H. K. Sema, J.— These two writ appeals are directed against the judgment and order dated 21.2.95 passed by the learned Single Judge in Civil Rule No.434 of 1990 and Civil Rule No.418 of 1990, In these two writ appeals, common question %of law and facts has been raised and as such, they are being disposed by this common order. 2. We have heard Mr, T. Nandakumar, learned counsel for the appellants as well as Mr. S. Jayanta, learned counsel for the respondent at length. 3. The facts given rise to the filing of the present appeal may be summarily recited. The writ petitioner in Civil Rule No.434 of 1990 was appointed as Casual Artiste Grade II in the Department of Drama Unit of the Publicity Department by an order dated 30th November, 1967. Thereafter, by an order dated 30th August, 1969 he was appointed Artiste Grade I. From the order dated 1.12.75 at Annexure 3, it clearly appeared that on the recommendation of the DPC held on 27.11.75, Gradation List Grade I Artiste has been prepared in order of merit. In the said list, name of the petitioner appeared in serial No.1. By another order dated 22.11.78 Annexure 4, it appears that on the recommendation of the Screening Committee and on the terms and conditions laid down in the contract and on his acceptance of the terms and conditions of the contract, the writ petitioner was again appointed as Artiste Grade I with usual allowances as permissible under the rules. 4. Petitioner in Civil Rule No.418 of 1990 was appointed as Casual Artiste Grade II in the Departmental Drama Unit of Publicity, Government of Manipur at a consolidated fee of Rs.120/- by an order dated 21.9.65. By another order dated 26.10.66, he was appointed as Artiste Grade I. Thereafter, by another b order dated 1st December, 1975, on the recommendation of DPC meeting held on 27.11.75 the Gradation List of Artiste Grade I has been prepared in order of merit and the name of the petitioner appeared in serial No.4 of the Gradation List of Grade I Artiste. 5. The aforesaid two writ petitioners continued hi the post from 30.11.67 and 21.9.65 respectively till their services were terminated on attaining the age of superannuation wef 28.2.95 and 28.2.94 by an order dated 31.7.95. 5. The aforesaid two writ petitioners continued hi the post from 30.11.67 and 21.9.65 respectively till their services were terminated on attaining the age of superannuation wef 28.2.95 and 28.2.94 by an order dated 31.7.95. By the time their services were terminated on attaining the age of superannuation, petitioner in Civil Rule No.434 of 1990 had put in about 28 years of service and petitioner in Civil Rule No.418 of 1990 had put in about 29 years of service as Grade I Artiste. 6. Petitioners filed the aforesaid Civil Rules with a prayer inter alia to regularise their services as Artiste Grade I in the Directorate of Information and Public Relation Manipur. While issuing a Rule, this Court on 20.8.90 directed the respondnets not to oust the petitioners from the post they are holding. The learned Single Judge after hearing the parties disposed of two writ petitions by an order dated 21.2.95 with a direction to regularise the services of the two petitioners within a period of two months from the date' of this order. The learned Single Judge further directed that their services shall be regularised so as to enable them to receive pension and other retiral benefits. Being aggrieved, the present two appeals have been preferred by the State. 7. Three contentions have been urged before us by Mr T. Nandakumar. (a) Petitioner/respondents has not approached the Court with a clean hand inasmuch as that they were serving on contract agreement has not been disclosed in the writ petition, and as such, the petition is liable to be dismissed for suppression of facts. (b) The petitioners are bind by their own agreement and having knowingly accepted the contract appointment on the terms and conditions laid down thereunder they are estopped from claiming the regularisation of their services. (c) The petitioners' services were appointed on contract on the basis of Cabinet decision in its meeting held on 12.9.77. 8. In this connection, Mr. T. Nandakumar has referred to Annexure B/2 agreement dated 8.1.91 executed between the appellant and the respondent/writ petitioner. This agreement clearly appears to have been executed after this Court passed an interim order on 20.8.90 not to oust the petitioners when they filed writ petitions for regularisation of their services. 8. In this connection, Mr. T. Nandakumar has referred to Annexure B/2 agreement dated 8.1.91 executed between the appellant and the respondent/writ petitioner. This agreement clearly appears to have been executed after this Court passed an interim order on 20.8.90 not to oust the petitioners when they filed writ petitions for regularisation of their services. Therefore, we are of the view that the agreement dated 8.1.91 is well an after thought to throw a cobweb to bind the petitioners from claiming regularisation of their services and depriving pensionary benefits to the writ petitioners/respondents. Although it is true'that the Cabinet in its meeting held on 12.9.77 appears to have finalised the service condition of personnel of the Departmental Drama Unit of Publicity Department, no agreement appears to have entered between the staff and the department prior to 1991. No copies of agreement has been produced before us other than 1991 agreement. The agreement in 1991 has'been.entered into between the parties after the petitioners had put in almost 25, years of service. Therefore, the agreement dated 8.1.91 cannot take away the services already rendered by the petitioners throughout their life. 9. On maintainability of the writ petition, learned counsel for the appellant has invited our attention to the decision of the Supreme Court in Dr. Vijay Kumar Kathuria, vs. State of Haryana & others, AIR 1983 SC 622 , wherein the Apex Court had deprecated the practice of making false representation and obtaining relief. Reliance has also been placed in G. Narayanaswamy Readdy & others vs. Government of Karnataka & another, AIR 1991 SC 1726 where the Apex Court deprecated the practice of suppression of material facts. While it is true that the litigant runs a high risk when they obtained relief by suppression of facts, in the instant case, disclosure of facts that the petitioners were on contract service would make no difference in view of the order that we proposed to pass. Therefore, the aforesaid decision is of no help to the appellant's case. 10. Let us accept that the writ petitioners were on contract service, but the facts remained that they are allowed to work for almost 28 and 29 years respectively till they are retired on attaining the age of superannuation by an order dated 31.7.95. It is in this situation, we are examining the case from another angle. 10. Let us accept that the writ petitioners were on contract service, but the facts remained that they are allowed to work for almost 28 and 29 years respectively till they are retired on attaining the age of superannuation by an order dated 31.7.95. It is in this situation, we are examining the case from another angle. The order dated 31.7.95 retiring the petitioners/respondents is extracted : xxxx  xxxxx xxxx 11. We are being disturbed that the petitioners were compelled to go on superannuation after putting in 28 and 29 years of service respectively without any pensionary and other retiral benefits. In a welfare State like ours committed to a socialistic pattern of society, it is unconscionable that employer compels the employee to go on retirement without any retiral benefits after putting in 28 and 29 years of service on the pretext of contract service. It will be hit by equality clause as enshrined in Article 14 of the Constitution. The writ petitioners/ respondents have spent the entire youthful life to the service of the State rendering valuable services to the State as an Artiste. It will be too cruel to allow them to go empty handed when they are aged, old and infirm and incapable of earning by themselves. It is common knowledge that Government servants work for future security. The argument that the writ petitioners accepted the appointment with full knowledge of the terms and conditions laid down in contract and therefore, their services cannot be regularised and they are not entitled pension and other retiral benefits would amount to exploitation of labour. May be the petitioners have knowing full well the terms and conditions of contract accepted the employment because of compelling circumstances. State, being a model employer are not permitted to use method of exploitation against the weaker section of people. 12. We, unequivocally of the view that the term 'contract appointment' must be terminable at some stage of their service. But if contract appointment continued uninterruptedly till the age of superannuation as is happened in the case at hand, the character of the contract appointment automatically changes and the employee has to be treated under the normal Government service rules, entitling them pensionary benefits. But if contract appointment continued uninterruptedly till the age of superannuation as is happened in the case at hand, the character of the contract appointment automatically changes and the employee has to be treated under the normal Government service rules, entitling them pensionary benefits. In the instant case, the stand taken by the appellant Government that the respondents were on contract service and therefore, even if they retire on attaining the age of superannuation they will not be entitled to pension and other retiral benefits is unacceptable. If they are on contract service their service could have been terminated when they are still youthful and they could have gainfully employed in some other avocation. But then, after using their entire services, drained out their energy and when they are aged, old and infirm and incapable of functioning, allowing them to go empty handed is an invasion of mandate of Articles 14 and 21. Right to live has been interpreted as right to live with dignity. Unless citizents have means for sustenance right to live with dignity will have no meaning. The contention of the learned counsel for the appellant are therefore rejected as untenable in law. 13. Since we have rejected the contentions of the appellant as aforestated, we need not go to the arguments advanced by Mr. Jayanta, learned counsel for the respondents. 14. For the reasons aforestated, there is no merit in these two writ appeals and they are accordingly dismissed. However, without costs. 15. Before we part with the record, we make it clear that this judgment of ours will be applicable to all the Artists working under the Department of Directorate of Information and Public Relation who has served more than 10 years of service on contract as on today, so that unnecessary litigations are thwarted. We say this, because of the high litigation costs in this country, many common people may not afford to approach this Court because of economic desperates, despite of having genuine grievances. With the aforestaded observations and directions, these two writ appeals are dismissed. However, without costs. 1997 (1) Gauhati Law Journal 540 (BEFORE D. N. BARUAH, J) iRODIA HARDWARE STORE (CP Nos.7 of 1987) .RODIA ENGINEERING WORKS (CP tf 0.8 of 1987) S KHANDELWAL AUTO STORE (CP No JO of 1987) Petitions Versus VtODIA PLANTATIONS AND INDUSTRIES PVT LTD Respondent. With the aforestaded observations and directions, these two writ appeals are dismissed. However, without costs. 1997 (1) Gauhati Law Journal 540 (BEFORE D. N. BARUAH, J) iRODIA HARDWARE STORE (CP Nos.7 of 1987) .RODIA ENGINEERING WORKS (CP tf 0.8 of 1987) S KHANDELWAL AUTO STORE (CP No JO of 1987) Petitions Versus VtODIA PLANTATIONS AND INDUSTRIES PVT LTD Respondent. Company Petition Nos.7, 8 and 10 of 1987 decided on 17.12.96. Companies Act, 1956-Section 434-Unable to pay-Meaning™ pressjon 'unable to pay its debts' is to be taken in commercial sense -, wing unable to meet current demands though the company maybe ; GARODIA HARDWARE STORE vs. NIMODIA PLANTATIONS 541 otherwise solvent-Where company's existing liabilities are such to satisfy that existing and probable assets would be insufficient to meet existing liabilities Court may pass order of winding up-Certain liabilities will due a in future which are more than present assets does not necessarily lead to conclusion that company will be unable to meet its liabilities when they due. Para 14 Companies Act, 1956-Section 434-Winding up-Disputed debt- Question of winding up does not arise. Para 14 Companies Act, 1956-Section 434-Winding up-Just and equitable- b Duty of Court-Duty of Court to see whether it will be just and equitable to wind up the company-List of situations that may fall within scope of 'just and equitable' clause, may be convenient for purposes of presentation- Words 'just and equitable* require flexible interpretation. Para 15 Companies Act, 1956-Section 434-Unable to pay-Amount payable were not paid in spite of repeated demands-Company was not in position c to run properly for want of finance-Liability of company become more than Rupees two crore-Held, Company is in financial difficulties and unable to pay debt-Intention to sell tea garden is an indication to that effect. Para 16,18 ," Companes Act, 1956-Section 434-Winding up-Company has entered * into agreement of sale of property-Right of purchaser is that of creditor- If purchaser on strength of agreement for sale file a suit for specific performance of contract and decree is obtained thereof and may get the property in execution of decree, other creditors will deprived of their money -Held, One creditor alone should not get benefit to exclusion of others-In interest of all creditors company should be wound up. Para 20 e Comapnies Act, 1965-Section 434~Notice-Serving of notice gives presumption that company is unable to pay its debts-Even without serving such notice if it can be proved that company is unable to pay the amount Court cannot ignore the fact that company was unable to pay the amount -Ample materials to show that company is unable to pay its debts-Held, Merely because notice under Section 434 was not served it cannot be said / that company is unable to pay its debts-In interest of all creditors company should be wound up. Para 20 Case law discussed-Chhatrakumari vs. Mohaabikram, AIR 1931 PC 196. Advocates appeared in the cases-Mr. GN Sahewalla, Mr. AK Goswami for the appellants; Mr. BK Goswami, Mr. PK Kalita, Mr. AK Bhattacharyya, Mr. K. Agarwalla, Mr. DK Hazarika, Mr. S. Kataki for the respondents. 8 JUDGMENT AND ORDER As the subject matters of all the above company petitions involve common question of law and similar facts, I propose to dispose of all these three petitions by a common judgment. 2. These company petitions have been filed under section 433 (e) and (f) , read with section 434 (1) (a) and (c) and section 439 of the Companies Act, 1956, for short, 'the Act'. All the petitioners are firms, registered under Indian 542 GAUHATI LAW JOURNAL 1997(1)GLJ 'artnership Act having their principal place of business at Golaghat in the district jolaghat. The respondent, viz, Nimodia Plantations and Industries Private ^imited, for short 'the company', is a private limited company incorporated mder the Act having its Head Office at AT Road, Bokakhat in the district of a brhat. 3. The company owns and possesses a tea garden, namely, Hautley Tea istate within the Sub Division of Golaghat, in the district of Jorhat, Assam. According to the petitioners, the Manager of the said tea garden as well as the ompany placed orders with the petitioners firm for selling, supplying goods in espect of Company Petition No.7 of 1987 and 10 of 1987 and for repairing b ertain machineries of garden, in respect of Company Petition Nol8 of 1987 rom time to time in between 1983 to 1986. The goods were duly received by tie authorised agents of the tea garden of the company. The goods were duly received by tie authorised agents of the tea garden of the company. Besides the petitioner in 'ompany Petition No.8 of 1987 made repairs of machineries of the garden, ifter supplying the goods and making repairs of machineries, the petitioner irms submitted bills. The amount due from the company in Company Petition c Jo.7 of 1987 is Rs. 1,55,183.67, in Company Petition No. 10 of 1987 is Ls.56,974.36 for selling the goods and in Company Petition No.8 of 1987 is Ls.l,08,760.10 for repairing several machineries of garden. The company paid > the company petitioner in Company Petition No.8 of 1987 a sum of Rs. 15,000 saving a balance of Rs.94,760.10. T 4. According to the petitioner firms the company is not in a position to meet ic liabilities and the comapny is running at a loss and there is no chance to lake profit. Petitioners further state that the company having failed to manage le aforesaid tea garden had entered into an agreement with Sri Lalit Chandra orah and Shri Puspendra Nath Borah for selling the aforesaid tea garden and n coming to know about the aforesaid agreement, petitioner firms approached e ic Managing Director of the company to clear the amount due before selling ie garden. The Managing Director of the company wrote a letter to the proposed urchaser to pay the aforesaid dues to the petitioners' firms with copy to the stitioners' firm. As per the aforesaid letter, the proposed purchaser did not lear the outstanding dues. Thereafter, again the petitioner firms wrote letters id sent through their representatives demanding the aforesaid amounts from / ie company. The respondent company again wrote letters t® the petitioner firms 115.12.86 informing the firms that the outstanding amounts squid not be settled >r the reason that the sale of the garden was delayed due to some technical and gal difficulties. As the respondent company failed to pay the amount for more ian eight months the petitioner firms issued further notices through their dvocates demanding the payment of outstanding amoxmt. In spite of demands 8 | e respondent company failed to clear the dues. It is also stated by the petitioner v| rms that the respondent company even could not pay the wages of the labourers | 'the tea garden on some occasions and failed to pay dues of other firms and ;rsons. Hence the present petition. 5. In spite of demands 8 | e respondent company failed to clear the dues. It is also stated by the petitioner v| rms that the respondent company even could not pay the wages of the labourers | 'the tea garden on some occasions and failed to pay dues of other firms and ;rsons. Hence the present petition. 5. Respondents entered appearance and filed their affidavit-in-opposition. , | i the affidavit-in-opposition filed by the respondent company it is stated that I GARODIA HARDWARE STORE vs. NIMODIA PLANTATIONS 543 the goods were taken by the agent of the tea garden and it was not a fact that the company was unable to pay the dues of the petitioners firm on repeated demands. However, the amounts were not due by th'e respondent company. It is further stated that in the agreement for sale all the liabilities of the garden (Hautley) including that of the petitioners had been included and it was settled between the proposed purchaser and the respondent company. The proposed purchaser had taken all the liabilities to pay the dues to the creditors before execution of the sale deed and the said amounts would be deducted from the purchased money. The agreement was signed on 26.9.86 and the proposed purchaser had already taken over possession of the garden on the date of agreement. As the proposed purchaser had taken all the liabilities of the* garden the respondent company had nothing to do with the liabilities of the Hautley Tea Estate. However, the proposed purchasers failed to pay the balance purchase price within the stipulated time and as a result the sale deed could not be executed. Though the respondent company demanded back the possession of the garden from the proposed purchasers, instead of giving back possession of the tea garden they filed a suit in the Court of the Assistant District Judge, Golaghat and obtained an injunction restraining the respondent company from taking back possession of the garden. The proposed purchasers now without paying anything to the respondent company enjoying the tea garden and the matter is now pending before this Court. 6. Thereafter, the respondent company filed an application to implead the proposed purchasers, viz, Sri Lalit Chandra Bora and Sri Pushpendra Nath Bora as party respondents. This Court by order dated 10.9.90 allowed the petition and the proposed purchasers were impleaded as party respondent Nos.2 and 3 respectively. 6. Thereafter, the respondent company filed an application to implead the proposed purchasers, viz, Sri Lalit Chandra Bora and Sri Pushpendra Nath Bora as party respondents. This Court by order dated 10.9.90 allowed the petition and the proposed purchasers were impleaded as party respondent Nos.2 and 3 respectively. * 7. The proposed purchasers, viz, respondent Nos.2 and 3 entered appearance and filed affidavit-in-opposition. In their affidavit-in-opposition they admited that they have taken over possession of the Hautley Tea Estate on the date of execution of deed, i.e. on 26.9.86. However, in clause 10 (a) of the said agreement for sale it was specifically mentioned that the liability in respect of Hautley Tea Estate would be paid by the respondent Nos.2 and 3, except private parties liabilities. The claims of the petitioners firm in respect of the work done/goods supplied were during the period from 1983 to 1986, which was much prior to the date of execution of agreement. Therefore, they are not liable to pay any liability to private parties prior to 26.9.86, 8. Additional affidavit-in-opposition have also been filed by the respondent Nos.2 and 3 in all the cases. 9. In Company Petition No.7 of 1987 the respondents have stated that the respondent company owned Hautley Tea Estate and was running at a loss and the liability of the company was to the tune of Rs.l,13,32,217.46 as on 26.9.86. Apart from the said liability the company also could not pay the Provident Fund contribution and wages to its workers. The respondent company having found that it would be absolutely impossible for the company to run the said tea estate and the Assam Co-operative Apex Bank Ltd which financed the tea garden 544 GAUHATI LAW JOURNAL 1997 (1) GLJ having threatened to take over the said tea estate decided to transfer the said tea estate by sale and the respondent Nos.2 and 3 therefore, entered into an agreement with the respondent company for sale of the said test estate at a consideration of Rs.2,10,00,000 and in that connection an agreement was entered into by and a between the respondent company and the respondent Nos.2 and 3. As per the terms of the said agreement the said tea estate was handed over to these respondents. They have further stated that at the time of execution of the sale the liability of the bank was shown at Rs.68,36,551.30. As per the terms of the said agreement the said tea estate was handed over to these respondents. They have further stated that at the time of execution of the sale the liability of the bank was shown at Rs.68,36,551.30. Though the sale deed was not executed, according to these respondents, the. tea estate is now the property of respondent Nos.2 and 3 and the respondent company has no manner b of connection with the said Hautley Tea Estate, except the price agreed to be paid. These respondents have already filed a suit (TS No.41 of 1987) and the trial Court passed status-quo order. An appeal was preferred before this Court (Misc Appeal (F) No.41 of 1988), and this Court refused to interfere with the said order of status-quo granted by the trial Court. According to the respondent Nos.2 and 3 the said property of Hautley Tea Estate cannot be the subject c matter of the company petition and the said amount cannot be recovered from the said property and now the respondent Nos.2 and 3 are holding the property by the order of this Court. That being the position, that cannot be the subject matter of the litigation in a company petition. If the amount is due by respondent company or any creditor that can be recovered from other properties of the j respondent company. As per the agreement entered into by the respondent company and the respondent Nos.2 and 3, respondent company had given full details of the liability,of the company to which the property of Hautley Tea Estate was charged, but the present liability not having been shown by the owner of the tea estate, the alleged liability cannot touch the Hautley Tea Estate and it is apparent on the face "of the agreement for sale that the* petitioner and the Q respondent No.l had colluded to defraud the respondent Nos.2 and 3 of the properties of Hautley Tea Estate. 10. In the additional affidavit-in-opposition filed in Company Petition No.8 of 1987, the respondent Nos.2 and 3 have stated that the present petition has been filed without issuing any notice. 10. In the additional affidavit-in-opposition filed in Company Petition No.8 of 1987, the respondent Nos.2 and 3 have stated that the present petition has been filed without issuing any notice. They have further stated that the claim Of the petitioner is barred by law of limitation and the petition has been filed with / a view to thwart the civil suit (Title Suit No. 18 of 1987) filed by these respondents for specific performance of selling the garden in question. 11. In the additional affidavit-in-opposition filed in Company Petition No. 10 of 1987 the respondent Nos.2 and 3 reiterated the statements made in the Company Petition No.8 of 1987. It is further stated that it is for the Court to see whether other avenues are available for recovery of the amount and it was 8 unreasonable for the petitioners to seek order of winding up instead of pursuing other remedy. As the petitioners have other remedy for recovery of money the company petition is not maintainable.The petition also does not disclose that the claim is not barred by limitation. The company petitions do not show any material facts necessary for invoking power under section 434 of the Act. , 12.1 heard the parties. GARODIA HARDWARE STORE vs. tflMODIA PLANTATIONS. 545 \ 13. Now the question to be decided in these cases is under the present facts and circumstances whether the company should be wound up or not. 14. The circumstances under which a company may be wound up have- a been mentioned in section 433 of the Companies Act. Under section 433 (d) if the company is unable to pay its debts the Court has power to wind up the company. Section 434 of the Act provides that if a company is unable to pay its debts of a creditor for exceeding Rs.500 does not get his money within 3 weeks after serving notice or any execution of a decree is returned unsatisfied or taking into account the contingent and prospective liabilities of the company the Court b is satisfied that the company is unable to pay its debts. In such a case, a petition for winding up may be presented by the Registrar with previous consent of the Central Government and, inter alia, by a creditor for exceeding Rs.500. In such a case, a petition for winding up may be presented by the Registrar with previous consent of the Central Government and, inter alia, by a creditor for exceeding Rs.500. Where in spite of repeated demands by a creditor the company neglects to pay, it is prima facie evidence of inability to pay. The expression 'unable to pay its debts* is to be taken in the commercial sense of being unable to meet current demands c though the company may be otherwise solvent. The test is whether the company's . existing liabilities are such as to make the Court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. In such circumstances the Court may incline to pass order of winding up but the mere fact that certain liabilities will accrue due in future which are more than present » assets does not necessarily lead to the conclusion that the company will be unable to meet its liabilities when they accrue due. But in case of the debt is disputed then the provisions of winding up is not attracted, therefore, the company Court before considering as to whether the company should be wound up or not on the ground of inability to pay its debts, is required to see whether such liability of the company is an admitted fact or a disputed one. If such debts is disputed then e in th£t case the question of winding up by the Court would not arise. It is also necessary that before passing an order of winding up by a Court it is to be seen whether it is just and equitable for passing such order. The expression 'just and equitable* indicates that a limited company is more than mere juridical entity with a personality in law of its own. The company law recognises the fact that behind it, or amongs it, there are individuals, with rights, expectations and / obligations inter se which are not necessarily submerged in the company structure. Such structure is defined by the Companies Act and the Articles of Association by Which shareholders agree to be abide by. This is applicable in most of the companies and this definition is sufficient and exhaustive, applicable to all types of companies large or small. Such structure is defined by the Companies Act and the Articles of Association by Which shareholders agree to be abide by. This is applicable in most of the companies and this definition is sufficient and exhaustive, applicable to all types of companies large or small. The just and equitable provision does not entitle one party to disregard the obligation he assumes by entering a company, for the & Court is to dispense him from it. 15. It is the duty of the Court to see whether it will be just and equitable to wind up the company. There is an exhasutive list of situations that may fall within the scope of the 'just and equitable' clause, but it appears that although such classification may be convenient for purposes of presentation, the words . 'just and equitable* require a flexible interpretation. In the words of Lord Wilberforce: "Illustrations may be used, but general words should remain general 546 GAUHATI LAW JOUB&AL and not be reduced to the sum of particular instances. By way of illustration under this clause winding up orders have been made on the grounds : that the substratum of the company was gone. The substratum is held to be gone when ^ the main object for which the company was formed has become impracticable, a - The words 'just and equitable' are a recognition of thefact that a limited company is more than a mere juridical entity, with a personality in law of its own. The \ just and equitable provision does not entitled one party to disregard the obligation he assumes by entering a company, nor the Court to dispense him from it." * 16. In the present case the company against the whom the applications have * been filed did not seriously contest. The petitioners have been able to prove that b the amounts payable to the petitioners were not paid in spite of repeated demands, [n paragraph 8 of the petition the petitioner in Company Petition No. 10 of 1987 has very clearly stated that the company at present is not in a position to pay the j amount due. Respondent No.2 entered into an agreement for sale of the garden, and the possession of the tea garden was taken over by the respondent Nos.2 and 3 pursuant to the said agreement. According to these respondents, the c respondent company was in financial crisis. Respondent No.2 entered into an agreement for sale of the garden, and the possession of the tea garden was taken over by the respondent Nos.2 and 3 pursuant to the said agreement. According to these respondents, the c respondent company was in financial crisis. The company was not in a position to run the garden properly for want of finance. The liability of the company became more than Rupees one crore. . 17. In paragraph 5 of the! additional affidacit-in-opposition these respondents have states as follows: j I "5.... In other words, Hautley Tea Estate is only one of the properties of the * said company. Assam Co-operative Apex Bank Ltd, a Banking Institution, in the g| Co-operative Sector used to finance the said tea estate and the present liability of the said company was about Rs. 1,13,32,217.46 as on 26.9.86. Apart from the aforesaid liability, the Tea Estate also could not pay the Provident Fund Contribution ;j and ultimately the Tea Estate also could not pay the wages to its workers. When the e i,! industry became sick and the Estate was not in a position to pay the wages apart * fromx)ther legal liabilities, the number of workers working in the Tea Estate and the number of staff working in the garden was 1000, the company having found J that it is absolutely impossible for them to rua,the said Tea Estate and the Assam Co-operative Apex Bank Ltd also having threatened to take over the said Tea Estate receiver under the terms and conditions, it was decided by the company that in orderto protect the huge number of workers and the staff, the only alternative is to transfer the Tea Estate by way of sale." 18. Respondent No. 1 however denied that the company is unable to pay its lebt. But considering the entire facts and circumstances of the case, it can very veil be said that the company is to financial difficulties and unable to pay defet 8 fhe intention to sell the tea garden is an indication to that effect. 19. The respondent Np.2 and respondent No3 have opposed the winding ip of the company. woperty. There may however be a change only. English Law differs from section , >4. 19. The respondent Np.2 and respondent No3 have opposed the winding ip of the company. woperty. There may however be a change only. English Law differs from section , >4. Indian Law does not recognise legal and equitable estate as held by Privy ^ KHURAIJAM SOMOI SINGH vs. STATE OF MANIPUR 547 Council in Chhatrakumari vs. Mohanbikram (1931) PC 196. Therefore, the position of the respondent Nos.2 and 3 is that of a creditor. "These respondents may have right to sue. It has also to be seen that on the strength of an agreement & for sale if a suit is filed for specific performance of contract aod a decree is obtained thereof and get the property in execution of the said decree nothing will be left. They will be totally deprived of their money. Itis welsettled that in a company there is public element. The purpose of winding up proceeding is aimed at that. Therefore, in my opinion one creditor alone should not get the benefit to the exclusion of the other creditors. It has been mentioned in this case b that there is a suit pending for specific performance of contract in civil Court filed by the respondent No.2 against the respondent No. 1. If the suit is decreed and the 2nd respondent gets the property the other creditors will be deprived of the money that was spent as from the evidence of the respondent No.2 as well as the petitioner no other peroperty is left to the company. In such situation it should be the endeavour of the Court to see that all creditors should get some c money but of it and the respondent No.2 should not take the benefit. Various .amounts are due to the petitioner which have not been paid by the company. It is true that no notice was issued under section 434 of the Act. Section 434 envisages mat when a notice is served under that section in the manner prescribed and if the payment is not made within a period of three weeks it will be presumed that j the company is unable to pay its debts. In my opinion this only gives a presumption that the company is unable to pay its debts. Section 434 envisages mat when a notice is served under that section in the manner prescribed and if the payment is not made within a period of three weeks it will be presumed that j the company is unable to pay its debts. In my opinion this only gives a presumption that the company is unable to pay its debts. Even without serving such notice if it can be provided that the company is unable to pay the amount the Court cannot ignore the fact that the company was unable to pay the amount. It is the case of the petitioner as well as the respondent No.2 that the company is almost defunct. Therefore, merely because the notice under section 434 was not e served it cannot be Said that the company is unable to pay its debts. As there are ample materials before this Court that the company is unable to pay its debts of the creditors, therefore, in the interest of all creditors, in my'opinion, the company should be wound up. 21. In the result, I order that the respondent company^jaanaiJy, Nimo4ia Plantations and Industries Private Limited, be wound up under the,provisions of f the Companies Act (1 of 1956) and the Companies Court Rate 1959. The parties shall bear their own costs. Let steps be taken according to law. 199T(1) Gauhati Law Journal 547 (IMPHAL BENCH) (BEFORE P. K. SARKAR AND H. K. KUMAR SINCJH, JI) 8 KHURAIJAM SOMOI SINGH Appellant, Versus STATE OF MANIPUR Respondent. Criminal Jail Appeal No.2 of 1992 decided on 16.8.96. Indian Penal Code-Section 84-Insanity of mind-Exception to general T law contained in Penal Code-Being an exception burden lies on accused. Para 3 548 GAUHATI LAW JOURNAL 19^(1) GLJ Indian Penal Code-Section 6 and Evidence Act, 1872, Section 105- Extraordinary provision obligates the Court to consider whether a case is covered by exception under Chapter IV of Penal Code-Obligation in section 6 should be read as proviso to section 105 of Evidence Act Para 3 a Indian Penal Code-Section 84-Insanity of mind-Accused had no grudge, illwill or animosity against deceased-Suddenly pricked up dao and dealt blows on body of deceased-No enmity or illwill against deceased step father-After commission of offence did not make any attempt to flee away, instead threatening to kill others-Held, Conduct of accused immediately after occurrence indicates unsoundness of mind-Conviction .set aside. b • ' Para5 Criminal Proceeding-Preponderance of probability-Evidence of prosecution witnesses, Medical Officer and confinement of accused in lunatic jail led to conclusion that accused was of unound mind at the time of occurrence. Para 5 Criminal Procedure Code, 1973-Section 335-Accused committed . c murder with unsound mind-Statutory obligation of trial Court to follow meticulously provisions of section 335. Para 6 Case law relied on--Lohit Chandra Das vs. State of Assam, (1986) 1 GLR 299; Dayabhai Chaganbhai vs. State of Gujrat, AIR 1964 SC 1563 ; Ratan Lal vs. State of MP, AIR 1971 SC 778 ,1971 Crl LJ 654; Abdul Latiff vs. State of Assam, 1981 Crl LJ 1205; Kumar Sunilal Deb vs. State of Assam, (1981V1 GLR 120. Advocates appeared in the case-Mr. Kh. Nimaichand Singh, Amicus Curiae for the appellant; Mr. L. Shyamkishore Singh, Govt Advocate, Manipur for the respondents. JUDGMENT AND ORDER This is an appeal against the conviction of the accused Shri Khuraijam e Somoi Singh under section 302 of the IPC sentencing him to suffer rigorous imprisonment for life passed by Sri Birendra Kumar Sharma, the learned Additional Sessions Judge, Manipur West, Imphal in Sessions Trial Case No.6/ Wl/91 dated 20.6.92. 2. Prosecution case is that the accused K. Somoi Singh committed the murder )f his step father A. Sarangkhomba Singh of Waikhong Laimanai Village by / issaulting the deceased with a Haothang (dao) and axe on the 3rd day of December, 1982 at about 12.40 PM just in the very house of the deceased. The nurder was witnessed by the daughter of the deceased (PW1) and the victim luccumbed to injuries on the spot. Local people and police rushed to the spot ind the accused was arrested alongwith the weapons. A case was registered on he complaint of the PW 1 and the police commenced investigation and on £ ompletion thereof, submitted a charge sheet against the accused who in due ourse was committed to the Court of Sessions to stand his trial. The prosecution xarained as many as 11 witnesses including the doctor and 3 (three) police •fficers. OnJ>ehalf of the accused 2 (two) witnesses were examined. Dr. Narendra lingb (PW H) rield the post mortem examination on the dead body of / l, Sarangkhomba Singh and proved the injuries in consequence of which A. **•.:*'•, .;»:•- •-• *'••'.'•••• s • ' KHURAIJAMSOMOISINGHVS.STATEOFMANIPUR 549 Sarangkhomba Singh had died. OnJ>ehalf of the accused 2 (two) witnesses were examined. Dr. Narendra lingb (PW H) rield the post mortem examination on the dead body of / l, Sarangkhomba Singh and proved the injuries in consequence of which A. **•.:*'•, .;»:•- •-• *'••'.'•••• s • ' KHURAIJAMSOMOISINGHVS.STATEOFMANIPUR 549 Sarangkhomba Singh had died. PW 1 to PW 7 are the witnesses to prove the murder. The plea taken by the defence was that of insanity. The accused, while under examination stated that he was totally unaward as to what he had done a even he could not recollect how the deceased died, he however stated that he assaulted a man whom he saw as tiger. 3. The sole contention raised before us is that the accused was of unsound mind at the time when he went out, picked up the dao and dealt dao blows, he was incapable of knowing the nature of the acts or that he was doing what was either wrong or contrary to law. Indeed, nothing is an offence which is done by b a person of unsound mind under the circumstances set out above. It is a general exception to the rule contained in Chapter IV of the Indian Penal Code. To bring a case within the ambit of section 84, it is said the burden is on the prisoner. Insanity or unsoundness of mind is an exception to the penal law. The fundamental principle of criminal jurisprudence is that an accused is presumed ' to be innocent and therefore, the burden lies on the prosecution to prove all the c essential ingredients of the offence beyond reasonable doubt. In a case of homicide as well as offence of causing hurt or grievous hurt the prosecution must prove beyond reasonable doubt the requisite intention or knowledge ingrained under section 299,326 and 324 of the Indian Penal Code. The burden never shifts and it always rests on the prosecution. Section 84 Indian Penal » Code provides an exception to the general rule contained in the Penal Code where the plea of the accused is unsoundness of mind which incapaciated his faculities to know the nature of his acts or what he was doing was either wrong or contrary to law. Section 84 Indian Penal » Code provides an exception to the general rule contained in the Penal Code where the plea of the accused is unsoundness of mind which incapaciated his faculities to know the nature of his acts or what he was doing was either wrong or contrary to law. This being an exception attracts section 105 of the Evidence Act, which lays down the burden of proving the existence of the circumstances to bring the case within the said presumption and continue to. presume the absence e of the exceptional circumstances. However, section 105 of the Evidence Act must be read along with the definition of the expressions 'shall presume* in section 4 of the Evidence Act and the combined reading of both the sections bring in for that the Court shall record the absence of the exceptional circumstances as proved, unless after considering the matters before it, the Court believes that the said circumstances existed or their existence was so probable / that a prudent man ought, under the circumstances of the case, would act upon the circumstances did exist. The presumption that such circumstances did exist must be put forward by the accused. The material must be sufficient at least to make a reasonable person to believe the existence of the said circumstances probable and to act upon them. The materials may be oral evidence, documentary evidence, presumptions, admissions or may stem from the prosecutions evidence. 8 The accused is to raise a reasonable doubt in the mind of the Judge to ponder as to whether the accused had the requisite criminal intention described in the section 299 and/or other provisions of the Penal Code. If the Judge has a reasonable doubt he has to acquit the accused for in that event the prosecution will have failed to prove conclusively the guilt of the accused. If the Judge has a reasonable doubt he has to acquit the accused for in that event the prosecution will have failed to prove conclusively the guilt of the accused. We are of the , view that the rule of burden of proof in the context of the plea of insanity are : (a) that the prosecution must prove beyond reasonable doubt that the offence 550 GAUHATI LAW JOURNAL 1997(1)GLJ was committed by the accused that the requisite 'mens rea' and the burden continues from the beginning till the end of the trial(b) that it is rebuttable presumption thait the prisoner was not insane when he committed an offence in the sense set forth in section 84 Indian Penal Code, (c) that the accused may a rebut the presumption of sanity at the relevant time bringing the case within section 84 IPC by producing oral, documentary, circumstantial and other materials and he may discharge the burden by establishing a reasonable probable case. The accused is not called upon to establish the element of section 84 IPC by producing evidence beyond reasonable doubt and (d) that even the accused fails to establish affirmatively or conclusively that he was of unsound m iad and b committed the act under the circumstances set out in section 84 but raises a reasonable doubt in the mind of the Court as regards presence of essential ingredients of the offence, which of course includes, 'mens r§a', the requisite criminal intention, the Court would be entitled to acquit the accused on the ground that the general burden of proof resting on the prosecution was not discharged. We are also of the view that section 6 of the IPC is an extra ordinary c provision which obligates the Court to consider whether case is covered by any of the exceptions under Chapter IV of the. IPC, section 6 of the IPC, in our I opinion, should read as a proviso to section 105 of Indian Evidence Act. That apart, section 6 of the Code imposes statutory obligation on the Court to consider as to whether the case is covered by exception or not. IPC, section 6 of the IPC, in our I opinion, should read as a proviso to section 105 of Indian Evidence Act. That apart, section 6 of the Code imposes statutory obligation on the Court to consider as to whether the case is covered by exception or not. The view that we have * expressed is drawn from the decisions of this Court in Lohit Chandra Das vs. State of Assam, (1986) 1 GLR 299 which is passed on certain decisions of the Apex Court in Dayabhai Chaganbhai vs. State of Gujrat, AIR 1964 SC1563, Ratan Lal v*. Stateof MP, AIR 1971 SC 778 :1971 Crl LJ 654, Abdul Latiff vs. State of Assam, 1981 Crl LJ 1205 and Kumar Sunilal Deb vs. State of Assam, (1981) 1 GLR 120. ' e 4. In this connection, it relevant to mention that the accused after his arrest and till the commencement of trial before the Sessions Judge was undefended and the Magistrate before whom the accused was produced first after the arrest was unaware about the insanity of the accused. Accofdingly, the Magistrate sent the accused to the judicial custody in prison. During the trial before the Sessions Judge While the plea of insanity was raised, the Sessions Judge made / an enquiry by taking the evidence of Medical Officer, the Jailor and Assistant Jailor of the prison. The evidence of the aforesaid witnesses were taken as CWs 2 and 3 and they were examined on 12.2.91,20.4.91 and 6.5.91 respectively. CW 1, Dr. Eoareflikam Surchandfa Singh is a Specialist in Psychiatry and he has examined the accused on 26.9.90. Dr. L. Surchandra Singh after examining the accused came> to the conclusion that the accused was suffering from 8 schi2»phreffi$M?$ychosis. It is further stated by CW 1 that such patient are likely to be aggressive, even violent at the time of illness and the accused will not be in a posMofl-to know the consequence of his act or in otherwords what he is doing. CW2;, Tlibkchom Subaschandra Singh is the Jailor of Sajiwa Jail who stated in his evidence that only lunatic patient were transferred in Sajiwa Jail , and the accas«dvWa» transferred to Sajiwa Jail in 1989 from the Central Jail,