Law: Companies Act (VII of 1913)

Section: 162,163

Companies Act (VII of 1913), Ss. 162 & 163 and Sind Chief Court Rules (Original Side), r. 781-Company, application for winding up of-Rupees 22 lac due and recoverable from company -Failure to give reply to creditors' notices under S. 163, Companies Act, 1913-Two cheques issued by Company, for four lac and five lac respectively, dishonoured-Circumstances, held, adequate for establishing prima facie case against Company for compulsory winding up-Company offering to furnish security for amounts claimed and praying that proceedings be stayed till decision by arbitrators to whom matter had already been referred for arbitra tion-Prayer allowed in terms of offer.   In re: Brighton Club and Norfolk Hotel Co. Ltd. 55 Eng. Rep. 873 distinguished.   Date of hearing: 15h August 1966.   JUDGMENT   The point for consideration in both these cases is as to whether there is a prima facie case for making an order that the applications be advertised in terms of Rule 781 of the Sind Chief Court Rules (Original Side).   The allegation that has been made by the applicants 1lgainst the company is thatcheques of the company of the value of four lacs and five lacs of rupees have been dishonoured. Mr, Naimuddin saris that in one case, there is an admission of the liability. of the company also. Mr. Sharaf Faridi denies that the so-called admission really amounts to that. The applicants have alleged in their respective applications that Rs. 13,29,638 and Rs. 9,46,092.40 are due and recoverable from the company. It is also alleged that notices in terms of section 163 of the Companies Act, 1913 have been duly given to the company, but the company has neglected to give any reply to them.   The above circumstances alleged on behalf of the applicants appear to be adequatefor establishing a prima facie case against the company to wind it up compulsorily. Mr. Sharaf Faridi has replied to this aspect of the case by pointing out that the company is disputing its liability, and that all disputes that may arise between the parties are referable to arbitration. Such arbitration, according to Mr. Faridi, has already commenced because the arbitrators of the…