Judgment :- I.P. MUKERJI, J. This is a winding up application. It was instituted long ago, in or about March 1989. The petitioning creditor is a company by the name of Jardine Henderson Ltd. The company sought to be wound up is Howrah Mills Company Limited. They will henceforth be referred to as petitioning creditor and company respectively. It appears that way back in 1987 an enquiry into the affairs of this company was being made by the Board for Industrial and Financial Reconstruction. Section 22 of the Sick Industrial Companies Act (Special Provisions) 1985 (SICA) enacted inter alia that a winding up application could not be filed or proceeded with during pendency of proceedings before the said Board. This winding up application was filed on or about 31st March 1989 after such enquiry was commenced by the said Board. Therefore, the winding up application remained stayed. Now, on or about 10th July 2008 this company came out of the protection under the said Act. By another provision of the said Act the whole period of pendency of such proceedings before the Board was to be excluded for the purpose of calculating the period of limitation. Therefore, the period of limitation stopped running from the time enquiry was started by the said Board on or about 1st April 1987. For quite sometime, from the early 80’s the petitioning creditor was assisting the company to run its business. There is absolutely no doubt in my mind about this. This fact is not denied in the reply to the statutory notice or in the affidavit in opposition. However, from 1st April 1987 the management of the company changed. It has been submitted before me that although the management of the company changed, the managing director remained the same. The cause of action in this winding up application is founded on a claim by the petitioning creditor for payment, for providing accommodation and rendering various services and supplying miscellaneous items to the company for the said period upto 31st March 1987. The sum claimed in the winding up notice dated 24th November 1988 is Rs.37,43,291/- together with interest thereon @ 18% per annum from the date of alleged submission of bills on that account. The winding up notice was very short, relying on statements annexed to it to substantiate the claim. That winding up notice was replied to on 19th December 1988. The winding up notice was very short, relying on statements annexed to it to substantiate the claim. That winding up notice was replied to on 19th December 1988. A more uncertain and evasive reply is difficult to comprehend. This is what was contained in the reply: “……… The present management of Howrah Mills Co. Ltd. has taken over charge in April, 1987 but uptil now several books and records of the company have not yet been handed over by your client………… We are not aware of any open mutual current account stated to have been maintained by your client. The books and records of Howrah Mills Co. Ltd. which have been handed over by your client so far do not indicate that Howrah mills Co. Ltd. had maintained any open mutual current account with your client. The books of accounts, upto 31.03.1987 which have been handed over by your client and which were maintained by your client, suffer from several discrepancies ………………….. You have referred to ‘agreement’. Please therefore, inform us about the date of such agreement and forward copy of such agreement. In our records, there is no such agreement available. You have also referred to bills stated to have been raised on diverse dates. Will you be kind enough to give reference numbers and dates of such bills and forward us the copies of such bills. In our records as received so far we neither find any bills relating to the statement enclosed with your letter nor we find any agreement. In the statement enclosed to the letter, it has been stated that amounts as mentioned in the statement have been due as on 18.11.1988, but you have omitted to mention from which the period. It is necessary for us to know the period during which the amounts mentioned in your better are claimed to have arisen. The company under the new management that is to say from 1st April, 1987 have not taken any of the services or facilities or occupied nay accommodation from your client nor have the new management made any gunny export or availed of any of services of your client’s Gunny Export Department or Diamond Product Division or Agency Department we have not purchased any raw jute from your client. When such services rendered or purchases made or accommodation provided? Please enlighten us. When such services rendered or purchases made or accommodation provided? Please enlighten us. You will appreciate that your client was in complete charge and control of the affairs of Howrah Mills Co. Ltd. upto 31.3.1987. It is easy for your client to raise any claim against the company when it was under their control and books and records were also in their custody. Therefore we must know the period during which the claims mentioned in the letter have arisen and the documentary basis for such claims. ……………..” It is absolutely plain that the company prior to 1st April 1987 had availed of accommodation provided by the petitioning creditor at 4 Clive Row, Kolkata – 1 and availed of services from the company. This is evident from a contemporaneous letter of the company to the petitioning creditor dated 15th May 1987 to the following effect. “Jardine Henderson Limited, 4, Clive Row, Calcutta – 700 001 Dear Sirs, Accommodation and service agreement Further to our discussions, we hereby confirm that we would not be availing the accommodation and connected facilities effective from 1st April 1987 as the Administrative Office of the Company has been shifted from the premises at 4, Clive Row, Calcutta – 700 001 and we have vacated the same. We also confirm that we would not be needing the services so far provided by Jardine Henderson Ltd., with effect from 1st April, 1987 excepting that of Share Registration services for which we agree to pay you at a monthly rate as mutually agreed between us.” As the company went under the umbrella provided by the Sick Industrial Companies (Special Provisions) Act, 1985 on and from 1st April 1987, the claims of the petitioning creditor, prior to 31st March 1984 in my opinion, would be barred by the laws of limitation, on the assumption that the period of limitation is three years for all claims. [S. 22(5) of SICA read with the Limitation Act, 1963] I had invited the parties to submit a calculation sheet to show which of the claims were barred by limitation. According to such calculation sheet submitted by the company and not denied by the petitioning creditor, Rs.11,91,365 is barred by limitation. Now, the balance claim is for Rs.28,63,805. That is the principal claim. Interest is claimed on it. According to such calculation sheet submitted by the company and not denied by the petitioning creditor, Rs.11,91,365 is barred by limitation. Now, the balance claim is for Rs.28,63,805. That is the principal claim. Interest is claimed on it. The details and the documents in support of the claim are annexures ‘A’, ‘B’ and ‘C’ and ‘E’ to ‘R’ of the petition. They are statements of dues, some letters, copy bills, invoices and so on. There is nothing to show that these statements were accepted by the company. Or even that the bills were received by them. The company has flatly denied that they have received the bills or that any amount mentioned there is payable. While arguing the matter learned counsel for the company submitted that as the petitioning creditor was managing the company at that point of time they are in possession of the records of that period. In any event the company is not in possession of such records. Since the petitioning creditor was in management of the company it was possible for them to prepare false evidence of a claim. It is very clear to me from the evidence that the petitioning creditor was in management of the company, substantially. The details of such service provided by the petitioning creditor are not available from the records of this case but the admission by the company in the letter dated 15th May 1987 is clear enough to establish that the company availed of space on 4, Clive Row, Kolkata – 1 to carry on its business. Further it availed of “connected facilities”. The accommodation charge claimed out of the said total claim of Rs.28,63,805/- is Rs. 2,04,360/- from 1st April 1984 to 31st March 1987. It is true that the petitioning creditor is unable to produce any documents from where it may be reasonably plain that the claimed amount is payable to them. What I do not appreciate is the attitude of the company that they will pay nothing. Even after admission that they occupied a part of the property of the petitioning creditor and even after admission that they availed of the services of the petitioning creditor. What I do not appreciate is the attitude of the company that they will pay nothing. Even after admission that they occupied a part of the property of the petitioning creditor and even after admission that they availed of the services of the petitioning creditor. If the stand of the company would have been, on the basis of the letter dated 15th May 1987, that they were prepared to pay some part of the claim on account of rent or licence fee for occupation, I could have appreciated their conduct. As the substantial part of the debt cannot be established this application cannot be admitted on the ground that the company is prima facie unable to pay its debts. However, a company may be wound up if the court is of the opinion that it is just and equitable that it should be so wound up. (See section 433(f) of the Companies Act, 1956) What are the circumstances in which the court is to form such opinion are not conclusively defined. Here, the only important ground taken by the company to resist the claim of the petitioning creditor is that no records are available to establish its claim. The apparent justification for such ground is that the petitioning creditor was to some extent responsible for management of the company during the period for which claim has been made. The controllers of the present company, having assumed management later do not have any records to justify the claim. According to the petitioning creditor all records are with the company. According to the company the petitioning creditor has taken them away. It is true, that the petitioning creditor has been unable to show even a formal receipt by the company of the bills, invoices and other documents appended to the petition. But nevertheless, the claim of the petitioning creditor which is based on these documents was advanced to the company by the statutory notice and thereafter by the petition. The response of the company to such claim was what I have indicated above. There is not a single letter during the relevant period when the company had asked the petitioning creditor to restore the records of the company, alleging that they have taken them away. If a company is unable to produce or maintain its records it is a fit ground to order its winding up on just and equitable grounds. There is not a single letter during the relevant period when the company had asked the petitioning creditor to restore the records of the company, alleging that they have taken them away. If a company is unable to produce or maintain its records it is a fit ground to order its winding up on just and equitable grounds. Further, the above conduct of the company shows they are somewhat lacking in commercial morality, which is another reason to order winding up on just and equitable grounds as discussed at page 3693 of the 16th Edition, 2006 reprint of Ramaiya on Companies Act. In any event, Rs.2,04,360/- is a very reasonable claim for occupation of the premises in question. This sum is prima facie payable by the company to the petitioning creditor. In the facts and circumstances above, I would admit the winding up application on just and equitable grounds and also on the ground that the company is prima-facie unable to pay the sum of Rs.2,04,360/-. However, I note that the balance claim of the petitioning creditor, has to be established in a suit. Therefore, this winding up application is admitted. The application should be advertised once in any English newspaper having circulation of over 50000 copies in West Bengal and any Bengali newspaper of like circulation. Such advertisement should be made within four weeks from date. Publication in the official gazette is dispensed with. List this application five weeks hence. The major part of this claim is relegated to suit. I think the court can set terms and conditions on the company in that prospective suit, for not proceeding with its winding up on just and equitable grounds. I propose to do so as it would, in my opinion, subserve the ends of justice. In the event, the company pays the sum of Rs.2,04,360/-to the petitioning creditor within two weeks from date and furnishes a bank guarantee for the sum of Rs. 10,00,000/- in favour of the petitioning creditor within that period and keeps it renewed till the suit is instituted by the petitioning creditor this winding up application may be mentioned for dismissal. In that period the petitioning creditor shall not encash the bank guarantee. If no suit is filed by the petitioning creditor within six weeks from date the company need not continue with the bank guarantee. In that period the petitioning creditor shall not encash the bank guarantee. If no suit is filed by the petitioning creditor within six weeks from date the company need not continue with the bank guarantee. If the suit is filed within such time continuance of the bank guarantee will abide by the orders to be passed in the suit. The part of the order for admission of the winding up application will remain stayed till 22nd November 2010 to enable the company to take steps as provided for in the order, to have the winding up application dismissed. Urgent certified photocopy of this judgment and order, if applied for, to be provided upon complying with all formalities.