JUDGMENT : K.A. Puj, J. The petitioning creditor, namely, M/s. S.M. Patel Iron Traders P. Ltd., has filed this petition under sections 433 and 434 of the Companies Act, 1956, for winding up of the respondent-company, namely, Sugam Construction P. Ltd., on the ground that the respondent-company has failed to discharge its liability of Rs. 60,35,985 (principal Rs. 46,84,094 and interest Rs. 13,51,891) as on October 15, 2008, towards the petitioner. 2. This court has issued notice on July 6, 2009. Pursuant to the notice, Mr. A.S. Vakil, the learned advocate appeared for the respondent-company. An affidavit-in-reply is filed on behalf of the respondent-company on August 25, 2009, denying the liability of the respondent-company. On behalf of the petitioner, affidavit-in-rejoinder is filed on February 22, 2010. The respondent-company has filed its affidavit-in-sur-rejoinder on April 5, 2010, to which affidavit-in-sur-rejoinder is filed on behalf of the petitioner on May 10, 2010. 3. Since the pleadings of the parties are completed, the petition is taken up for hearing. 4. Mr. S. N. Soparkar, learned senior counsel with Mrs. Swati S. Soparkar, learned advocate appeared for the petitioner. He submitted that the petitioner has been carrying on the business with the respondent-company for the last many years and a running account for the same is being maintained in the books of account of the petitioner. All the payments made by the company for the supplies are duly credited to its accounts. At the request and pursuant to various oral orders placed by the company with the petitioner during the financial year ended on March 31, 2007, the petitioner had supplied various materials to the company. Against the said supplies, the petitioner had raised various invoices from time to time for the orders placed. The details of the unpaid invoices along with the copy of the unpaid invoices are produced on the record of this petition. Along with the outstanding opening balance, the total dues at the end of the year amounted to Rs. 1,28,42,344. The material supplied by the petitioner was accepted by the respondent-company and no disputes were ever raised at any point of time about the price, quality and/or quantity of the same. The company has acknowledged the supply of all the materials by confirming the delivery challans. Considering various payments made by the company from time to time during the said financial year, totalling to Rs. The company has acknowledged the supply of all the materials by confirming the delivery challans. Considering various payments made by the company from time to time during the said financial year, totalling to Rs. 8,58,250 an amount of Rs. 46,84,094 remained outstanding. A copy of the ledger account of the company in the books of the petitioner for the period from April 1, 2006 to March 31, 2009, produced on the record of this petition shows that the outstanding dues of the petitioner from the respondent-company are Rs. 46,84,094. In spite of the number of requests and reminders, the said outstanding amount was not paid. Though substantial payment was outstanding towards the material supplied as per the petitioner's books of account, no further payment has been received by the petitioner from the company after March, 2007. 5. Mr. Soparkar further submitted that even as per the company's books of account, an amount of Rs. 48,84,092 has been confirmed as an outstanding amount to the petitioner. The same is duly reflected in the latest audited balance-sheet of the company as at March 31, 2007, which was signed by the concerned directors of the company on October 1, 2007. This confirms that the respondent-company has acknowledged the debt till that date without any dispute. Since no further payment has been made to the petitioner towards the admitted liability of legitimate outstanding dues, the same amount has to be carried forward in the subsequent balance-sheet as well. 6. Mr. Soparkar further submitted that as agreed between the parties, the payment for the said supply of materials was to be effected within 30 days from the date of issuance of invoice, failing which the company shall be liable to pay interest at 18 per cent. per annum for the delayed period. The petitioner has, therefore, claimed interest at 18 per cent. per annum on the aforesaid outstanding dues for the delayed period, which comes to Rs. 13,51,891 as on October 15, 2008 and further interest till the realisation of the dues. In spite of the repeated reminders, the company failed and/or neglected to make the payment. The petitioner was, therefore, compelled to send through its advocate a statutory notice under sections 433 and 434 of the Companies Act, 1956, on November 27, 2008, calling upon the company to pay to the petitioner the principal amount of Rs. In spite of the repeated reminders, the company failed and/or neglected to make the payment. The petitioner was, therefore, compelled to send through its advocate a statutory notice under sections 433 and 434 of the Companies Act, 1956, on November 27, 2008, calling upon the company to pay to the petitioner the principal amount of Rs. 46,84,094 along with interest at 18 per cent. per annum. The said notice was duly served at the registered office of the company on November 29, 2008. Though the company gave its interim reply on December 10, 2008, seeking time to give a detailed reply to the statutory notice, no reply was received either by the petitioner or by its advocate. The petitioner, therefore, had reason to believe that the company has lost its substratum and has ceased to carry on its business and was unable to pay its debts. The petitioner was also of the view that the company is commercially insolvent and is unable to discharge its debts in normal course of business. It is, therefore, in the interest of the creditors of the company to allow the company to function. It would, therefore, be just, necessary and expedient for protecting the interest of the company that the winding up order be passed. 7. In the affidavit-in-reply filed on behalf of the respondent-company, detailed background facts are given with a view to demonstrate that the present petition is nothing but an abuse of process of this court and is collusive in nature and filed with an oblique and mala fide motive. 8. Mr. A.S. Vakil, learned advocate appearing for the respondent-company submitted that the company was incorporated on March 13, 1984, under the provisions of the Companies Act, 1956. One of the main objects of the company is to carry on the business of builders and contractors. One Mr.Ushakant Patel and Naresh P. Modi were the initial directors of the company. At the first meeting of the company held on April 11, 1984, Shri Bhailalbhai Patel and one Shri Surendrabhai Patel came to be appointed as directors of the company. The authorised share capital of the company on the day of its incorporation was Rs. 5 lakhs divided into 1 lakh equity shares of Rs. 100 each and 4,000 unclassified shares of Rs. 100 each. On or around August 12, 1987, the authorised capital of the company was increased from Rs. The authorised share capital of the company on the day of its incorporation was Rs. 5 lakhs divided into 1 lakh equity shares of Rs. 100 each and 4,000 unclassified shares of Rs. 100 each. On or around August 12, 1987, the authorised capital of the company was increased from Rs. 5 lakhs to Rs. 10 lakhs divided into 8,000 equity shares of Rs. 10 each and 2,000 preference shares of Rs. 100 each by allotting 4,000 fully paid-up equity shares of Rs. 100 each and 1,000 fully paid-up preference shares of Rs. 100 each of the company. On or around January 25, 1990, one Mr. Pradeep Shringarpure, who had been working with the company for a long period came to be appointed as the executive director of the company. The said Pradeep Shringarpure was taken as a member of the board of directors of the company on or around May 21, 1990. In January 1996, one Mr. Arun S. Patel came to be appointed as director of the company. A resolution came to be passed on or around December 22, 2000, to open a current account with the State Bank of Saurashtra, New Delhi to be operated under individual signatures of either Shri Bhailalbhai Patel or Shri Ushakant Patel or Arun S. Patel. Around the year 2001 Bhailalbhai Patel, who was essentially based in Delhi agreed that his personal office in Delhi, admeasuring approximately 2,600 sq.ft. could be used by the company without charging any rent. 9. Mr. Vakil further submitted that on or around April 28, 2003, Shri Dipen Patel, s/o. Ushakant Patel was appointed as director of the company. During the period from April, 2006 to January, 2007, Shri Ushakant Patel and Dipen Patel committed serious irregularities in the matter of siphoning away of funds, withdrawing huge amounts of money by giving fake resolutions to the bank of the company, by giving advances to various parties purportedly for the work to be executed by the company though no such work was being executed by the company, by making payment of large amounts to labour contractors for jobs which were not that of the company, by withdrawing amounts from the account of the company to meet their personal expenses, by making payments towards invoices of suppliers of material, though no such material was ever supplied to the company. It is alleged in the affidavit-in-reply that the petitioner was also involved and was a beneficiary of the some of the nebulous, illegal activities and the large scale diversion/siphoning away of funds of the company done by Shri Ushakant Patel and Dipen Patel, directors of the company who were then in effective management and day-to-day control of the affairs of the company. 10. Mr. Vakil further submitted that all the accounts of the company up to the financial year ending March 31, 2006 and its tax returns were signed by Shri Ushakant Patel and/or Dipen Patel. Since the incorporation of the company in the year 1984 up to March 2006, the company's profits, if any, were very low as compared to the usual standards of the industry. During this period, the company's day-to-day management and affairs were being effectively managed and controlled by Shri Ushakant Patel and his son Dipen Patel. Since the profits of the company were very low as compared to the industry norms, around middle of the year 2006, Shri Bhailalbhai Patel suspected mismanagement, diversion and siphoning off of the funds of the company at the instance of Ushakant Patel and Dipen Patel. As a result, the said Bhailalbhai Patel approached Shri Ushakant Patel seeking his explanation on various issues. As no explanations, much less satisfactory explanations, were forthcoming, Shri Bhailalbhai Patel started looking into the affairs of the company and discovered the aforesaid various instances of mismanagement, diversion and siphoning off of funds at the behest of Shri Ushakant Patel and Dipen Patel. The same also revealed that during the year ending March 31, 2001, to year ending on March 31, 2006, the company showed an abysmally low net profit (before tax) ranging between 1 per cent. to 3 per cent., which was much below the industry norm of about 8 per cent. 11. Mr. Vakil further submitted that on December 11, 2006, a meeting of the board of directors of the company was convened. The said meeting was attended by Shri Bhailalbhai Patel, Ushakant Patel and Pradeep Shringarpure. Shri Bhailalbhai Patel presided as the chairman of the said meeting and various issues came to be discussed and it was resolved that prior consent of Shri Bhailalbhai Patel would be required before tendering for new contracts, to enter into any contracts, sub-contracts, joint ventures, agreement with the Central or State Governments or private enterprises. Shri Bhailalbhai Patel presided as the chairman of the said meeting and various issues came to be discussed and it was resolved that prior consent of Shri Bhailalbhai Patel would be required before tendering for new contracts, to enter into any contracts, sub-contracts, joint ventures, agreement with the Central or State Governments or private enterprises. It was also resolved that the bank accounts in the name of the company be jointly operated by any of the two directors namely Shri Bhailalbhai Patel, Ushakant Patel and Arun Patel on behalf of the company and that the said banks be authorised to honour cheques accordingly. It was also resolved that Shri Bhailalbhai Patel would be authorised to intimate the banks accordingly. It was further resolved that no director or employee of the company should be allowed to engage himself directly or indirectly in identical or similar nature of business which is in conflict with the interest of the company. Pursuant to these resolutions, Shri Bhailalbhai Patel addressed/exchanged necessary correspondence with the banks of the company. Shri Bhailalbhai Patel also issued various letters to Shri Ushakant Patel and Dipen Patel giving instructions to them for not indulging in any financial commitment without prior instructions of Bhailalbhai Patel. 12. Mr. Vakil further submitted that since Shri Bhailalbhai Patel had started taking actions against Shri Ushakant Patel and Shri Dipen Patel, they filed Company Petition No. 79 of 2007 before the Company Law Board, Principal Bench, New Delhi on June 6, 2007, under sections 397 and 398 of the Act. A detailed reply was filed by Shri Bhailalbhai Patel in the said company petition. The Company Law Board by its final judgment and order dated December 10, 2008, allowed the said company petition to the extent and in the manner indicated in paragraphs 13 and 14 of the judgment. In so far as paragraph 13 of the said final judgment and order dated December 10, 2008, is concerned, certain directions were issued considering the fact that there are allegations and counter allegations. Since the allegations of siphoning off of funds by the petitioners remained uncontroverted, the Company Law Board has directed respondent No. 1 company in that petition to appoint an independent auditor to ascertain the amount siphoned off between the period April 1, 2006 to March 13, 2007. Since the allegations of siphoning off of funds by the petitioners remained uncontroverted, the Company Law Board has directed respondent No. 1 company in that petition to appoint an independent auditor to ascertain the amount siphoned off between the period April 1, 2006 to March 13, 2007. The amount so ascertained shall be deposited back by the petitioners into the account of the respondent-company within two months of such audit. It was also made clear that if the petitioners failed to deposit the ascertained amount within the prescribed period, the respondents shall be at liberty to buy the shares of the petitioners at the value to be ascertained by an independent valuer for the purpose of being appointed by the party's consent. The company and Shri Bhailalbhai Patel challenged the said final judgment of the Company Law Board before this court by way of O.J. Appeal No. 165 of 2008, under section 10F of the Act, except the observations and/or directions contained in paragraph 10B of the Company Law Board judgment. During the pendency of the O.J. Appeal and other cognate matters, the company, pursuant to the directions contained in paragraph 13 of the Company Law Board's final judgment and order dated December 10, 2008, at its meeting held on January 12, 2009, appointed M/s. Mulani Kajrekar and Co., chartered accountants to investigate into the affairs of the company for the period starting from April 1, 2006 and ending on March 13, 2007, to ascertain the alleged siphoning off of funds of the company and other financial irregularities committed by Shri Ushakant Patel and/or Dipen Patel. Even the interim orders passed by this court in the pending O.J. Appeals on December 29, 2008 and February 4, 2009, were challenged by Shri Ushakant Patel and Dipen Patel before the Hon'ble Supreme Court by filing Special Leave Petition Nos. 6168 and 6169 of 2009. The said special leave petitions have been disposed of by the Hon'ble Supreme Court on May 5, 2009. Even with regard to the observations made by the Company Law Board in its final judgment and order dated December 10, 2008, Shri Ushakant Patel and Dipen Patel filed O.J. Appeal No. 5 of 2009 along with Civil Application No. 33 of 2009 for interim relief. The same came to be disposed of on February 16, 2009. 13. Mr. Even with regard to the observations made by the Company Law Board in its final judgment and order dated December 10, 2008, Shri Ushakant Patel and Dipen Patel filed O.J. Appeal No. 5 of 2009 along with Civil Application No. 33 of 2009 for interim relief. The same came to be disposed of on February 16, 2009. 13. Mr. Vakil further submitted that M/s. Mulani Kajrekar and Co., chartered accountants submitted their report dated March 31, 2009, to the company, wherein it has been stated that Shri Ushakant Patel and Dipen Patel have siphoned off a sum of Rs. 87,98,494 (during the period April 1, 2006 to March 13, 2007). It was further stated in the said report that Shri Ushakant Patel and Dipen Patel have made payments to suppliers for the alleged invoices but there has not been actual delivery of goods which were the subject-matter of the said invoices. None of the delivery challans of the petitioner was forming the subject-matter of the said report dated March 31, 2009. It has also come on record that being aggrieved by the final judgment and order dated February 16, 2009, of this court dismissing O.J. Appeal No. 5 of 2009 and Civil Application No. 33 of 2009, Shri Ushakant Patel and Dipen Patel have preferred before the Hon'ble Supreme Court, Special Leave Petitions Nos. 8506 and 8507 of 2009 wherein, interim order was passed restraining the company from taking further steps under the report dated March 31, 2009, of M/s. Mulani Kajrekar and Co. The said special leave petitions are still pending. 14. Mr. Vakil further submitted that the company had appointed one M/s. G.M. Choksi and Co., chartered accountants, to carry out special audit of the affairs of the company for the two financial years 2004-05 and 2005- 06. As per the scope of work of the said M/s. G.M. Choksi and Co., it had to find out and report the financial irregularities, siphoning/misappropriation of funds and fudging of accounts. The said M/s. G.M. Choksi and Co., chartered accountants have also submitted their report dated July 18, 2009, wherein it is stated that the directors of Gujarat Operation (i.e., the said Ushakant Patel and Dipen Patel) have siphoned off the funds of the company to the extent of Rs. 54,65,898 for the financial year 2004-05 and Rs. 63,65,882 for financial year 2005-06. 54,65,898 for the financial year 2004-05 and Rs. 63,65,882 for financial year 2005-06. The said report also included investigation into allegations pertaining to the fake transactions with the present petitioner during the period from April 1, 2004 to March 31, 2006 (24 months) under the head (B) : "Payments for Steel Purchased Materials-financial year 2004-05 Rs. 11,92,640 and Rs. 18,74,523 financial year 2005-06". 15. Mr. Vakil further submitted that all these facts clearly establish the close nexus between the petitioner on the one hand and Shri Ushakant Patel and Dipen Patel on the other hand, during the period when the company's day-to-day management and affairs were under the effective control of Shri Ushakant Patel and Dipen Patel. The present petition filed by S. M. Patel Iron Traders P. Ltd. Is, therefore, clearly an abuse of the process of the court. It is a collusive petition and is filed with an oblique and mala fide intentions. 16. Mr. Vakil further submitted that even on merits, the liability is denied and he contended that bogus invoices were raised on the company for which the company is not liable to make any payment to the petitioner. It is, inter alia, contended that the period from April 1, 2006 to March 13, 2007, has been the subject-matter of scrutiny by M/s. Mulani Kajrekar and Co., which clearly demonstrate that there has not been any "actual and physical delivery of the goods" to the company. As the petitioner's claim in the present petition is purportedly based on the statement of invoices, the production of those invoices on the record of the petition was insisted upon. The said challans do not bear any acknowledgment of the company towards alleged supply of the materials by the petitioner to the company. It is further contended that various payments totalling to Rs. 81,58,250 include payments made during the period when Shri Ushakant Patel and Dipen Patel were in effective control of the day-to-day management and the affairs of the company. Towards invoices against which, in fact, there was no delivery of any material to the company. The aggregate payment of Rs. 81,58,250 includes the amount of Rs. 33,13,761 paid to the petitioner for the invoices raised but for which the material was not supplied to the company. In addition to that, payments aggregating to Rs. Towards invoices against which, in fact, there was no delivery of any material to the company. The aggregate payment of Rs. 81,58,250 includes the amount of Rs. 33,13,761 paid to the petitioner for the invoices raised but for which the material was not supplied to the company. In addition to that, payments aggregating to Rs. 19,99,782 were made to the petitioner through its associate concerns, viz., D. S. Enterprise, Arihant Enterprise and Alpha Enterprise during the financial years 2004-05, 2005-06 and 2006-07 for which the invoices were raised but the material was not supplied to the company. Thus, in aggregate, the payments of Rs. 53,13,543 were made to the petitioner and its associate concerns for which the material was not supplied to the company. It is, therefore, contended that an amount of Rs. 46,84,094 claimed to be remaining outstanding by the petitioner is in fact not payable, but in fact a sum of Rs. 6,29,451 becomes recoverable from the petitioner and its associate concerns by the company. 17. Mr. Vakil further submitted that the respondent-company has denied that even as per company's own books of account, an amount of Rs. 46,84,092 has been confirmed as an outstanding amount to the petitioner. It is contended that the alleged audited balance-sheet of the company states the position as on March 31, 2007. The details and particulars of the various acts of mismanagement and siphoning off of the funds of the company started becoming clear only around May/June, 2007. The same are confirmed only recently as per the report dated March 31, 2009, of M/s. Mulani Kajrekar and Co., and the report dated July 18, 2009, of M/s. G. M. Choksi and Co. The petition is affirmed on May 15, 2009, up to which date the said balance-sheet had not formed part of any public record. The respondent-company had, therefore, called upon the petitioner to disclose on oath the source from whom the petitioner has come into possession of the audited balance-sheet of the company, as on March 31, 2007. 18. Mr. Vakil further submitted that the facts on record clearly demonstrate a "bona fide dispute" in respect of the "debt" claimed by the petitioner in the petition. The evidence on record clearly demonstrates that the company has to recover money from the petitioner. 18. Mr. Vakil further submitted that the facts on record clearly demonstrate a "bona fide dispute" in respect of the "debt" claimed by the petitioner in the petition. The evidence on record clearly demonstrates that the company has to recover money from the petitioner. However, in view of the interim order of the apex court, the company has not taken any further steps in respect of the report dated March 31, 2009, as well as the report dated July 18, 2009. He has, therefore, submitted that the petition is devoid of any merits and hence, deserves to be dismissed. 19. Since many new facts have come on record in the affidavit-in-reply, an affidavit-in-rejoinder is filed on behalf of the petitioner, denying all the allegations and contentions of the respondent-company. Mr. Soparkar has emphatically denied that the petition is collusive in nature and that the same is filed with oblique and mala fide motive. He has also made it clear that the petition is not in any way connected with any of the directors of the respondent-company. He has further submitted that the respondent-company has raised various baseless issues unconnected with the present petition clearly with the dishonest intention to avoid its liability to pay the admitted dues of the petitioner. He has further submitted that the respondent-company chose not to reply the statutory notice and has now placed reliance on the internal disputes amongst the directors of the company and large number of proceedings taken out by both the groups of the directors before the Company Law Board as well as before this court and the apex court. The petitioner is not connected with any of these internal disputes and the aforesaid proceedings between them. He has further submitted that the respondent-company, in its effort to establish the baseless links between the events of their internal disputes made various contradictory statements. The respondent-company has taken a contention contradicting its own audited balance-sheet as at March 31, 2007, which it has filed with the office of the Registrar of Companies and hence, a document of public record. The respondent-company questions the source of the audited balance-sheet as on March 31, 2007, at the time of filing the current petition, i.e., May, 2009. The respondent-company has taken a contention contradicting its own audited balance-sheet as at March 31, 2007, which it has filed with the office of the Registrar of Companies and hence, a document of public record. The respondent-company questions the source of the audited balance-sheet as on March 31, 2007, at the time of filing the current petition, i.e., May, 2009. The respondent-company is statutorily required to file its annual accounts with the office of the Registrar of Companies within a stipulated period and the petitioner has clearly obtained the same from the said office vide search carried out in April, 2009. The petitioner has pointed out that the respondent-company has acknowledged its debt to the present petitioner with the amount equivalent to the claim of the petitioner vide its balance-sheet as it has given a complete list of the creditors of the company as at March 31, 2007, with the outstanding amount as per the books of account of the company. The respondent-company at this stage cannot deny such acknowledged liability. He has further submitted that the reliance placed by the respondent-company on the investigation carried out by another chartered accountant appointed to investigate the internal mismanagement cannot overwrite the documents placed on the public documents. The so-called investigation report for the misdeeds of the directors have no relevance so far as the present petition is concerned. The conclusion with regard to non-supply of material by the petitioner is arbitrary and not supported by any documentary proof. In fact, the list of invoices under investigation, produced by the respondent-company along with the affidavit-in-reply refers to invoices which are altogether different from the ones in question under the petition and hence, has no relevance. 20. With regard to the allegation of non-supply of material, Mr. Soparkar submitted that it is baseless. One of the delivery challans was already produced on record of this petition which bears the seal of the respondent-company confirming the receipt of the material. The petitioner has produced on record all other challans duly acknowledged by the respondent-company for its invoices along with the affidavit-in-rejoinder. He further submitted that various disputes were raised by the respondent-company for the first time which proves the fallacy of the same as the books of account of the respondent-company have already recorded the said transactions and are duly audited. He further submitted that various disputes were raised by the respondent-company for the first time which proves the fallacy of the same as the books of account of the respondent-company have already recorded the said transactions and are duly audited. The respondent-company has referred to the name of three other suppliers with whom the petitioner has no connection. With regard to the balance-sheet as at June 30, 2007, produced along with the reply, Mr. Soparkar submitted that the respondent-company might have changed its financial year and chosen to prepare a fresh balance-sheet as at June 30, 2007, for a consolidated period of 15 months although it had already prepared and filed its audited balance-sheet as on March 31, 2007, with the office of the Registrar of Companies. Both these balance-sheets are duly audited and signed by the same chartered accountant. However, the respondent-company had conveniently avoided to give the detailed list of creditors in this balance-sheet as at June 30, 2007. It would indicate the name of the present petitioner in its books of account. Since the name of the petitioning creditor as well as the outstanding amount are already indicated in the balance-sheet as at March 31, 2007 and no payment has been made to the petitioner after March 31, 2007, it is only logical that the said amount has to be reflected in the books of account of the respondent-company. This substantiates the contention of the petitioner-company that the respondent-company has adopted dishonest attitude and all false and frivolous grounds were raised to dispute its liability to pay the acknowledged outstanding dues of the petitioner. 21. Lastly, Mr. Soparkar submitted that the respondent-company must be presumed to be unable to pay its outstanding debt as it has not made the payment to the petitioner for its legitimate dues even after statutory notice having been served and an opportunity granted to prove its bona fides. He has, therefore, submitted that it is just and proper and in the interest of justice that the petition be allowed and the respondent-company be wound up. 22. On the basis of the affidavit-in-sur-rejoinder filed on behalf of the respondent-company, while dealing with various contentions raised by the petitioner, Mr. He has, therefore, submitted that it is just and proper and in the interest of justice that the petition be allowed and the respondent-company be wound up. 22. On the basis of the affidavit-in-sur-rejoinder filed on behalf of the respondent-company, while dealing with various contentions raised by the petitioner, Mr. Vakil submitted that the petitioner-company has made a false statement on oath in so far as obtaining (in April, 2009) a copy of the audited balance-sheet of the company as on March 31, 2007 and thereafter referring to and relying upon the same while filing the present petition in May, 2009. He has submitted that the company's financial year as per section 2(17) read with section 210(4) of the Companies Act, 1956, was ending on March 31, 2006. Thereafter, the financial year was extended to 15 months in terms of section 210(4) of the Companies Act, 1956, so as to end on June 30, 2007. The same was done at the meeting of the board of directors of the company held on December 19, 2007. The company's balance- sheet and profit and loss account for the financial year ended June 30, 2007, was approved at the board of directors' meeting dated December 19, 2007 and thereafter at the company's annual general meeting on December 31, 2007. The said balance-sheet and profit and loss account, for the year ended June 30, 2007, was filed with the office of the Registrar of Companies on December 11, 2008. It is thereafter that the said balance-sheet and/ or the profit and loss account for the financial year ended June 30, 2007, became a public document. The purported audited balance-sheet as on March 31, 2007, annexed by the petitioner-company along with the petition has never formed part of the record of the Registrar of Companies. He has further clarified that the balance-sheet and profit and loss account prepared by the company for the period ended on March 31, 2007, was to be filed and was filed only with the Income-tax Department and not with the office of the Registrar of Companies. It was, therefore, not a part of the public record, much less available for inspection to the petitioner-company or to the public at large. The petitioner-company could never have obtained the annexed audited balance-sheet as a result of any alleged search that it might have taken in April, 2009. It was, therefore, not a part of the public record, much less available for inspection to the petitioner-company or to the public at large. The petitioner-company could never have obtained the annexed audited balance-sheet as a result of any alleged search that it might have taken in April, 2009. The petitioner has, therefore, made a false statement on oath in the matter of obtaining the annexed audited balance-sheet. 23. Mr. Vakil further submitted that there is a deliberate attempt on part of the petitioner-company to mislead this court by falsely corelating the statements, averments and submissions made in the reply with respect to lorry receipts, delivery challans, invoices, etc., for the period from April 1, 2006 to December 31, 2006, on the one hand and the invoices, delivery challans, etc., for the period from January, 2007 to March 13, 2007, on the other hand. 24. Mr. Vakil has also referred to the affidavit-in-sur-rejoinder wherein details of the profitability of the company since the financial year 2003-04 and up to March 31, 2010, are given. The same clearly indicates that during the period from 1984 to 2006 (i.e., 23 years), when Shri Ushakant Patel and Dipen Patel were in charge, the company made an aggregate profit of Rs. 37.05 lakhs at an average of Rs. 1.61 lakhs per year. On the other hand, since the directors, B.B. Patel and Pradeep Shringarpure from December 2006, the company has made profits of Rs. 282.84 lakhs at an average of Rs. 70.71 lakhs per year. The company has turned the corner and is making rapid progress in its business. The operations are now wide spread in different states, viz., Maharashtra, Uttar Pradesh, Chattisgarh, Delhi apart from Gujarat. The work on hand at present is approximately of the value of Rs. 35 crores. He has, therefore, submitted that even on this ground, the respondent-company is not required to be wound up. 25. Having heard learned advocates appearing for the parties and having considered their rival submissions in the light of the statutory provisions as well as decided case law on the subject and having considered the evidence on record, the court is of the view that the power of this court to wind up a company is discretionary. 25. Having heard learned advocates appearing for the parties and having considered their rival submissions in the light of the statutory provisions as well as decided case law on the subject and having considered the evidence on record, the court is of the view that the power of this court to wind up a company is discretionary. The question of exercise of the said discretion would arise only after the court comes to a prima facie conclusion that the defence raised by the company in respect of the debt which is subject-matter of a petition is not bona fide and/not acceptable. In that case, the court would have to consider various other factors so as to decide whether the discretion should be utilised for the purpose of winding up the company or dismissing the petition. However, in the event, the court on the assessment of the defence of the company comes to the conclusion that the said defence is prima facie acceptable, believable and is bona fide, then in such circumstances, the court would have no discretion but to dismiss the winding up petition. In the context of the general principles and proposition of law applicable to a petition seeking winding up of the company under section 433(e) of the Companies Act, 1956, reliance is placed on the following judgments : (i) In the case of Registrar of Companies v. Navjivan Trading Finance P. Ltd. (1978) 48 Comp Cas 402, 416, this court held that winding up is the last thing that the court would do and not the first thing that the court would do having regard to its impact and consequences, for winding up of a company would result in, (1) closing down of a unit which produces some goods or provides some services ; (2) it would throw out of employment numerous persons and result in grave hardship to the members of the families of such employees ; (3) loss of revenue to the State by way of collection that the State could hope to make on account of customs or excise duties, sales tax, Income-tax, etc. ; (4) scarcity of goods and in diminishing of employment opportunities. The court would not, therefore, be too keen or too anxious to wind up a company by an order of court only on the ground that the company is unable to pay its debts. ; (4) scarcity of goods and in diminishing of employment opportunities. The court would not, therefore, be too keen or too anxious to wind up a company by an order of court only on the ground that the company is unable to pay its debts. In fact, it would be a blow to do so, so long as there is any possibility of resurrecting the company. It would not be right to say that creditors can insist on winding up of the company by court as a matter of right if the position of the company is such that it would be unable to pay its debts to them even if the company can be resurrected. When the persons to whom the company becomes indebted enter into dealings with the company, they do so because they hope to make profits out of the transactions with the company in the usual course of business. It is an incidental risk and an occupational hazard for the persons who enter into such dealings which they undertake in order to earn profits. In fact, it is possible that in the course of their dealings for several years, they would have made huge profits out of the transactions entered into with the company. It would not, therefore, be right to wind up the company merely because the company is unable to pay its debts so long as it can be resurrected by a scheme or arrangement. (ii) In the case of Rishi Enterprises, In re (1992) 73 Comp Cas 271, 275 (Guj), the court while reiterating the above propositions, held that the petitioning creditors have no absolute right to insist on winding up of the company even if the company is unable to pay its debts. (iii) In the case of American Express Bank Ltd. v. Core Health Care Ltd. (1999) 96 Comp Cas 841, this court has held that it is well-settled by catena of decisions that the word "may" in sections 433 and 434 is indicative of the fact that even if one or more ground mentioned in section 433 is made out by the company unable to pay its debt still it is not mandatory but rests in the discretion of court whether to make an order of winding up or not. The court must exercise its discretion under circumstances of case and in the interest of justice. The court must exercise its discretion under circumstances of case and in the interest of justice. Mechanism of winding up process not to be used as pressure tactic for enforcing realisation. (iv) In the case of Tata Iron and Steel Co. v. Micro Forge (India) Ltd. (2001) 104 Comp Cas 533 (Guj), the court has enumerated certain important chronicles and contours which are to be kept in the mental radar, before reaching the conclusion in a winding up petition. If there is serious and genuine cross claim or bona fide dispute of debt and substantial dispute of counter claim existed, it is held that the order of winding up is not warranted nor it is justified. (v) In the case of B. Viswanathan v. Seshasayee Paper and Boards Ltd. (1992) 73 Comp Cas 136, the Madras High Court held that the winding up petition cannot be allowed in case of bona fide disputed debt. The genuineness of dispute depends upon the reality and substantial defence. It should not be covered merely into dispute to hide its real inability. The court in that case held that there was a bona fide dispute with regard to the debt and hence, the winding up petition cannot be allowed. (vi) In the case of Jagdamba Polymeres Ltd. v. Neo-Sack Ltd. (2006) 129 Comp Cas 160, the Madhya Pradesh High Court (Indore Bench) held that the court would not entertain the petition for winding up of running company only on the ground of inability of the company to pay debt of the petitioner. The petitioner has remedy available for recovery of due amount by filing civil suit. The company can raise a bona fide dispute before the civil court as to why it has declined to pay dues of the petitioner. The court, therefore, dismissed the winding up petition. 26. While deciding the petition seeking winding up of the company under section 433(e) of the Act, the principles applicable to the granting of leave to defend a summary suit filed under Order 37 of the Code of Civil Procedure, 1908, are required to be considered. It is very helpful to draw upon the analogy of a summary suit under Order 37 of the Code of Civil Procedure, 1908. It is very helpful to draw upon the analogy of a summary suit under Order 37 of the Code of Civil Procedure, 1908. If the company court reaches the conclusion that, had it been exercising ordinary original civil jurisdiction, it would have granted unconditional leave to defend, it must dismiss the winding up petition. Reliance is placed on the decision of the Delhi High Court in the case of Sanjay Khanna v. Discovery Communications India (2003) 114 Comp Cas 229. The basic defence raised by the company is that the company has procured material from the petitioning creditor under the 11 invoices during the period from January 16, 2007 to March 13, 2007. However, such procurement of material by itself and ipso facto does not entitle the petitioning creditor to a winding up order nor would the court simply on the basis of the procurement of material by the company under the 11 invoices proceeds to wind up the company. The said material was procured by the company through Shri Bhailalbhai Patel who had just entered/taken control of the company's affairs and its day-to-day management from December, 2006/January, 2007 and the said Shri Bhailalbhai Patel was ignorant about the collusion and connivance between Shri Ushakant Patel and Dipen Patel on the one hand, and the petitioning creditor on the other hand. Though the company has procured the said material from the petitioning creditor, the company, in fact, has raised a very substantial defence to recover huge sum of money, jointly and severally, from the petitioning creditor along with Shri Ushakant Patel and Dipen Patel, who were alleged to have jointly in collusion and connivance with each other siphoned off the funds of the company and drained the company of its finances. As such, according to the petitioning creditor, along with the outstanding opening balance, the total dues at the end of the year March 31, 2007, amounted to Rs. 1,28,42,344. Further, according to the petitioning creditor, considering the various payments made by the company from time to time during the financial year ending March 31, 2007, totalling to Rs. 81,58,250, an amount of Rs. 46,84,094 remained outstanding. This aggregate payment of Rs. 81,58,250 includes the amount of Rs. 33,13,761 paid to the petitioning creditor for the invoices raised but for which the material was not stated to have been supplied to the company. In addition, payments aggregating to Rs. 81,58,250, an amount of Rs. 46,84,094 remained outstanding. This aggregate payment of Rs. 81,58,250 includes the amount of Rs. 33,13,761 paid to the petitioning creditor for the invoices raised but for which the material was not stated to have been supplied to the company. In addition, payments aggregating to Rs. 19,99,782 were alleged to have been made to the petitioning creditor through its associate concerns, namely, D. S. Enterprise, Arihant Enterprise and Alpha Enterprise during the financial years 2004-05, 2005- 06 and 2006-07, for which invoices were raised but the material was not stated to have been supplied to the company. Thus, in aggregate, payment of Rs. 53,13,543 was made to the petitioning creditor and its associate concerns for which the material was not stated to have been supplied to the company. Therefore, an amount of Rs. 46,84,094 claimed to be remaining outstanding, stated to have been not payable, but a sum of Rs. 6,29,451 is stated to have been recoverable from the petitioning creditor and its associate concerns. The company, therefore in fact has a counter claim against the petitioning creditor. The company, however, could not file the counter claim or a suit for recovery of the said amount because of the stay granted by the apex court against recovery of the moneys alleged to have been siphoned off by Shri Ushakant Patel and Dipen Patel alone or in collusion and connivance with third parties, including the petitioning creditor. If any such actions were taken by the company, the same would be considered to be in breach of the order dated April 20, 2009, passed by the Supreme Court. 27. An allegation is also required to be seen as to whether the company through Shri Bhailalbhai Patel has got any prima facie evidence of the involvement of the petitioning creditor in the matter of siphoning off the fund of the company during the period of May, 2007. The same was alleged in the affidavit-in-reply filed by the company in the petition before the Company Law Board. The Company Law Board's final judgment and order was passed on December 10, 2008. The chartered accountant, M/s. Mulani Kajrekar and Co.'s, report for the period from April 1, 2006 to March 13, 2007, came on March 31, 2009. The report of G.M. Choksi and Co., for the period of two years prior thereto came around July 18, 2009. The Company Law Board's final judgment and order was passed on December 10, 2008. The chartered accountant, M/s. Mulani Kajrekar and Co.'s, report for the period from April 1, 2006 to March 13, 2007, came on March 31, 2009. The report of G.M. Choksi and Co., for the period of two years prior thereto came around July 18, 2009. The apex court has, by its order dated April 20, 2009, restrained the company from taking any further steps pursuant to the report dated March 31, 2009, prepared under paragraph 13 of the Company Law Board's final judgment and order dated December 10, 2008. The company, therefore, could not be said to be an accused of any inaction in the matter of not taking any steps towards recovery of the monies alleged to have been siphoned off by the petitioning creditor along with Shri Ushakant Patel and Shri Dipen Patel. 28. From these facts, it can prima facie be believed that the company has a bona fide counter claim and the same constitutes a proper and a valid defence to the claim of the petitioning creditor. By setting up the counter claim, the company has raised a bona fide dispute regarding its liability to pay the debts claimed by the petitioning creditor. The company has reasonable excuse for non-payment and cannot be deemed to be unable to pay its debts on account of any legal presumption arising under section 434(i) of the Act. In support of this submission, reliance is placed on the following judgments : (a) Federal Chemical Works Ltd., In re (1964) 34 Comp Cas 963 (All), wherein it is held that the existence of valid counter claims would clearly constitute reasonable excuse for non-payment. (b) Bangasri Ice and Cold Storage Ltd. v. Kali Charan Banerjee, AIR 1962 Cal 613 , wherein it is held that under certain circumstances, counter claim against the petitioning creditor may also amount to a bona fide claim. The court is entitled to investigate the question as to whether a dispute has been manufactured in order to delay and defeat the realisation of the dues of the petitioning creditor and is merely a cloak for the inability of the company to pay its just debts. The court is entitled to investigate the question as to whether a dispute has been manufactured in order to delay and defeat the realisation of the dues of the petitioning creditor and is merely a cloak for the inability of the company to pay its just debts. (c) J.N. Roy Chowdhury (Traders) P. Ltd. v. Jainti Enterprises (1987) 61 Comp Cas 504 (Cal), where there are claims and cross-claims between the creditor seeking the winding up and the company sought to be wound up, the debt can be said to be bona fide disputed and the court will not order the winding up of the company. Winding up proceedings are not intended to be exploited as a normal alternative to the ordinary mode of debt realisation. (d) Punjab Ceramics Ltd. v. Punjab State Industrial Development Corporation Ltd. (1991) 70 Comp Cas 415 (P&H), wherein the claim was contested by the company-counter claiming reimbursement. The issues in the case were triable issues which the company court in its summary jurisdiction was not competent to try. All that the company court could see is whether the company sought to be wound up has set up a bona fide case of substance which is likely to succeed in point of law by adducing prima facie proof of the facts on which its defence depends. The company had clearly set up a bona fide case by producing prima facie evidence of its defence. The petition for winding up had been filed to pressurise the company to repay. 29. Even with regard to the issue regarding confirmed debt raised by the petitioning creditor, the company is able to raise a dispute to the effect that the company has acknowledged the debt in the audited balance-sheet of the company as on March 31, 2007 and a copy of such audited balance- sheet was procured by the petitioning creditor while taking search of the Registrar of Companies's record in April, 2009. The company's defence is that the petitioning creditor has made a false statement on oath in the matter of procuring the copy of the audited balance-sheet from the records of the Registrar of Companies in April, 2009. As till April 2009, the company had not filed the said audited balance-sheet with the office of the Registrar of Companies. The company's defence is that the petitioning creditor has made a false statement on oath in the matter of procuring the copy of the audited balance-sheet from the records of the Registrar of Companies in April, 2009. As till April 2009, the company had not filed the said audited balance-sheet with the office of the Registrar of Companies. The audited balance-sheet as on March 31, 2007, annexed by the petitioning creditor is the one which was filed by the company with the Income-tax Department and not with the office of the Registrar of Companies. The same was, therefore, not a part of the public record much less available for inspection to the petitioning creditor or to the public at large. There is, therefore, some substance in the contention that the annexed audited balance-sheet filed along with the petition in May, 2009 might have been made available to the petitioning creditor by Shri Ushakant Patel and Dipen Patel. The said fact, therefore, led to prima facie belief that the collusion and connivance continues. Reliance is placed on the decision of the Calcutta High Court in the case of Mohan Lal Ghosh v. East India Wires Ltd. (2004) 118 Comp Cas 322. 30. A plea is also taken that apart from the findings in the reports of M/s. Mulani Kajrekar and Co., and M/s. G.M. Choksi and Co., establishing siphoning off of the funds of the company, the petitioning creditor has not dealt with the case of the company that each time false and bogus payments were made from the account of the company to the petitioning creditor and the very next day or soon thereafter, Shri Ushakant Patel/ Dipen Patel made cash deposits with the company. The same also leads to prima facie belief of the collusion and connivance between Shri Ushakant Patel, Dipen Patel and the petitioning creditor. This would also constitute a valid and a serious factor to be considered for the purpose of exercise of the discretionary powers of this court. 31. It is true that Mr. Soparkar has strenuously urged before the court that the decisions cited are not straightaway made applicable to the facts of the present case as they are rendered depending upon the facts found by the court in those cases. He has also very strenuously argued before the court that the defence raised by the respondent-company is not genuine and bona fide. Soparkar has strenuously urged before the court that the decisions cited are not straightaway made applicable to the facts of the present case as they are rendered depending upon the facts found by the court in those cases. He has also very strenuously argued before the court that the defence raised by the respondent-company is not genuine and bona fide. The petitioner is not at all concerned with the internal disputes of the directors of the company. There is no evidence whatsoever on record that the petitioner was anywhere involved in the alleged misappropriation of funds of the company by one group of directors. The court, therefore, should not accept the defence raised by the respondent-company as the gospel truth and on that ground, the petition cannot be dismissed. 32. From all the aforesaid facts, the petition, at the instance of the petitioning creditor appears to have been instituted mala fide at the behest of Shri Ushakant Patel and Dipen Patel with a view to circumvent the orders of the apex court, this court as well as the Company Law Board. It might also be instituted mala fide with a view to frustrate the various proceedings pending either before the apex court, this court and the Company Law Board. The object of the petition might be to upset and disturb the working and the growth of the company, at the instance of the directors who are alleged to have siphoned off huge monies of the company under the umbrella of the orders that may be passed in the present petition. 33. Apart from this, the company is undoubtedly making profits and in fact, the profits have increased manifold since January, 2007 when the day-to-day management and control came in the hands of Shri Bhailalbhai Patel. The company also said to have work orders on hand of more than 3.5 crores. There appears to be no risk of the company being mismanaged as the order dated May 5, 2009, of the apex court has put certain restrictions. The expenses are being vetted by a chartered accountant appointed under the order dated May 5, 2009, of the apex court. There appears to be no risk of the company being mismanaged as the order dated May 5, 2009, of the apex court has put certain restrictions. The expenses are being vetted by a chartered accountant appointed under the order dated May 5, 2009, of the apex court. The petition, therefore, filed by the present petitioning creditor, who is alleged to be prima facie involved in siphoning off of the funds of the company, in collusion and connivance with the former management and also alleged to have drained the company of its finances, is, therefore, liable to be dismissed. Accordingly, the petition is dismissed. Notice discharged without any order as to costs. 34. The dismissal of this petition does not mean that the court has accepted the defence raised by the respondent-company. The observations made in this judgment are of prima facie in nature. The same shall not be treated as conclusive evidence. It is, however, good only to the extent of not exercising the court's discretion for winding up of the respondent-company and the same shall not be considered as conclusive one for any other purposes or any other proceedings.