N. K. BATABYAL, J. ( 1 ) THE Company, Associated Design Planning Group Private Ltd. , incorporated under the Companies Act, 1956 and having its Registered Office at 99/5/5, Ballygunge Place, Calcutta has a nominal capital of Rs. 1,00,000. 00. The Company was established for the following objects : (A)to carry on the business of consultancy, services for Architectural, Planning, interior design and also to carry on the business of civil/structural, mechanical, electrical, environmental engineering/ consultancy services; (b)to acquire by purchase, lease or otherwise, land, building estate or any such property for any tenure and develop construct or reconstruct, alter improve, decorate, furnish equip and maintain as any of the abovementioned business or establishment or shop, warehouses etc; (c)to lend money to such persons upon such terms and subject to such conditions as may seem expedient, not amounting to Banking; (d)to enter into any arrangement with any Government, or authority supreme, municipal local or otherwise and to obtain from any such Government or authority any rights, concessions for obtaining applications for or taking, placing debentures, securities or obligations. ( 2 ) IN or about September 1990 the Company undertook to prepare a Plan, have the same sanction and then construct on behalf of the petitioner a residential three-storied building at 8a, Dover Road, Calcutta at an estimated costs of Rs. 5 lakhs on the basis of discussions made by and between the petitioner and the Company as represented by its Managing Director, Mr. Biswanath Chakravorty. The Company indicated a disbursement schedule for the payment to the petitioner. The schedule has been annexed to the petition and marked to the letter "a". For preparation of the plan and for having the same sanctioned from the Municipal Authorities, it was agreed that the petitioner would have to pay a sum of Rs. 30,000/-on the basis of the estimates given by the Company, the petitioner in several installments advanced a total sum of Rs. 3,72,540/-to the Company as per instructions of the Managing Director. The details of the payments have been annexed with the petition and marked with letter "b". By a letter dated 28th March, 1991, the Company through the Managing Director sent drawings for signature of the petitioner and requested the petitioner to pay a sum of Rs. 4,000/- in cash. That letter has been annexed with the petition and marked as Annexure "d". The request was complied with. By a letter dated 28th March, 1991, the Company through the Managing Director sent drawings for signature of the petitioner and requested the petitioner to pay a sum of Rs. 4,000/- in cash. That letter has been annexed with the petition and marked as Annexure "d". The request was complied with. By a letter dated 28th May, 1992, the Company sent to the petitioner three copies of drawings of the residential building proposed for signature and three more copies were assured to be sent by the next date. The drawings were to be signed by the petitioner as an owner of the property before filing of the same. A copy of the letter dated 28th May, 1992 has been annexed with the petition and marked as letter "e". The petitioner was given to understand by the Company that the Plan was under preparation and would be presented to the proper authorities for sanction. Subsequently, he was given to understand that the Plan had been prepared and submitted for sanction. Necessary fees for the sanction were paid by the petitioner. Ultimately, it transpired in June/july, 1992 that the Company had taken no step whatsoever for obtaining sanction of the proposed Plan from the Calcutta Municipal Corporation and no copy of the Plan had been submitted for sanction. Since the Company was incapable of proceeding in the matter, the petitioner took back the Plan for sanction through separate agency after necessary modifications. Since the Company was incapable of proceeding in the matter, it agreed to repay the amounts received from the petitioner agreegating to Re. 3,72,540/- and as a matter of fact a sum of Rs. 1,71,000/- was repaid thereby reducing the liability to Rs. 2,47,000/- and odd. On December 17, 1992 the Company issued a cheque on Allahabad Bank, Park Street Branch, Calcutta for a sum of Rs. 81,000/- but the said cheque on presentation was dishonoured on the ground of 'insufficient fund'. The petitioner applied to the company for payment of the balance amount as a debt by a Notice of Demand dated 13th January, 1993 which was served upon the Company on 20th January, 1993 by Registered Post. But the Company failed and neglected to pay the amount so demanded. A copy of the said Notice dated 13th January, 1993 has been annexed with the petition and marked "f". But the Company failed and neglected to pay the amount so demanded. A copy of the said Notice dated 13th January, 1993 has been annexed with the petition and marked "f". ( 3 ) BY a letter dated 25th January/1st February, 1993 the Company replied to the said letter of demand stating that the Books of Account of the Company did ot show any money being received from the petitioner and that the job was not registered in the job list of the Company. Along with the said letter a statement of the Managing Director of the Company was annexed which, inter alia, stated that the petitioner did not engage the Company for the job. The copy of the said letter dated 25th January/1st February, 1993 is annexed with the petition and marked "g". ( 4 ) THE petitioner states that the payments were made to the Company by the petitioner by Account Payee Cheques which were credited to the account of the Company as would be evident from the certificate issued by the Banker of the petitioner as also from the xerox copy of the cheques annexed with the petition and marked with letter "h". The petitioner by a letter dated 23rd March, 1993 replied to the letter of the Company which was sent in reply to the petitioner's letter of Demand and thereafter the Company replied to such letter and the entire correspondence between the parties have been annexed with the petition and marked with letter "i". ( 5 ) ACCORDING to the petitioner, the Company is insolvent and unable to pay it debts in the usual course of business. The capital of the Company is insignificant in relation to the claim of the petitioner. Therefore, the petitioner has come before this Court with the following prayers : (a)that the Associated Design Planning Group Pvt. Ltd. may be wound up by the Court under the provisions of the Companies Act, 1956; and (b)such other order tray be made in the premises as shall be just. ( 6 ) MR. Bhabotosh Das, Chairman, Associated Design and Planning Group Pvt. Ltd. (hereinafter referred to as "the Company") in his affidavit has stated that the alleged transactions forming the subject matter of the winding-up petition was an arrangement entered into by and between two friends, namely, the petitioner and Mr. ( 6 ) MR. Bhabotosh Das, Chairman, Associated Design and Planning Group Pvt. Ltd. (hereinafter referred to as "the Company") in his affidavit has stated that the alleged transactions forming the subject matter of the winding-up petition was an arrangement entered into by and between two friends, namely, the petitioner and Mr. Biswanath Chakravarty acting in his personal capacity The payments, in cash on in cheque, alleged to have been made by the petitioner in favour of the Company were never received by or on behalf of the Company. From a perusal of the Company's Books of Account, Ledger, Banks Statement etc. it appears that not a single payment either in cash or by cheque excepting Rs. 20,000/- and Rs. 21,000/- on 22nd April, 1991 and on 1st May, 1991 respectively mentioned in the particulars of payments, Annexure "b" to the petition was received by or on behalf of the Company. The payment of the sum of Rs. 41,000/- was made under cheque as the remuneration for Architectural and Structural drawings of the proposed building. The erstwhile Managing Director of the Company Mr. Chakravorty resigned on 31st May, 1993 immediately after the notice of winding-up was issued by the petitioner's Advocate upon the Company. He made statement in writing that the transactions alleged in the petition for winding-up were between him personally and the petitioner who had nothing to do with the Company. The Company never had received nor ever had any occasion or opportunity to benefit itself from the payments made by the creditor save and except the two items mentioned above. Consequently there could not be any question of debtor and creditor relationship between the Company and the petitioner. ( 7 ) IT has been further stated by Mr. Das in his affidavit that the alleged transactions are ultra vires the objects clause of the Company and as such the Company could not have entered into such transactions and as such the transactions are not binding upon the Company. The Articles of Association of the Company do not provide for the Company undertaking turnkey projects in the nature of the transactions alleged in the petition for winding-up. It has been stated in the affidavit that the Company has nothing to do with Annexure "a". Mr. Das has denied all the material allegations made against the Company in the petition for winding-up. It has been stated in the affidavit that the Company has nothing to do with Annexure "a". Mr. Das has denied all the material allegations made against the Company in the petition for winding-up. The Company never took any steps for obtaining the sanction of the so called building Plan of the petitioner and never submitted any copy of the said Plan with the authorities for sanction as alleged by the petitioner. The Company never agreed to repay any amount as it never received the amount as alleged by the petitioner. No disbursement of the alleged sum of Rs. 1,25,000/- was made from the coffer of the Company. All the transactions were by and between two friends in their personal capacities. The Ex-Managing Director must have utilised the Company's cheque Books and other papers but for that the Company is not liable. Mr. Das has denied that any relationship of debtor and creditor existed between the Company and the petitioner. He has categorically denied that the Company is insolvent or that it is unable to pay its debts in the usual course of the business or that the capital of the Company is insignificant in relation to the claim of the petitioner. He has further submitted that it is not just and proper that the Company should be wound up. ( 8 ) MR. Mullick, the petitioner in the affidavit sworn on 2nd July, 1993 after dealing the affidavit of Mr. Bhabotosh Das, Chairman of the Company has stated that there was never any arrangement by and between two friends as alleged by Mr. Das. He has also denied that the payments made by him by cheque to the Company represents only the remuneration for the Architectural and structural drawings of the proposed building as stated. The said payments were made in terms of the agreement entered into by the petitioner and the Company through the Managing Director. Mr. Mullick has denied that Mr. Biswanath Chakravorty had resigned immediately after the notice of the winding up was issued by his Advocate. According to Mr. Mullick if any writings have been given by Mr. Chakravorty to the Company then the same is contrary to the records and appears to have been procured by the Company from the said Mr. Chakravorty in order to avoid its liability. Mr. Mullick has not denied that Mr. According to Mr. Mullick if any writings have been given by Mr. Chakravorty to the Company then the same is contrary to the records and appears to have been procured by the Company from the said Mr. Chakravorty in order to avoid its liability. Mr. Mullick has not denied that Mr. Chakravorty is acquainted with him for quite a long time. But he never approached Mr. Chakravorty with the proposal that to have the entire project executed through him as his friend. Whatsoever payments were made by the petitioner were made to the Company represented through Mr. Chakravorty. It has been categorically denied that the contract entered into between the petitioner and the Company was ultra vires the objects clause of the Company as alleged by Mr. Das. Mr. Mullick has reiterated what he has stated in his petition for winding-up and has denied all the material allegations made in the affidavit of Mr. Das contrary thereto. Mr. Mullick has stated that the Company has only a paid-up Capital of Rs. 1 lakh and his claim is many times more than the paid-up capital of the Company. As the Company is unable to pay its creditors in the ordinary course of business, the Company should not be allowed to continue and it is liable to be wound-up. Mr. Mullick has denied the allegations that he has filed this petition to bring undue and illegal pressure on the Company as alleged in the affidavit of Mr. Das. ( 9 ) THE allegations of the petitioning-creditor is that in pursuance of an oral agreement the Company agreed to design and draw a plan for the residential house of the petitioner, to have it sanctioned and to construct the house as per the plan. The petitioner claims to have paid under the said contract a sum of Rs. 1,89,040/- by cheques and Rs. 1,93,500/- in cash. The undisputed facts are as follows :- ( 10 ) MR. Biswanath Chakravorty was the Managing Director of the Company at the material time. The petitioner and Mr. Chakravorty are old friends. There was no written agreement between the petitioner and the Company covering the matter in dispute. The petitioner paid Rs. 3,72,540/- in cheques and cash on various dates for the purpose of construction of his houses. There is copious correspondences between the parties. The petitioner and Mr. Chakravorty are old friends. There was no written agreement between the petitioner and the Company covering the matter in dispute. The petitioner paid Rs. 3,72,540/- in cheques and cash on various dates for the purpose of construction of his houses. There is copious correspondences between the parties. In some cases, the printed letter head of the Company has been used. Two cheques covering an amount of Rs. 41,000/-found their way into the Cash Book of the Company. One cheque issued ostensibly by the Company for an amount of Rs. 81,000/- in favour of the petitioner was dishonoured by the Bank. Statutory Notice was served on the Company on 13-1-1993 demanding Rs. 2,47, 540/ -. In reply on 1-2-1993 the Company informed that the Books of Account of the Company did not show any amount received from petitioner and that there was no job registered in the name of the petitioner in the job register of the Company. On 26. 4. 93, the Company wrote to the Solicitor of the petitioning-creditor in reply to their letter dated 23-3-94 as follows :-"the Money, you allege, has been paid to the Company but has not any way benefitted the Company and has been utilised by Mr. Biswanath Chakravorty who wishes to settle the matter with Mr. P. K. Mullick as soon as possible and as friends make payments or do the work. We reiterate that the agreement was made personally and the Company was not involved. " ( 11 ) IT is also not disputed that in the Articles of Associations of the Company there is clause 33 providing for appointment of a Managing Director. Under clause 3 (B) (3) of the Memorandum of Association, the incidental objects of the Company also include "to acquire by purchase, lease or otherwise, land, buildings, estate or any such property or any tenure and develop, construct or reconstruct, alter, improve, decorate, furnish, equip, maintain as any of the abovementioned business or establishments or shops and warehouses". ( 12 ) THE controversy in this case is not about payments but whether the payments made were to Mr. Chakravorty in his personal capacity or in his capacity as Managing Director of the Company. ( 12 ) THE controversy in this case is not about payments but whether the payments made were to Mr. Chakravorty in his personal capacity or in his capacity as Managing Director of the Company. The initial stand of the Company was that no payments was made to the Company by the petitioner but this stand was given up subsequently and the new stand was that the Company was paid Rs. 41,000/- in two cheques for design and drawing of the Plan of the proposed buildings. According to the Company, Mr. Chakravorty as Managing Director instructed to draw up the plan and it was handed over to him after completion of the job for delivery. But there is no paper to show that any order was placed in the name of the petitioner. There is no paper to show how the charges were settled or that any receipt was granted by the Company for the payments made against that job. It can be inferred that formalities like placing of orders in writing, granting of receipts for payments made to the Company were not strictly adhered to. So it is useless to expect that the petitioner will produce formal papers that he had placed any order with the Company for the construction work as alleged by him. ( 13 ) ACCORDING to the petitioner, a discussion was made between him and Mr. Chakravorty as Managing Director on 9. 9. 90 for doing the job from start to finish at an estimated costs of Rs. 5 lakhs. Next date, a sum of Rs. 10,000/- was paid in cash through Mr. Chakravorty. Thereafter started a series of payments either in Cash or in cheques. From the affidavit of documents sworn on behalf of the Company on 17th March, 1994, it appears that letters written by Mr. Chakravorty to the petitioner by nick name and letters written by the petitioner to Mr. Chakravorty in his first name have come from the office of the Company though the Managing Director has allegedly resigned on 31st March, 1993. In the affidavit sworn by Mr. Das, Chairman of the Company on 5th July, 1993 some allegations have been made against the Ex-Managing Director about his fraudulent intentions. There is a gulf of difference between a fraudulent transaction and a fraudulent intention. In the affidavit sworn by Mr. Das, Chairman of the Company on 5th July, 1993 some allegations have been made against the Ex-Managing Director about his fraudulent intentions. There is a gulf of difference between a fraudulent transaction and a fraudulent intention. It has not been stated within the four corners of the affidavit sworn on behalf of the Company that the transactions of Mr. Chakravorty, Ex-Managing Director was a fraudulent transaction. However, this Court is not at all concerned with that aspect of the matter. Coming back to the question of the custody of the letters, it appears that the letters were all along with the office of the company and were part of the office records though outwardly they were couched in informal form. ( 14 ) MR. A. P. Chatterjee, learned Advocate for the Company has drawn the attention of the Court to the letter dated 4. 4. 91 in Annexure "c" to the main petition. The learned Advocate has referred to the following line in that penultimate paragraph of the letter running as follows :-"from this point onwards the Company is taking responsibility. " ( 15 ) ACCORDING to learned Advocate, this line shows that at the start the Company was not in the picture. It was subsequently brought into the picture. On the face of it, there is force in this argument. But it does not stand close scrutiny. In paragraph 7 of the affidavit sworn by Mr. Das, Chairman of the Company it has been stated that the Company had no knowledge of it and the same was issued by Mr. Chakraborty without the knowledge of the Company. This letter bears a reference No. being E103/bc/sgs dated 4-4-91. The outward despatch register of the Company for the relevant year or the connected correspondence file has not been produced before the Court to show that such a letter was not at all issued by the Company. Again, the letter has got to be read as a whole. This letter is written by Mr. Chakravorty not in his personal capacity but in his capacity as Managing Director. The second sentence of the letter reads as "i have taken the job on the basis of your advice that I should be responsible in seeing the building completed". The expression "i have taken the job" in this context cannot mean "i" personally but "i" as Managing Director. The second sentence of the letter reads as "i have taken the job on the basis of your advice that I should be responsible in seeing the building completed". The expression "i have taken the job" in this context cannot mean "i" personally but "i" as Managing Director. The last but two paragraphs states about the accounts. The penultimate paragraph itself is referring to Statement of Accounts in writing in duplicate. So the meaning ascribed to the particular sentence as stated above by the learned Lawyer for the Company is completely out of context. For this reason his contention cannot be accepted. Alternatively, even if the contention of Mr. Chatterjee is accepted, then also the involvement of the Company in the transactions cannot be ruled out. ( 16 ) MR. Chatterjee, learned Advocate for the Company relying upon the principles laid down in B. L. Cotton Mills Ltd. , and Ors. v. Maha Laxmi Cotton Mills Ltd. and Ors. ( AIR 1955 Cal. 273 ) has submitted that the principle on which the Court will forbear from deciding the dispute and making a winding-up order in case it decides it against the Company, is that winding-up proceedings are not intended to be exploited as a normal alternative to the ordinary mode of debt-realisation and that it is more convenient that claims should be investigated and decided in a regular action. ( 17 ) THE basis of an order of winding up against the Company is that the Company has ceased to be commercially solvent and accordingly, it is fit and proper in the interest of the creditors and shareholders not to allow it to function further as a Company. When there has been a failure to pay a debt in accordance with a statutory notice of demand, insolvency is to be presumed, but it may also be proved in other ways. The basis of a winding-up order on the ground of a Company's inability to pay debts is, however, always insolvency. When there has been a failure to pay a debt in accordance with a statutory notice of demand, insolvency is to be presumed, but it may also be proved in other ways. The basis of a winding-up order on the ground of a Company's inability to pay debts is, however, always insolvency. ( 18 ) WHEN a Company has failed to pay a debt, but it appears that the failure occurred, not because the Company was unable to pay but because it disputed the liability on a substantial ground and there is nothing to show that if the dispute is decided against the Company, it will not or will be unable to pay the debt, there is no present proof of insolvency and therefore no sufficient basis for making a winding-up order. In such a case the winding-up Court will only see if the ground on which the liability is disputed are substantial and if the dispute is in that sense 'bona fide'. Mr. Chatterjee has then referred to a decision of the Court in Md. Amin Bros. v. Dominion of India ( AIR 1952 Cal. 323 ) where it has been held that where the Court is satisfied that a debt upon which a petition to wind up is founded is a hotly contested debt and doubtful, then the Court should not make a winding-up order on such debt. The learned Advocate for the Company has also referred to the dictum of a Division Bench of the Madras High Court reported in Satyarazu v. Guntur Mills Co. Ltd. ( AIR 1925 Mad. 199 ). In that case it has been held that where the object of a petition to wind the Company is to bring pressure upon the Company in order to make it pay the petitioner cheaply and expeditiously which the Company desires to dispute in the Civil Court the petition is an abuse of the process of Court and should be dismissed. In that case it has been held that where the object of a petition to wind the Company is to bring pressure upon the Company in order to make it pay the petitioner cheaply and expeditiously which the Company desires to dispute in the Civil Court the petition is an abuse of the process of Court and should be dismissed. The learned Advocate has then referred to another single Bench decision of the Madras High Court in Doraiswami v. Coimbatera E. S. Nidhi (AIR 1929 Madras 265) where it has been held that where there is a bona fide dispute as to the Company's liability to pay the debt, the Courts will not allow creditors of a Company to invoke the assistance of the Companies Act for getting payment of their debts, they must be referred to a Suit. Mere failure to comply with statutory demand does not entitle the creditor to come before the Court and ask as a matter of right for the winding up of a company. Mr. Chatterjee, learned Advocate has referred to Stonigate Securities Ltd. v. Gregory (1980) 1 All ER 241. In that case it was held that windingup proceedings are not suitable proceedings in which to determine a genuine dispute whether the Company owes the sum in question. Neither any such proceedings suitable for determining whether that liability is an immediate liability or contingent liability. It may be that in some cases the point is so simple and straight-forward that the Company Court may be able to deal with it, but it is not right to say that, in a case where there is a dispute of that nature, the only course which the Court to which the application is made to restrain presentation of the petition can follow is to leave it to the Companies Court to resolve all the issues between the parties. Mr. Barin Ghosh, learned Advocate appearing for the petitioner has submitted that he also relies upon the principles laid down in the cases cited above. His main contention is that no genuine dispute or bona fide dispute has been raised regarding the grounds on which the liability of the Company is based. The learned Advocate has in this connection referred to Freeman and Lockyer v. Buckhurst Park Properties (1964) 1 All ER 630. His main contention is that no genuine dispute or bona fide dispute has been raised regarding the grounds on which the liability of the Company is based. The learned Advocate has in this connection referred to Freeman and Lockyer v. Buckhurst Park Properties (1964) 1 All ER 630. In that case, K. who carried on business as a property developer, entered into a contract to purchase an estate. He had not enough money to pay for it and obtained financial assistance from H. They formed a limited Company with a share-capital of $ 70,000, subscribed equally by K and H, to buy the estate with a view to selling it for development. K and H with a nominee of each, comprised the Board. The quorum of Directors was by the Articles of Association, four. H was at all material times abroad. There was power under the articles to appoint a Managing Director, but the Board did not in fact do so. K to the knowledge of the Board acted as if he was Managing Director in relation to finding a purchaser for the estate and again without express authority of the Board, employed on behalf of the Company a firm of architects and surveyors for submission of an application, for planrang permission, preparing plans etc. etc. The firm claimed from the Company their fees for works done. It was held, the Company was liable for the claims because- (i) K. throughout acted as Managing Director to the knowledge of the Company and was thus held out by the Company as being Managing Director and the ostensible authority thus conferred could bind the Company since its articles of association in fact provided for these being a Managing Director of the Company, and (ii) K's act in employing the plaintiffs was within the ordinary ambit of the authority of such Managing Director, and (iii) The fact that the plaintiffs had not examined the Company's articles of association and had not enquired whether K was properly appointed Managing Director did not prevent their establishing the claim against the Company based on their reliance on K's ostensible authority. In that case, it was further held by Diplock L. J. that to entitle a contractor to enforce against a Company a contract entered into on behalf of the Company by an agent who had no authority to do so four conditions must be fulfilled; (a) a representative that the agent had authority to enter into the contract on behalf of the Company; (b) the representative must have been made by the person who had "actual authority to manage the affairs of the Company (c) the contractor must have been induced by the representative to enter into the contract; and (d) the Company must not have been deprived, under its Memorandum or Articles of Association of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to the agent to enter into a contract of that type. The question which primarily fell for decision in the case relied upon by the learned Lawyer for the petitioner is whether the Company was bound by the act of K. who was not duly appointed as Managing Director of the Company. It was held that the Company was bound by the acts of the de-facto Managing Director as the Company held-out knowingly that he was acting as Managing Director. In our case there is no dispute that Mr. Chakravorty was the Managing Director. The question is whether the dispute raised by the Company that the Managing Director acted on behalf of the Company and the dispute raised by the Company is a bona fide one. In this case the Managing Director acted within his jurisdiction. The Articles of Association also provide for undertaking works of designing, planning and construction as one of the objects. It has been discussed above that the Company has taken a shifting stand from the very inception. The intimate personal relationship between the Managing Director and the Petitioning Creditor has created some complications in this case. There is no dispute about the alleged payments made by the Petitioning Creditor. Sometimes the payments were made by Account Payee Cheques and sometimes the payments were made by cheques in the name of Mr. Chakravorty and in cash. There is no formal agreement in writing between the Creditor and the Company. There is no dispute about the alleged payments made by the Petitioning Creditor. Sometimes the payments were made by Account Payee Cheques and sometimes the payments were made by cheques in the name of Mr. Chakravorty and in cash. There is no formal agreement in writing between the Creditor and the Company. But at least two Account Payee Cheques were received by the Company and one cheque issued in the name of the Company in favour of the creditor was dishonoured. An explanation has been sought to be given to explain away the payments made by the two Account Payee Cheques amountig to Rs. 41,000/ -. But unfortunately the explanation is the least convincing because it remains unexplained why no receipt was granted for the completed job. Moreover, no explanation has been given why the relevant registers and files of the Company were not produced to show that the reference number given in the letter dated 4-4-91 referred to above was never actually issued by the Company. The said letter relied upon by both the parties unequivocally establishes that the Company was drawn in the picture expressly at a certain stage of the on-going process. The production of the letters exchanged between the creditor and Mr. Chakravorty from the custody of the Company long after the exit from the Managing Director of the Company also establishes that the said letters were not merely personal letters. The cheque of Rs. 81,000/- was dishonoured was dated 17th December, 1992. The Company must have got an intimation of the dishonoured cheque in time from the Bank but the Company did not take any step in connection with the matter as the cheque was issued unauthorisedly till 2nd July, 1993. It appear from the letter at page 15 of the affidavit of documents filed on behalf of the Company that on 2-7-1993 a specific complaint was lodged to the Officer-in-Charge, Gariahat Police Station by the Company regarding the issuance of a cheque for a sum of Rs. 81,000/-by the Managing Director of the Company in favour of Mr. Mullick. The Managing Director resigned on 31st May, 1991. It is obvious that the Company conveniently overlooked the matter of blatantly improper issue of a cheque amounting to Rs. 81,000/-by the Managing Director of the Company in favour of Mr. Mullick. The Managing Director resigned on 31st May, 1991. It is obvious that the Company conveniently overlooked the matter of blatantly improper issue of a cheque amounting to Rs. 81,000/- in the name of the Company by the Managing Director and allowed him to resign and then suddenly became aware of the alleged fraud in July, 1993 after getting the statutory notice dated 13. 1. 93. It is really a riddle why the Company kept silent over the matter from the date of knowledge of the dishonouring of the cheque of Rs. 81,000/- upto 2nd July, 1993. It is clear that the Company reacted in a reasonable manner upon the disclosure of the improper act of the Managing Director as a prudent man ought to do. The creditor was not supposed to know what was going on inside the Company as he was dealing with the duly appointed Managing Director of the Company and was making payments under a bona fide belief that he was dealing with the Company. The shifting stand of the Company from the very start of the dispute, the non-disclosure of the relevant correspondence files and registers, the writing of the letter dated 4. 4. 91 by the Managing Director and the mysterious silence of the Company even after the disclosure of the improper issue of cheque by the Managing Director in the name of the petitioning creditor go together in the facts and circumstances of the case, to lead to the conclusion that the dispute raised by the Company is not a bona ride one. In this view of the matter, the principles relied on by Mr. Chatterjee, the learned Advocate for the Company as discussed above cannot apply in the facts and circumstances of the case. In the result, the petition succeeds. Accordingly, the petition is admitted subject to scrutiny. Let the publications be made in two local dailies, namely, The Statesman and Bartaman within 3 weeks from date. Publication in the Calcutta Gazette is dispensed with Returnable 8 weeks from date. The learned Advocate for the Company submits that the order for publication be stayed for 6 weeks. This prayer is opposed by the learned Advocate for the petitioning creditor. The prayer is considered and refused. In the facts of the case, no order is made as to costs. The learned Advocate for the Company submits that the order for publication be stayed for 6 weeks. This prayer is opposed by the learned Advocate for the petitioning creditor. The prayer is considered and refused. In the facts of the case, no order is made as to costs. All parties are to set on a signed copy of the Minutes of the operative part of this Judgment on the usual undertaking. Petition succeeds.