear that at a certain point of time there were common directors between the petitioning-creditor company and the respondent company. He also referred to the affidavit-in-opposition at page 98 of the paper-book, paras. 5, 7, 9 and 12, and to the affidavit-in-reply at page 188 of the paper-book, para. 9, and submitted that in spite of a specific denial the petitioning-creditor company has not furnished any particulars or produced all the evidence in respect of its claim showing that the alleged claim is not barred. It is submitted that there were common directors of the company and, therefore, it must be held at this stage that the alleged loan is fictitious and brought into existence fradulently and the same is now disputed by the petitioning-creditor company at the time of final hearing of the winding-up petition at this stage.
9. Mr. Mukherjee thereafter commented on the winding-up petition which should have disclosed all the relevant facts and there being no such material facts pleaded in the petition it must be held to be not maintainable. He referred to Buckley on the Companies Acts, 13th edn., at p. 71, and drew my attention to the following passage :
'An order will not be made if a sufficient case is not stated on the petition, even if such a case is proved in evidence. The order must be made secundum allegata ei probata,'
10. Therefore, Mr. Mukherjee submitted that the winding-up petition must show documents and other materials that the claim of the petitioning-creditor is not barred on the face of it. He submitted that the judgment in the stay application and also the judgment in the Appeal Court from the said judgment of the trial court for the stay application cannot be res judicata. He referred to the recent decision of the Division Bench of this court in Rangpur Tea Association Ltd. v. Burdwan-Katwa Railway Ltd., where it has been repeatedly held that the judgment in the stay application in a windirig-up petition is not res judicata at the hearing of the winding-up petition. Mr. Mukherjee thereafter referred to the decision in Pandam Tea Co. Ltd., In re, : AIR1974Cal170 , where Sabyasachi Mukharji J., in the winding-up application of Raghu Nath & Sons P. Ltd., who is also a supporting creditor in this application, now being heard, observed that a winding-up petition was not admitted on the ground that the claim of the petitioning creditor, Raghu Nath & Sons P. Ltd., was alleged to be barred. But that case was entirely different from the present one. In that case the balance-sheet for the year ending 31st of December, 1968, of the company showed the claim of the petitioning-creditor as unconfirmed and also in the directors' report it was alleged that the claim of the said petitioning-creditor was barred by limitation and not confirmed by the directors. In that view of the matter it was held by Sabyasachi Mukharji J. that there was a bona fide dispute and the balance-sheet was not an acknowledgment as the debt was qualified and not admitted. In the facts of that case the learned judge held that it was not possible to say that there was an acknowledgment of liability in the balance-sheet, of itself, and, therefore, there was a bona fide dispute raised by the company and the winding-up petition was not admitted. Regarding the admission in the balance-sheet Mr. Mukherji cited several decisions-: In Consolidated Agencies Ltd. v. Bertram Ltd.  AC 470 ;  3 All ER 282 (PC), which was a suit by a director against the company for realisation of the remuneration and the acknowledgment in the balance-sheet came up for consideration. Then, again he referred to In re Transplanters (Holding Company) Lid.  2 All ER 711, which was also a claim by a director and there being com- mon directors between the two companies, the acknowledgment was heldto be not valid and Mr. Mukherjee submitted relying on the principlethat the acknowledgment of a sister concern will not be a valid acknowledgment unless it is proved by other materials. Mr. Mukher jee also referred to the decision in Petlad Turkey Red Dye Works Co. Ltd. v. Dyes,andChemicals Workers', Union, : (1960)ILLJ548SC , and submitted that it cannot always besaid that the balance-sheet contains correct statement for various reasonsin the circumstances of a particular case. The burden of proof,Mr. Mukherjee submitted, is always on the petitioning-creditor to showthat the claim is not-barred. He also referred to a Supreme Court decision in Management of Consolidated Coffee Estate Ltd. v. Workmen 2 Lab LJ 576, paras. 3, 8 and 10 where the question of admission in thebalance-sheet came up and the previous decision of the Supreme Court inPetlad Turkey Red Dye Works Co, Ltd. v. Dyes and Chemicals Workers' Union, : (1960)ILLJ548SC , was referred to and the correctness in the balance-sheet was disputed regarding the claim of the workmen.Therefore, Mr. Mukherjee submitted that, since 1968, in the balance-sheetof the company, the alleged debt due to the petitioning-creditor is remarked as unconfirmed. But he had to admit that up to 1967, the balance-sheet itself admitted the liability without any qualification and, therefore,it cannot be disputed up to that period and in my view, which I willdiscuss later, that from 1951 to 1967, the balance-sheets in unqualifiedterms acknowledged the liability to the petitioning-creditor company bythe respondent company, which was passed by the shareholders of therespondent company according to law, and that must be held to be, abinding and a subsisting liability. Mr. Mukherjee repeatedly submittedthat the petitioning-creditor must produce evidence of the loan and thatit is a subsisting liability, at the date of the winding up petition. He alsoreferred to the decision in Amalgamated Commercial Traders (P.) Ltd. v.A.C.K. Krishnaswami  35 Comp Cas 456 (SC), where the followingobservation occurs (at p. 463):
'It is well-settled that 'a winding-up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding-up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some sub- stantial ground, the court may decide it on the petition and make the order.' (Vide Buckley on the Companies Acts, 13th edition, page 451). '
11. He also submitted that the supporting creditors are Raghu Nath & Sons who have obtained an ex parte decree against the company which is now under challenge and the said proceeding is pending. He further submitted that regarding the other supporting creditor, Central Excise Dept., their liability is admitted but a portion of the liability is disputed and it can be arranged by the company for payment by instalment or otherwise. Therefore, in the facts of this case, the winding-up petition should be dismissed or at least no order should be made by this court.
12. Mr. Jayanta Mitter submitted in reply that in the balance-sheets of the company from 1952 to 1967, which were produced before the court at the time of the stay application and also at the time of hearing of this winding-up petition the said debt to the petitioning-creditor is specifically admitted year after year and the said balance-sheets were duly passed in the annual general meeting of the company and approved by the company as a subsisting loan which is payable to the petitioning-creditor by the company. Mr. Mitter also produced the ledger book of the company, which was also produced before the court in the stay application earlier, which clearly shows a book kept in the usual course of the business of the company and the loan granted to the company is duly entered in the said book. Therefore, Mr. Mitter rightly submitted that the fact of the loan is not disputed and the genuineness of the same is also not in dispute in any proceeding by the company. At least the company has not produced any evidence whatsoever to show that the loan is fictitious or fraudulent save and except making wild and vague allegations in the affidavits particularly after the present management has taken over the company from the previous management only to raise suspicion and surmise in the mind of the court and. create a cloud about the bona fide claim of the petitioning-creditor if possible. It is only after 1968, that the company in its balance-sheet has mentioned that the said loan to the petitioning-creditor by the company is unconfirmed and he submitted that the same is motivated and caused to be entered with a view to dispute the claim of the petitioning-creditor, if possible, as the company has ' sought to do in the stay application which ultimately failed before the trial court and the appeal court. He drew my attention to the judgment of Ghose J. and that of the appeal court where the stay was refused and in the course of such proceeding nearly 10 years have gone by. Mr. Mitter drew my attention to the present affidavit filed on behalf of the company by one Swapan Roy, one of the present directors, who has come after the change of management. He rightly submitted that the dispute sought to be raised is not at all bona fide as it is a long standing loan clearly admitted by the company all through up to 1967 and also the acknowledgment letter had been issued confirming the loan as hereinbefore stated. The auditors' report dated 3rd June, 1968, and the directors' report dated 25th June, 1968, which were duly approved by the shareholders in the annual general meeting held on 28th June, 1968, in which the balance-sheet up to 1967 was adopted clearly acknowledged the loan to the petitioning-creditor by the company year after year since 1951. He also rightly submitted that the letter dated 21st June, 1968, also acknowledged the debt due to the petitioning-creditor by the company in writing confirming the balance.
13. Thereafter, Mr. Mitter referred to the cases cited by Mr. Mukherjee on the question of acknowledgment in balance-sheets as having no application to the facts of the present case as each case has to be taken on the facts on which the decision is given and each of the said decisions are clearly distinguishable from the facts of this case. Therefore, those have no application in the present case. Mr. Mitter specifically relied on Bengal Silk Mills' case, : AIR1962Cal115 , where it has been held that the acknowledgment in the balance-sheet of a company which is duly signed by the directors and adopted in the annual general meeting by the company amounts to an acknowledgment within the meaning of. Section 19 of the Limitation Act, 1908, and, therefore, as, in the present case, it must be held that the said debt is subsisting and duly acknowledged in the balance-sheets of the company year after year up to 1967. Mr. Mitter rightly submitted that the decision in Consolidated Agencies Ltd. v. Bertram Ltd.  3 All ER 282 at p. 288, was a case where there was a two years' lag and the debt cannot be said to be a subsisting liability which is not the case in the present one before this court. He also submitted that the decision in  2 All ER 711, relates to an acknowledgment by a company in its own favour as the debt was due to a sister concern. He also submitted and in my view quite rightly that the observations of the Supreme Court in Pellad Turkey Red Dye Works Co. Ltd. v. Dyes and Chemical Workers' Union, : (1960)ILLJ548SC , and Management of Consolidated Coffee Estate Ltd. v. Workmen  2 Lab LJ 576 (SG), arise out of industrial dispute 'cases where the consideration and circumstances are quite different from those of the ordinary commercial dealings as in the present case. Therefore, the said principles or observations in the balance-sheet cannot be applied to all cases but only in the peculiar and particular circumstances of labour and employer relationship giving rise to industrial dispute. In my view, Mr. Mitter's submission as to the existing liability and the acknowledgment of the same by the company in favour of the petitioning-creditor ail through is acceptable and I am unable to accept the contention of Mr. Mukherjee that there is a bona fide dispute as to the validity of the said loan advanced by the petitioning-creditor to the company, firstly, being barred by limitation, secondly, being fictitious and fraudulent and, thirdly, between the two companies under the same management. Those are now sought to be raised by the present management of the company in the affidavit of the said Swapan Roy, a present director, getting inspiration from various decisions which were cited by Mr. Mukherjee and to create suspicion and surmise in the mind of the court, if possible. It is well settled that the court cannot base its findings or judgment or opinion on pure suspicion and surmise. In this case, it cannot be disputed that there is clear, unequivocal and unqualified acknowledgment of liability by the company since 1951 up to 1967, year after year both in the balance-sheet and profit & loss account which has been duly audited, approved and ratified by the shareholders in the annual general meeting of the company wherein the said loan advanced by the petitioning-creditor to the company is acknowledged specifying the exact figure year after year. There is also the confirmation letter referred to above. Because at some point of time there was a common director of the petitioning-creditor company which was previously carried on in the name of Goenka, Commercial Bank Ltd. it cannot be held that there is any fraud, illegality or anything unusual in the said transaction of loan advanced by the petitioning-creditor to the company since its inception. Moreover, the company should not be allowed to take this question after such a long time as it has been ratified all through by the shareholders in the annual general meetings year after year for nearly 16 years, and duly acknowledged in the balance-sheets all through as hereinbefore stated. I have carefully considered the winding-up petition and also the documents annexed therewith and the balance-sheets of the company, which, have been produced before the court and cannot be disputed by the company, that there is a clear acknowledgment of the liability, all through by the company, to the petitioning-creditor of the specific amount due to the company and, moreover, the said deed of mortgage dated March 17, 1971, wherein the loan granted by the petitioning-creditor company in its former name in which it carried on its business, being Goenka Commercial Bank Ltd., lent and advanced from time to time on a mutual open and current account a total sum of Rs. 3,00,000 as recorded in the said deed of mortgage which is annex. A to the affidavit-in-reply filed by Shanti Lal Shaw, a director of the petitioning-creditor company, affirmed on 5th September, 1970, clearly shows the origin of the said loan and, thereafter, year after year, the company has acknowledged the liability in its balance-sheets which has been duly adopted and ratified by the shareholders in the annual general meeting up to the year 1967, and it is only after the new management has taken over the respondent company the said debt is sought to be disputed on the ground as aforesaid as has been contended by Mr. Mukherjee, appearing for the company, relying on the affidavit of Shanti Nath Sarogee affirmed on 27th July, 1970, and thereafter, on the affidavit of Swapan Roy affirmed on 27th January, .1976,
14. It appears to me, after a careful consideration of all the facts and the documents, and, particularly the conduct of the company after the management was changed and came into the hands of the present directors, that a genuine long standing debt due to the petitioning-creditor company is now sought to be disputed and various pleas are taken which are not only unfounded and baseless but purely legalistic without any factual basis and various decisions have been cited which have no relevancy to the facts of the present case. The company must be said to be insolvent and unable to pay its debt and the dispute sought to be raised in respect of the petitioning-creditor's claim is not at all bona fide. Further, the company is heavily indebted as would appear from the supporting creditors' claims, one of which is the Central Excise Department, whose claim cannot be disputed. The only submission sought is that it can be compounded by the company and can be paid by instalments.
15. Various technical questions were raised as to the form of the winding-up petition referring to the celebrated passage in Buckley, but in my view, that the winding-up petition suffers from no infirmity as the material facts have been stated and there is substantial compliance with the form as prescribed under the Companies Act, 1956, and Rules made under the Companies Act, 1956, and if the winding-up petition is read as a whole along with all the documents referred to and annexed thereto and also with other documents subsequently disclosed and produced before the court both at the stage of the stay application and the appeal therefrom and before this court after it came back to this court for the hearing of the winding-up petition after advertisement and after hearing the petitioning-creditor and the supporting creditors, I cannot but hold that the company is unable to pay its debt, is an insolvent company and must be wound up.
16. Reference may also be made to a latest decision of the English court In re Gee & Co. (Woolwich Ltd.)  1 All ER 1149; 2 WLR 515(Ch.D), where the acknowledgment of the liability, of a company in its balance-sheet came up for consideration and after reviewing the relevant decisions including some of the decisions cited by Mr. S. B. Mukherjee on behalf of the company and summarising the relevant facts of the case which, in my view, are very similar to the present one, Brightman J. observed at page 1160 (p. 527 of 2 WLR) as follows:
'I shall accordingly decide this case on the footing that a balancesheet, if duly signed by the directors, is capable of being an effective acknowledgment of the state of indebtedness as at the date of the balance-sheet; and that, in an appropriate case, the cause of action will be deemed to have accrued at the date of the balance-sheet, being the date to which the signature of the directors relates. Its my judgment the balance-sheet of the company as at 31st December, 1965, signed by the directors on 25th November, 1966, would have been an effective acknowledgment as at 31st December, 1965, of the liability of the company so as to take the matter out of the statute, if the acknowledgment had not been made by the directors in favour of one of themselves.'
17. Then again :at page 1161 (p. 527 of 2 WLR), it was observed by Brightman J. as follows:--
' It seems to me plain that an acknowledgment signed by the directors in relation to their own debt would be fully effective if sanctioned by every member of the company. If so sanctioned I do not see how it could be said that the directors were acting in breach of their fiduciary duty. If authority is needed for that proposition, see for example Parker and Cooper Ltd. v. Reading  1 Ch. 975 (Ch D) and In re Duomatic Ltd.  2 Ch. 365 (Ch D), The general meeting of the company at which the accounts were adopted and the state of the Ecclees account confirmed was in fact a meeting attended by, or by the representative of, every member of the company. The only absentee was one of the two joint holders of shares, which is irrelevant because the holder present could vote on behalf of both. In these circumstances, it seems to me plain that all the corporators must be taken to have agreed to the directors' written acknowledgment of the debt.'
18. Therefore, applying the said principles to the facts of this case which are undisputed, that is, the initial loan which is recorded in the mortgage deed dated 17th March, 1951, and, thereafter, year after year, acknowledged by the company in its balance-sheets, which has been duly audited and the balance-sheets are signed by the directors as hereinbefore stated, and also the letter of acknowledgment, which are annexed to the petition leaves no doubt in my mind that it amounts to a subsisting liability of the company due and owing to the petitioning-creditor year after year up to 1967, and, therefore, there is no question of the claim being barred by limitation, and, there is no substance in the contentions raised by the company that the said loan was fraudulent and fictitious and that it was granted between companies under the same management is of no substance, as, it only appears at some point of time that one of the directors was common to both the companies and thereby it does not follow that the loan isfictitious and fraudulent and has no substance. The said loan has been adopted by the company and its members in its annual general meeting have ratified as a subsisting loan all through till the new management took upon itself the onus of disputing the said loan on frivolous grounds in which they have utterly failed and, therefore, this is a fit case where it must be held that the company is unable to pay its debt and there is no substance in the dispute and the defence sought to be raised by the company either in fact or in law and, therefore, there must be an order of winding up as the company is a positive danger to the public and does not carry on business following the business norm and business honesty and has tried to dispute an undisputed claim unsuccessfully which has enabled the company to keep the matter pending for, the last ten years. Therefore, it is just and proper that the company should be wound up.
19. During the last ten years the winding-up petition is pending as in the course of the same the company made an application for stay which was heard at length and all the questions raised in this winding-up petition were also raised in the stay application and rejected by the trial court from which appeal was preferred and the Appeal Court also dismissed the appeal. The judgments of both the trial court and the Appeal Court have dealt with the contentions of the company particularly the claim of the petitioning-creditor being barred by limitation and also that the same is fictitious and fraudulent and at that stage rejected the said contentions and held that the winding-up petition was not an abuse of the process of the court and ultimately, the matter came up before the trial court for hearing of the winding-up petition where two of the supporting creditors supported the winding-up petition and appeared before the court as hereinbefore stated. As I have noted before that the company has no defence whatsoever, far less a bona fide one or of any substance both in fact or in law, but it always seems to be the practice and policy of dishonest and unscrupulous management of a company particularly when there is a change in the management to take all possible pleas and cite English and Indian cases on the principles of winding up of a company starting from the very pleading in the winding-up petition through able counsel and with an attempt to create confusion about very simple matters.
20. A winding-up petition is not a matter only between the petitioning-creditor and the company, as, it does by nature, particularly after advertisement, assume the character of a representative action on behalf of all the contributories and creditors of a company. Therefore, if is the duty of the court to scrutinise with great care and caution the respective contentions and exercise its discretionary power of winding up a company in the facts and circumstances of each particular case.
21. There is no doubt that a form has been prescribed under the Companies (Court) Rules, 1959, for a winding-up petition by a creditor, being Form No. 46 under Rule 95 read with Rule 17 of the said Companies (Court) Rules, 1959, that is subject to the court's general power to follow the CPC and inherent power under Rules 6 and 9 respectively. In this particular case a contention was raised that the petitioning-creditor has not stated in the petition the date when the loan was granted that is the origin and with detailed particulars. But, in my view, such pedantic and strict adherence to the mere forms cannot be the principle on which company law has to be administered. Substantial compliance is there, particularly when the facts are clearly and specically admitted for a period of nearly thirty years in the documents, and thereafter, year after year the balance-sheets, which have been duly audited along with the auditors' report and the directors' report signed by the directors and auditors are passed in the annual general meeting of the company amounting to a ratification by the company's general body of members, which acknowledges a subsisting debt. Therefore, the matters which are within the knowledge of the company and are repeatedly admitted and acknowledged in writing for nearly thirty years cannot be reopened by legalistic arguments supported by well-settled principles laid down in various decisions of the courts, both relevant and irrelevant, which cannot displace the simple fact of the admitted loan, which cannot be disputed on any materials save and except mere technicalities and arising suspicion and surmise in the mind of the court, if possible. After all, a company is now not the concern of the few individuals being the group of shareholders who control the management of the company purchasing or acquiring the controlling block of shares in a public limited company, but, it is a concern for the public as a whole and when it is found that those are in the hands of dishonest and unscrupulous persons who do not hesitate to dispute the bona fide claim of creditors, it poses a serious public danger and the court is given ample power and jurisdiction in a particular case when it is satisfied that there is no bona fide dispute or there is no substance in the defence sought to be raised either in fact or in law to wind up the company for public benefit. The discretion has to be exercised very cautiously, judiciously and in a fair manner after giving full opportunity to the company, and, in this particular case the conduct of the present management of the company is not only a positive danger to the public but the present management is under the impression that by the change of management of a company the liability of the company also vanishes if able arguments can be made on legal principles of winding up without seriously contesting or disputing the basic facts as to the liability or the debt due to the petitioning-creditor. Simply by raising suspicion and legal questions, as in this case, regarding the origin of the debt and the claim being barred by limitation and citing decisions on the effect of the balance-sheets of a company as to the admission of liability in the balance-sheets of a company, will not displace the basic fact of the existing liability to the petitioning-creditor and the supporting creditors. Change of management does not change the existing financial liability of the company which is subsisting for more than thirty years and clear admissions in the successive balance-sheets are certainly factors which weigh with the court for exercising discretion and the decisions in the stay application, particularly in this case, where in detail the very same aspect of the matter which has been raised at the hearing of the winding-up petition was set up by the company at different stages, and overruled by the court, which although have not the force of res judicata are certainly factors to be taken into account by the court hearing the winding-up petition, in order to exercise its discretionary power under Section 443 of the Companies Act, 1956, after hearing the winding-up petition and pass necessary orders. The court has to administer justice in the interests of the contributories and the creditors of the company as well as in public interest and for such purpose the nicety of the pleadings will not stand in the way of the court, and in this case I am satisfied, on the material placed before me, beyond any doubt, that the company is insolvent and unable to pay its debts as hereinbefore discussed, both to the petitioning-creditors and also to the supporting creditors who are appearing in this application at the time of the hearing, of the winding-up petition. Therefore, I must hold that the company is unable to pay its debt and there is no substance in the defence sought to be raised either in law or in fact.
22. In the result, I am making the following order :
There will be an order in terms of prayers (a) and (b) which will also include all costs of the stay application and costs of appeal. The official liquidator to take possession of the books, papers, documents, and assets of the company forthwith on a signed copy of the minutes and the petitioning-creditors to assist the official liquidator to enable him to take possession in terms of the order.
23. The official liquidator and the petitioning-creditors to act on a signed copy of the minutes. Stay asked for refused.