Judgment :- K.A. Mohamed Shafi, J. This petition under S.433 (e) of the Companies Act is filed by the petitioner for winding up of the respondent-company. 2. The respondent is a Private Ltd. Company incorporated on 4th May, 1993 under the provisions of the Companies Act engaged in the business of manufacturing, designing, printing, processing, purchasing, exporting, importing, selling and dealing in Silk Sarees and other silk materials. The petitioner is a dealer in sarees particularly silk sarees in Coimbatore. The respondent used to place orders with the petitioner for supply of sarees in the course of the business and the petitioner jeed to supply sarees as per the orders. 3. According to the petitioner, they supplied sarees worth Rs. 45,51,830/- under invoice Nos. 5087 to 5097 dated 1.2.1994 and invoice Nos. 5360 to 5369 dated 25.5.1994. Deducting a sum of Rs. 23,20,945/- being the value of the goods returned on various dates, a sum of Rs. 20,05,150/- was due to the petitioner from the respondent in that transaction. Subsequently, the respondent paid a sum of Rs. 9,50,0007* on various dates towards part payment of the total outstandings. An amount of Rs.. 10,55,150/- is due and payable by the respondent to the petitioner for the goods supplied. The respondent is also liable to pay interest at 18% per annum as per the trade usage and custom since it is a commercial transaction. Therefore, the balance amount inclusive of interest due from the respondent to the petitioner as on 11.12.1995 in the above transaction is Rs. 15,76,040/60. The respondent has not paid the amount in spite of demands and the registered notice caused to be sent on behalf of the petitioner. In that registered notice it was clearly stated that in case the respondent fails to pay the amount within 21 days the petitioner will initiate winding up proceedings as provided under S.433 of the Companies Act. 4. The respondent has caused to send a reply denying the claim made by the. petitioner and disputing the liability. The respondent had admitted their liability in the letter dated 7.2.1995 sent by them to the petitioner and promised to pay the amount. Several suits are pending against the respondent filed by the financiers, dealers and suppliers of the respondent. The petitioner has filed O.S. No. 1621/95 for the recovery of Rs. 15,76,040.60 with interest thereon against the respondent before the Sub Court, Coimbatore. Several suits are pending against the respondent filed by the financiers, dealers and suppliers of the respondent. The petitioner has filed O.S. No. 1621/95 for the recovery of Rs. 15,76,040.60 with interest thereon against the respondent before the Sub Court, Coimbatore. The petitioner understands that the respondent is trying to remove the goods from the present business premises and to start fresh business under different names at various places. The respondent has become insolvent and neglected to pay its debts. Therefore, in order to preserve the assets and to protect its creditors it is necessary to wind up the respondent-Company. 5. The respondent filed a counter affidavit denying the allegations made by the petitioner and contending as follows. The respondent does not owe any debt to the petitioner as alleged by the petitioner. The petition is filed with malafide intention to pressurize the respondent and to extract maximum amount possible on a disputed claim based on substantial grounds. In almost all the consignments sent by the petitioner during the last three years there used to be damaged items which the respondent had returned on all occasions. It is true that sarees worth Rs. 45,51,830/- under invoice Nos. 5087 to 5097 dated 1.2.1994 and invoice Nos. 5360 to 5369 dated 25.5.1994 were supplied by the petitioner, but major portion of the goods sent by the petitioner were damaged and defective. The petitioner has taken back part of those damaged goods and requested the respondent to dispose of the balance at any reasonable price. But the respondent could»not dispose of those damaged goods in spite of their best efforts and offering to sexton more than 50% reduction. Though the respondent requested the petitioner to remove the damaged sarees worth Rs. 6,15,000/-, the petitioner did not take back the same. At last a registered notice dated 15.1.1996 was caused to be sent by the respondent to the petitioner calling the petitioner to take back the goods and informing that in case of failure the respondent will dispose of the same at the risk and loss of the petitioner. Though again a registered notice dated 28.5.1996 was sent the petitioner did not settle the issue. The respondent issued 19 post-dated cheques for Rs. Though again a registered notice dated 28.5.1996 was sent the petitioner did not settle the issue. The respondent issued 19 post-dated cheques for Rs. 50.000/- each towards the value of the sarees purchased from the petitioner drawn on Federal Bank and since the Federal Bank stopped credit facility to the Company the respondent had requested the petitioner not to present the cheques drawn on Federal Bank for encashment. In spite of that request and payment of the amount by demand draft the petitioner presented the cheques for collection, got dishonoured and filed a complaint in C.C. 398/95 against the respondent. The respondent approached the Madras High Court in Crl. R.C. No. 37/96 against that matter and the Madras High Court remitted that matter to the judicial Magistrate No. II, Coimbatore to record the memo for withdrawal of the complaint filed by the petitioner. The business of the respondent company is running smoothly and the respondent is in a sound financial position and commercially solvent and is able to meet its correct demands as and when fall due. The petitioner has already filed O.S. No. 1621/95 before the Sub Court, Coimbatore with regard to the same subject matter. Since there is a bona fide dispute with regard to the claim made by the petitioner on substantial grounds which requires investigation in-depth, civil suit is the proper remedy and the petitioner has already resorted to that remedy. Therefore, the above petition to wind up the respondent-company which is solvent and has never neglected to pay its debts is not sustainable. 6. From the contentions raised by both sides it is clear that this Court has to consider two points in this case viz. whether the above petition for winding up of the respondent-company is maintainable in view of the fact that the petitioner has already filed a suit in O.S.1621/95 before the Sub Court, Coimbatore for realisation of the very same amount, and whether the petitioner is entitled to an order of winding up of the respondent -company since there is a bona fide dispute with regard to the claim made herein, between the petitioner and the respondent. 7. The petitioner has filed a reply affidavit controverting the allegations made by the respondent in the counter affidavit. 8. 7. The petitioner has filed a reply affidavit controverting the allegations made by the respondent in the counter affidavit. 8. The petitioner though has admitted that O.S.1621/95 is filed by them for realisation of the very same amount against the respondent before the Sub Court, Coimbatore, has contended that pendency of that suit is no bar for institution of the above winding up proceedings. The petitioner has further contended that there is absolutely no bonafide dispute between the petitioner and the respondent with regard to the claim made by the petitioner so as to disentitle the petitioner from claiming a winding up order against the respondent. According to the petitioner, the respondent has put forward an absolutely untenable and mala fide contention that there is a bona fide dispute with regard to the amount claimed by the petitioner from the respondent in this case. 9. The counsel for the petitioner submitted that the goods involved in this case were supplied by the petitioner to the respondent as per invoices dated 1.2.1994 and 25.5.1994 and the dispute with regard to the damaged nature of the goods is raised by the respondent only in 1996 very belatedly after the petitioner claimed the amount from the respondent and the suit was instituted for recovery of the amount before the Sub Court, Coimbatore. Therefore, according to the petitioner, the contention of the respondent that there is bonafide dispute with regard to the amount claimed by the petitioner is absolutely mala fide and untenable. 10. There is no dispute with regard to the transaction between the petitioner and the respondent. In para 8 of the counter-affidavit filed by the respondent the transaction is admitted and it is contended that a major portion of the goods supplied were damaged and though the petitioner took back a portion of the damaged goods, the balance is lying with the respondent as it could not be disposed of at a lesser rate as requested by the petitioner and the petitioner did not take back that portion of the damaged goods. 11. The petitioner has contended that out of the total value of the goods worth Rs. 45,51,830/- sent by the petitioner, deducting Rs. 23,20,945/- being value of the goods returned on various dates the balance amount of Rs. 20,05,150/- was due from the respondent and out of that amount the respondent paid Rs. 9,50,000/- on various dates. 11. The petitioner has contended that out of the total value of the goods worth Rs. 45,51,830/- sent by the petitioner, deducting Rs. 23,20,945/- being value of the goods returned on various dates the balance amount of Rs. 20,05,150/- was due from the respondent and out of that amount the respondent paid Rs. 9,50,000/- on various dates. Thus a balance amount of Rs. 15,76,040.60 being the principal amount of Rs. 10,55,150/ - and interest thereon at 18% per annum as on 11.12.1995 is due from the respondent to the petitioner. Therefore, it is clear from the contentions put forward by both sides that the petitioner has only claimed the value of the goods after deducting the value of the goods already returned by the respondent and part payment made by the respondent. 12. The respondent has produced Exts. R1 to R3 copies of the debit notes issued by the respondent to the petitioner with regard to the damaged goods, in support of the contention that the goods supplied by the petitioner to the respondent were damaged goods and returned by the respondent to the petitioner. 13. As already noted the claim made by the petitioner in this case is with regard to invoice Nos. 5087 to 5097 dated 1.2.1994 and invoice Nos. 5360 to 5369 dated 25.5.1994. But Exts. R1 to R3 refer to different invoice numbers. Ext. R1 refers to bill Nos. 4465 to 4473 dated 11.8.1993. Ext. R2 refers to bill No. 4467 dated 11.8.1993, 27.5.1993 and 17.12.1993. Ext. R3 refers to bill dated 27.5.1993, 11.8.1993 and 17.12.1993, without any bill numbers. Therefore, Exts. R1 to R3 though pertain to damaged goods, are not in respect of the consignments involved in this case. Along with the reply affidavit filed by the petitioner they have produced Annexure D series, out of which Annexure D1 to D6 are the debit notes regarding purchase return pertaining to the return of goods worth Rs. 17,85,010/- out of the consignments involved in this case and Annexures D7, D8 and D9 are the debit notes regarding the return of damaged goods worth Rs. 2,87,620/-. It is contended by the petitioner that the goods covered by Ext. R1 series were returned along with the goods returned as per Ext. G series produced along with the reply affidavit, along with other goods returned long after the supply by petitioner. 2,87,620/-. It is contended by the petitioner that the goods covered by Ext. R1 series were returned along with the goods returned as per Ext. G series produced along with the reply affidavit, along with other goods returned long after the supply by petitioner. Therefore, the allegation made by the respondent that out of the goods worth Rs. 45,51,830/- supplied by the petitioner more than half was damaged goods, is not true or correct. As already noted it is also clear from the contention of the petitioner that the petitioner has only claimed the balance amount after deducting the value of the goods returned and. the part payment made by the respondent. 14. Annexure C to the Company Petition filed by the petitioner is the letter dated 7.2.1995 sent by the respondent to the petitioner wherein it is stated that due to some financial difficulties the respondent could not settle the dues of the petitioner and the respondent can have normal dealings with the petitioner as soon as the pending goods are cleared in April. There is no mention about any damaged goods supplied by the petitioner or the dispute regarding any damaged goods supplied, between the petitioner and the respondent in that letter. It is also pertinent to note that even though the contention regarding damaged goods is with regard to the consignment sent as per invoice dated 1.2.1994 and 25.5.1994, the objection with regard to the damaged goods is raised very belatedly only on 15.1.1996 as evidenced by Ext. R4. Annexure H filed by the petitioner along with the reply affidavit is the copy of the letter dated. 26.6.1995 sent by the respondent to the petitioner requesting the petitioner not to present the cheques for encashment since they have changed their bankers and promising to send demand draft for the cheques within a fortnight. Annexure I is the copy of the letter dated 5.8.1995 sent by the respondent to the petitioner enclosing a demand draft for Rs. 50,000/- and requesting to return the cheque for the demand draft sent and promising to sent demand draft for the other cheques within a fortnight. Annexure J is the copy of the letter dated 9.8.1995 sent by the petitioner to the respondent in reply to Annexure 1 acknowledging receipt of DD for Rs. 50,000/- and requesting to return the cheque for the demand draft sent and promising to sent demand draft for the other cheques within a fortnight. Annexure J is the copy of the letter dated 9.8.1995 sent by the petitioner to the respondent in reply to Annexure 1 acknowledging receipt of DD for Rs. 50,000/- and intimating that they will not further wait for encashing the cheques and threatening legal action if the cheques are dishonoured. 15. The petitioner has contended that since the respondent did not sent the D.D. nor paid the amount even after the cheques were dishonoured they filed a criminal complaint before the Magistrate's Court Coimbatore and that case was withdrawn as the respondent paid the amount due as per the dishonoured cheques. Though the respondent has contended that they filed Crl. R. C. 37/9 6 before the Hon'ble High Court of Madras against C.C. 398/95 and the respondent's contentions were accepted by the Madras High Court and the case was remitted to the Judicial Magistrate to record the memo for withdrawal of the complaint made by the petitioner, Annexure- K, true copy of the order passed by the Madras High Court in Crl. R.C. No. 37/96 dated 12.4.1996 establishes that the respondent paid the amount in full and the whole claim made before the trial court was settled by the time the Crl. R.C. came up for hearing and the Crl. R.C. was dismissed as unnecessary remitting the matter to the Judicial Magistrate-II, Coimbatore to record the memo to be filed for withdrawal of the complaint. Therefore, the contention of the respondent that the Madras High Court accepted the contention put forward by the respondent and remitted the case to the trial court is not true and in fact the respondent paid the entire amount and the matter was settled before the Crl. R.C. came up for hearing before the Madras High Court. 16. On a careful consideration of the contentions put forward by the petitioner and the respondent and documents produced by them in this case, it is clear that the contention of the respondent that a bonafide dispute with regard to the claim made herein exists between the petitioner and the respondent and as such the above petition for winding up of the company is not maintainable, cannot be sustained. 17. 17. The principles laid down in the various decisions relied upon by the counsel for the respondent to the effect that when there is a bonafide dispute regarding the quality and quantity of the goods supplied winding up cannot be ordered and winding up cannot be sought to enforce a debt which is bona fide disputed etc. are not applicable to the facts of this case. It is well settled that when the defence set up is not in good faith and the dispute raised is not bona fide or vague winding up order can be passed. 18. The next question to be considered is whether the petitioner is entitled to seek an order of winding up of the respondent-company in respect of the very same claim for the enforcement of which a civil suit is already filed by the petitioner and pending before the Sub Court, Coimbatore. 19. In the decision in Central Bank Ltd. v. Sukhani Mining & Engg. Indus. P. Ltd. (1977) 47 Comp. Cas. 1) a single judge of the Patna High Court has held that winding up proceedings is not merely for the benefit of the petitioner but for all shareholders, creditors or contributors of the Company and therefore winding up proceedings could not be stayed or dismissed merely because the creditor has filed a suit against the Company. 20. In the decision in State Bank of India v. Hegde & Golay Ltd. (1987) 62 Comp. Cas. 239) it was held that the Company Court can proceed with the winding up proceedings once it has come to the conclusion that it has not been a case of bona fide and tenable defence made out. 21. In the decision in V.K. Jain v. Richa Laboratories (P) Ltd. (1993) 78 Comp. Cas. 283) a single judge of the Delhi High Court has held that the proceedings for winding up will not be invalidated if a suit is filed by the petitioner by way of abundant caution to save the claim getting barred by limitation. 22. I am in respectful agreement with the above principles of law laid by the various High Courts referred to above. 22. I am in respectful agreement with the above principles of law laid by the various High Courts referred to above. Therefore, the contention that as the petitioner has already filed a suit before the Sub Court, Coimbatore for realisation of the amount alleged to have been due from the respondent the above petition to wind up the respondent-company is not sustainable, cannot be accepted. 23. The respondent has contended that it is a solvent Company and it can discharge its liabilities and run the company profitably and therefore, the above petition seeking to wind up the Company has to be dismissed. 24. It is well settled that winding up cannot be sought as a means of recovery of debt due from the Company and winding up order can be passed only if the Company is unable to meet its current demands and the existing and probable assets of the Company is insufficient to meet its existing liability. If the Company is financially sound and in a position to pay its liability, it cannot be ordered to be wound up under S.433(e) of the Companies Act. But the Company should establish that it is capable of discharging its existing liabilities. 25. In this case, the petitioner has alleged that the respondent does not possess sufficient assets to discharge its liabilities and a, number of suits are filed by the financiers and other creditors of the respondent and the respondent is in a state of commercial insolvency. Though in the counter-statement, the respondent has contended that it is solvent and has got huge commercial transactions running into crores of rupees annually, apart from the allegations made in the counter-affidavit absolutely no evidence is adduced by the respondent to prove that the respondent is solvent and able to meet all its current liabilities. Therefore, in the absence of reliable and acceptable evidence adduced by the respondent to the effect that the respondent-Company is in a solvent position and commercially solvent and able to meet its current liabilities, that contention of the respondent cannot be accepted. Therefore, it is clear that the petitioner has made out sufficient grounds to order winding up of the respondent-Company under S.433(e) of the Companies Act and all the objections raised by the respondent in this case are not sustainable. Hence the objects raised by the respondent are overruled. Therefore, it is clear that the petitioner has made out sufficient grounds to order winding up of the respondent-Company under S.433(e) of the Companies Act and all the objections raised by the respondent in this case are not sustainable. Hence the objects raised by the respondent are overruled. Publish in one issue of Mathrubhumi daily, Kochi Edition and Indian Express, Kochi and Coimbatore Editions, and Kerala Gazette.