JUDGMENT 1. - Petitioner Company has filed this petition with prayer that respondent-company, having its registered office at 121, K-5 Scheme, Khatipura Road, Jaipur, be ordered to be wound-up under and in accordance with the provisions of the Companies Act, 1956 and the Official Liquidator attached to this court be appointed as Provisional Liquidator in respect of all assets, properties and affairs of the respondent-company. 2. Present winding up petition has been filed under section 433 read with section 439 of the Companies Act, 196 on 03.01.2013, praying for the winding up of the respondent-company - M/s Ranwa Real Estate Private Limited (hereinafter referred to as ‘the company’) stating that both petitioner and respondent-company being private companies, limited by shares, are engaged in the business of real estate. In Para 8.1 of the petition, it has been stated that being a real estate dealer, land developer and colonizer, the petitioner, for the purpose of its business, gave Rs. 9,10,00,000/- (Rs. Nine Crores Ten Lacs Only) vide 7 cheques of different dates in the months of April and May, 2006 to the respondent-company as advance towards purchase of certain land. But the respondent-company did not hand over the land as per Memorandum of Understanding (for short, 'the MOU') of April, 2006 (Annexure-14) followed by MOU dated 03.05.2006. Later, on inquiry, it came to notice of the petitioner that the lands agreed to be sold to the petitioner under the aforesaid MOUs were never owned and possessed by the respondent-company. Consequently, the respondent-company gave to petitioner 4 cheques No. 67284, 567285, 567289 and 567281 all dated July, 2006 totalling to Rs. 12,10,00,000/- to return the debt with penalty of Rs. 3 Crores. However, all such Cheques were dishonoured, which led to filing of 3 Criminal Complaints No. 287/07 279/07 under section 138 of the Negotiable Instruments Act, 1881 (in short, ‘N.I. ‘Act or ‘Act of 1881) before the Court at Jaipur. Thereafter, another MOU dated 17.10.2007 was reduced into writing between the respondent-company and petitioner, wherein the petitioner undertook to withdraw all the aforesaid 3 Criminal Complaints and respondent-complain agreed to hand over the possession of the land ad-measuring 7000 sq. yards and 29000 sq. yards, claimed to be owned and possessed by respondent-company, situated at village Sevapura and also agreed to give cash amounting to Rs. 1.17 Crore to petitioner. yards and 29000 sq. yards, claimed to be owned and possessed by respondent-company, situated at village Sevapura and also agreed to give cash amounting to Rs. 1.17 Crore to petitioner. Pursuant to such MOU dated 17.10.2007, the respondent-company handed over 10 post dated cheques (mentioned in MOU dated 17.10.2007) totalling to Rs. 1.20 Crore. Having relied on undertaking and assurance given by respondent-company in the light of such MOU, the petitioner vide applications prayed learned trial court to dispose off all such 3 criminal complaints of 2007, which were accordingly disposed off by the trial court vide its orders dated 08.05.2008. Nevertheless, the respondent-company did not act upon the terms of the MOU dated 17.10.2007. Cash of Rs. 1.17 Crore has never been paid to the petitioner. Out of 10 post dated cheques mentioned in MOU dated 17.10.2007, two cheque bearing No. 807105 dated 11.08.2007 and 807106 dated 18.08.2006 were dis-honoured. Accordingly, the MOU dated 17.10.2007 was never complied with by the respondent-company. 3. Further case of the petitioner-company is that on repeated persuasions of the petitioner, verbal and legal notices and the court proceedings as aforesaid, the respondent-company allotted and handed over the possession of only 3 plots ad-measuring to 10987.34 S. Yards, worth only Rs. 81,00,000/- (Eighty One Lacs only), to the petitioner in village Sevapura. Finally, the respondent-company agreed to return the balance debt to the petitioner. On repeated demands of the petitioner, the respondent-company paid/returned Rs. 2,57,00,000/- (including Rs. 80,00,000/- paid vide 8 cheques mentioned in MOU dated 17.10.2007) to the petitioner till 31.03.2011 through various cheques, DD’s and RTGS transfer. Further, the respondent-company paid/transferred further Rs. 50,00,000/-(Rs. Fifty Lacs only) during the financial year 2011-12 vide RTGS and cheque Nos. 091159 dated 07.08.2011 and 091160 on 09.02.2012 as detailed in Para 8.2 of the petition. Thus, finally, an ascertained and definite debt of Rs. 5,04,00,000/- (Five Crores Four Lacs only) is due to the petitioner as on 31st March, 2012 towards principal sum. For remaining land measuring 18012.66 square yard out of 29000 square yard land and 7000 square yard land was not handed over. 4. Shri Naresh Gupta, learned counsel for petitioner-company, argued that the respondent-company in its books of account has been maintaining a running account of the petitioner and has duly incorporated all the transactions. The petitioner was creditor of the respondent-company as on 31st March, 2011 for Rs. 4. Shri Naresh Gupta, learned counsel for petitioner-company, argued that the respondent-company in its books of account has been maintaining a running account of the petitioner and has duly incorporated all the transactions. The petitioner was creditor of the respondent-company as on 31st March, 2011 for Rs. 5,54,00,000/- and after further payment of Rs. 50,00,000/-during the financial year 2011-121, as on 31st March, for Rs. 5,04,00,000/-. Such debt of RS. 5,04,00,000/- has been admitted and acknowledged by the respondent-company in its books of account and in its audited balance sheets and Director's reports annexed with its annual returns filed with the Registrar of Companies for the year ended on 31st March, 2012 and 31st March, 2013. The debt in favor of petitioner is further apparent from the running account statement of the respondent-company detailing all transactions as Annexure 6(Page 84 to 91). 5. Learned counsel argued that four cheques bearing No. 091156 dated 23/07/2011, 091157 dated 28.07.2011, 091158 dated 02.08.2011 and 091161 dated 19.08.2011 of Rs. 20,00,000/-(Twenty Lakhs) each totalling to Rs. 80,00,000/- (Eighty Lacs only), all drawn on Oriental Bank of Commerce branch, Umrao Complex, Opposite Government Hostel, M.I. Road, Jaipur-302001 issued by the respondent-company in favor of petitioner had been dishonored with the remark “funds insufficient”. Even on serving of legal notice under section 138 of the Negotiable Instruments Act, 1881, the respondent-company deliberately failed to pay the sums depicted in the aforesaid cheques so dishonoured. Accordingly, four Criminal Complaints under Section 138 of the Negotiable Instruments Act, have again been instituted in the year 2012 before the competent court of justice against the respondent-company and its directors wherein cognizance have been taken by the trial court and the same are pending as on date. 6. It is argued that after 31st March, 2012, no payment has been made to the petitioner in spite of repeated demands. Even the respondent-company remained totally unresponsive after serving the legal notice through registered post - Acknowledgment Due, under Sections 433 and 434 of the Companies Act of 1956 (in short, ‘Act of 1956’), calling upon it to make payment of Rs. 5,04,00,000/-along with interest @12% per annum within a period of 21 days from the date of receipt of such notice. Even the liability to pay such debt has not been denied by giving reply to such notice. 5,04,00,000/-along with interest @12% per annum within a period of 21 days from the date of receipt of such notice. Even the liability to pay such debt has not been denied by giving reply to such notice. The respondent-company has been unable to make payment of the undisputed/ascertained/definite outstanding debt/amount of Rs. 5,04,00,000/- and is deliberately avoiding/neglecting the payment of the same; begging debt and hinting at conspiracy and frauds. No business appears to have been done over a year which is apparent from the director’s report filed for the year ended on 31-03-2011 in which there was a note “During the current Financial year company has not taken up any project of constructon”. The inventories/stock in hand of the company was Rs. 1,81,329/- as on 31.03.2011, which has been shown consistently at the same figure since financial year 2007-08. The company is totally unable to pay its debts and is liable to be wind-up. 7. It is further argued that further Annexure-R/2 was not the settlement as alleged by respondent-company but was an application filed jointly by both of the parties for the disposal of the earlier three criminal complaints of 2007 subject to the compliance of MOU dated 17.10.2007, the language of which itself makes it clear that post dated cheques, were given by respondent-company to petitioner of which payments were to be realized. Petitioner therefore then decided not to proceed against the respondent-company and its directors in the aforesaid 3 criminal complaints of 2007. There was no admission, muchless judicial admission of petitioner, within the meaning of section 58 of the Evidence Act, as alleged by respondent-company; inasmuch as, contention contained in Annexure-R/2 was apparently subjected to the encashment of such post-dated cheques and to the compliance of the MOU dated 17-10-2007. Indisputably, out of such 10 post dated cheques worth Rs. 1.20 Crore, mentioned in MOU dated 17.10.2007, two cheque bearing No. 807105 dated 11.08.2008 and 807106 dated 18.08.2008 worth Rs. 40 Lacs were dis-honoured. 8. Shri Naresh Gupta, learned counsel for the petitioner, submitted that cash of Rs. 1.17 Crore, as mentioned in MOU dated 17.10.2007 has never been paid to the petitioner. No evidence regarding payment of cash has been produced on record. Further, it is proved by the admission of respondent-company in the from its book entries wherein no entry with regard to cash payment has been made by it. 1.17 Crore, as mentioned in MOU dated 17.10.2007 has never been paid to the petitioner. No evidence regarding payment of cash has been produced on record. Further, it is proved by the admission of respondent-company in the from its book entries wherein no entry with regard to cash payment has been made by it. Otherwise, also, the contention of respondent-company regarding repayment by it in cash of Rs. 1.17 Crore is proved incorrect in view of the provisions contained in Section 269T of the Income Tax Act, 1961 under which the repayment of loan exceeding Rs. Twenty thousand is barred in cash. For the violation of the provisions contained in section 269T of the Income-tax Act, serious repercussion by way of heavy penalty has been provided in the provisions contained in sections 271E of the Income-tax Act. Had the respondent-company paid the alleged Rs. 1.17 Crore, the respondent-company would have certainly entered such transaction in its books of accounts. 9. Learned counsel for petitioner further submits that judgments relied on by the respondent-company in M/s. Madhusudan Gordhan das and Co. v. Madhu Wollen Industries Pvt. Ltd. (1970) 3 SCC 632 and also of Mediquuip Systems (P) Ltd. v. Proxima Medical Systems GMBH reported in (2005) 7 SCC 42 , do not help the respondent-company. Rather the ratio of M/s. Madhusudan Gordhandas and Co. v. Madhu Wollen Industries Pvt. Ltd. (Supra) is in favour of petitioner as observed in case of M/s. Vijay Industries v. Natal Technologies Ltd. (Supra). 10. It is argued that contention of respondent-company praying to drop the winding up proceedings on the ground that as now in the month of January, 2015 a civil suit for the recovery of the debt has been filed by the petitioner against respondent-company and its directors or guarantor, is not tenable in law. Admittedly, the civil suit has been filed to avoid it getting barred by limitation in the month of January, 2015 after filing of the present winding up petition on 03.01.2013. Further, the scope both of the civil suit and winding up proceedings are different. Winding up petition has been filed as the company has been unable to a pay its debts. It is settled law, that the liability of the guarantor is co-extensive with the principal borrower and the only remedy to recover the dues from the guarantor/confirming party is the civil suit. Winding up petition has been filed as the company has been unable to a pay its debts. It is settled law, that the liability of the guarantor is co-extensive with the principal borrower and the only remedy to recover the dues from the guarantor/confirming party is the civil suit. The Civil Suit would not be maintainable unless the company or its directors are im-pleaded as party. in there no provision under the law including Companies Act, barring institution of civil suit after filing of winding up petition. Rather, even after the order of winding up the other remedies of civil nature can be proceeded with against the company with the leave of the Company Court. Argument of respondent-company in this regard is base less and is liable to be rejected. In support of this argument, learned counsel for petitioner has relied on judgments in Karam Chand Thapar and ors. (Cal) Sales Limited v. Acme Paper Limited - AIR 1994 Delhi 1 and M/s. Vijay Industries v. M/s. NATL Technologies Ltd. - AIR 2009 SC 1695 . 11. Further, an FIR No. 409 dated 10.10.2014 has also been lodged against respondent-company, its Directors and Guarantor for the offence committed by them under Sections 403, 406, 417, 420, 421, 422, 423, 424, 120B, 109 read with Section 34 of the Indian Penal Code with the Police Station Ashok Nagar, Jaipur, for their act of defrauding the petitioner with dishonest and fraudulent intention by taking substantial advance of Rs. 9 crores 10 lacs misrepresenting the sale of lands shown in MOUs dated April, 2006 and 03.05.2006 which land were never owned and possessed by the respondent-company. It is a separate proceeding that has no impact in any manner on the present winding up petition. If the Directors and promoters of the respondent-company have not committed any offence, they must not afraid of, and may clarify to the authorities dealing criminal administration about their conduct. 12. Narration in para 11 of the petition and annual reports of respondent-company, its audited balance sheets and directors reports placed on record for the year ended on 31.03.2011, 31.03.2012 and 31.03.2013, make it abundantly clear that the financial position of respondent-company is bad. Respondent-company is unable to pay its debts; the assets are not sufficient to satisfy its liabilities; no business appears to have been done over a year. Respondent-company is unable to pay its debts; the assets are not sufficient to satisfy its liabilities; no business appears to have been done over a year. Respondent-company has siphoned the substantial funds to its directors, dearest and nearest persons and has advanced unsecured loans to several of them, which is apparent from balance-sheets for the Financial Years 2010-11, 2011-12 and 2012-13. In Schedule No.N attached to Balance-Sheet as on 31.03.2011, the administrative expenses have been shown to be only Rs. 87,814/- for the financial year 2010-11 which proves that no business has been carrying on and only fixed overheads have been incurred. For the financial years 2010-11, 2011-12 and 2012-13, the cash in hand Rs. 5,05,225/-, Rs. 34,038/- and 7,06,638/- and balances at Bank Rs. 672/-, Rs. 14,149/- and Rs. 15,384/- have been shown respectively, which are too low to run the business of real estate. 13. It is thus apparent that financial affairs of the company have been managed purposefully with an oblique motive or deceitfully in a manner that maximum fund of the company remained invested in intangible assets like advances for purchase of land or loans to directors etc., from where in there no hope of recovery of either of the fund or any allotment cum possession of the land. The company is totally unable to pay its debts and is liable to be wound up. 14. Shri Sandeep Taneja, learned counsel for respondent-company, argued that petitioner has suppressed material fact of entering into MOU dated 17.10.2007 with respondent-company. The MOU clearly records that in lieu of amount given by petitioner to respondent-company, the respondent-company handed over pieces of land ad-measuring 7000 square yards, worth Rs. 2.03 crores, and 29000 square ydards, worth Rs. 4.72 crores. In addition to this, a sum of Rs. 1.17 crores was given in cash and 10 postdated cheques drawn on Oriental Bank of Commerce, M.I. Road, Jaipur, for a total sum of Rs. 1.20 crores were given to the petitioner. It was agreed that the petitioner would withdraw the proceedings initiated under Section 138 of the Negotiable Instruments Act. However, the petitioner chose to deliberately suppress this factum of entering into the MOU with respondent-company from this court. 15. It is argued that petitioner also suppressed the fact that it had filed criminal complaints against respondent-company with regard to three cheques for a total sum of Rs. 12.10 crores. However, the petitioner chose to deliberately suppress this factum of entering into the MOU with respondent-company from this court. 15. It is argued that petitioner also suppressed the fact that it had filed criminal complaints against respondent-company with regard to three cheques for a total sum of Rs. 12.10 crores. The petitioner further concealed the fact of filing of settlement in criminal complaints on 08.05.2008 while acknowledging receipt of payment of dues and that nothing remains due between the parties. The petitioner had submitted settlement in criminal cases no. 278/2009, 279/2007 and 280/2007, pending before the Additional Chief Judicial Magistrate No.10 stating therein that settlement had arrived at between the parties. It was specifically stated that the accused had given postdated cheques to the complainant and nothing was left between the parties and that the complainant did not wish to proceed further. The learned trial court, by its separate orders dated 08.05.2008, passed in above matters while recording that settlement had taken place, acquitted respondent-company and its directors. The petitioner chose to deliberately suppress this fact of filing criminal complaints and subsequently settlement before learned court in the said proceedings. Entering into MOU dated 17.10.2010, filing of criminal complaints and subsequent settlement dated 08.05.2008 in said proceedings, are material and relevant for the reason that no amount has been given by petitioner after the date of MOU and filing of settlement dated 08.05.2008. 16. Learned counsel for respondent-company argued that petitioner not only deliberately concealed the fact of MOU and settlement as submitted herein-above, but also deliberately concealed the fact of filing of a civil suit for recovery of the same alleged debt, in respect of which the present winding up petition has been filed during the pendency of the winding up petition before the District and Sessions Judge, Jaipur Metropolitan, Jaipur, but the same has not been disclosed to this court, which in seizin of present matter. Petitioner also filed a criminal complaint to which FIR No. 409/2014 at Police Station Ashok Nagar, Jaipur, has been registered in relation to alleged transaction. It is thus clear that petitioner has not come before this court with clean hands. The petitioner has suppressed material facts and therefore the petition is liable to be dismissed. Petitioner also filed a criminal complaint to which FIR No. 409/2014 at Police Station Ashok Nagar, Jaipur, has been registered in relation to alleged transaction. It is thus clear that petitioner has not come before this court with clean hands. The petitioner has suppressed material facts and therefore the petition is liable to be dismissed. In support of this argument, learned counsel for respondent-company has relied on the judgments in Jyoti Limited v. International Pumps & Projects Ltd. - (2001) 103 Comp Cas 103 (Delhi) , and Agarwal Industries Ltd. v. Golden Oil Industries (P) Ltd. - (1999) 106 Comp Cas 78 (Bom) . 17. Learned counsel for respondent-company submitted that by filing settlement dated 08.05.2008, while withdrawing the criminal complaints under Section 138, the petitioner has made an admission in judicial proceedings that apart from the postdated cheques, nothing to be taken or to be given between petitioner and respondent-company as on the date of filing of settlement i.e. 08.05.2008. This is clear admission by petitioner that nothing remains due and in view of the admission, it is clear that no amount is due from respondent-company to petitioner and it requires no further proof. Learned counsel for respondent-company, in support of this argument, has relied on judgment of the Supreme Court in Nagindas Ramdas v. Dalpatram Lochanram alias Brijram and others - AIR 1974 SC 471 . 18. Shri Sandeep Taneja, learned counsel for respondent-company, has argued that petitioner has taken different stand about MOU. On the one hand, it is stated that MOU was non-committal and only an understanding and cannot be treated as an agreement and on the other hand, it has admitted that land admeasuring 10987.34 square yards and postdated cheques were received amounting to partial execution of the MOU. On the one hand, petitioner stated that MOU is not an agreement, whereas, on the other hand, in the civil suit, it is stated that the MOU is agreement. The expression ikrarnama has been used for the MOU in the plaint. It is argued that the MOU is an agreement which fulfils the requirements of Section 10 of the Indian Contract Act. The Indian Contract Act even recognises oral agreement. The contention of petitioner that MOU is not agreement, is thus misconceived. 19. The expression ikrarnama has been used for the MOU in the plaint. It is argued that the MOU is an agreement which fulfils the requirements of Section 10 of the Indian Contract Act. The Indian Contract Act even recognises oral agreement. The contention of petitioner that MOU is not agreement, is thus misconceived. 19. Learned counsel further argued that in the civil suit filed for recovery of the debt, which is the subject matter of present petition, petitioner has impleaded six defendants including respondent-company as defendant no.1 and has sought decree jointly and severally against all the defendants. The defendant no. 6 in the plaint has been stated to be confirming party-guarantor on the basis of the MOU, evidently relying upon MOU. However, in the winding-up petition, nowhere it is stated that the respondent-company was jointly and severally liable along-with five more persons. Without prejudice to the submission that petitioner suppressed all these facts, as mentioned herein-above, evidently different cases have been set up in the winding-up petition and the civil suit. 20. From a bare perusal of plaint, it is clear that petitioner has sought recovery not only from respondent-company but from all persons im-pleaded as defendants in the suit. This action of petitioner itself indicates that alleged liability against respondent-company is not an admitted debt. Learned trial court after complete trial shall adjudicate as to whether any amount is due from the defendants and if yes, then who is liable to pay the said alleged amount to petitioner and this is yet to be adjudicated. It is argued that when in there no admitted debt and liability is yet to be adjudicated in civil suit, the winding-up petition is not maintainable. Learned counsel for respondent-company has relied on judgments in Lok Housing and Construction v. Rajasthan Rajya Vidyut Utpadan Nigam Limited - (2002) 4 WLA 393 and Smt. Vijaylakshmi v. Hari Har Ginning and Pressing - (1999) 96 Comp Cases 723 . 21. Learned counsel for respondent-company further argued that language of Clause 3 of the MOU is clear and unambiguous, which provides that for the land mentioned therein, cash of Rs. 1.17 crores and postdated cheques were given by respondent-company to petitioner. The petitioner admitted possession of land admeasuring 10987.34 square yards and also receipt of the postdated cheques, but disputed that it has not received cash and balance land. 1.17 crores and postdated cheques were given by respondent-company to petitioner. The petitioner admitted possession of land admeasuring 10987.34 square yards and also receipt of the postdated cheques, but disputed that it has not received cash and balance land. The said contention is contrary to clear language of Clause 3 of the MOU and is, thus, a bona-fide dispute, which cannot be adjudicated in present winding-up petition. 22. It is argued that petitioner has nowhere stated that entering into MOU and filing of settlement before learned court in criminal complaint under Section 138 of the N.I. Act, was without his free consent. The MOU and the settlement is thus binding on the petitioner. The petitioner, in its rejoinder at page 136, without any proof has merely stated that the respondent-company persuaded the petitioner to withdraw the criminal complaints. However, it is submitted that though since 2008 till filing of rejoinder, the petitioner had not made any correspondence or taken any action on the ground that it was persuaded to withdraw the complaints, yet, it is submitted that it can only be decided in a trial by leading evidence and not in the present winding-up petition. 23. Learned counsel for respondent-company submitted that it is relevant to note that if the MOU had not been acted upon or settlement was under persuasion, petitioner would have sent notice to this effect or taken action against respondent-company. However, no action has been taken till filing of winding-up petition. It is argued that winding-up proceedings are not for recovery of amount. The mechanism of winding-up cannot be allowed to be utilised merely as a means for realising debts due from a company, if the debt is bona-fide disputed and the company adduces prima-facie proof of facts. The language of the MOU that the debt was discharged, subsequently settlement was filed by the petitioner itself, which is an admission on its part and further filing of civil suit against respondent-company and five other persons, make it clear that in there existence of debatable and contentious issues and bona-fide dispute. It is submitted that the debatable and contentious issues, which require trial before any judicial finding, could be given one way or the other, cannot be decided in winding-up petition as the winding-up petition is a summary proceeding. It is submitted that the debatable and contentious issues, which require trial before any judicial finding, could be given one way or the other, cannot be decided in winding-up petition as the winding-up petition is a summary proceeding. Learned counsel for respondent-company, in support of this argument, has relied on the judgments in M/s Madhusudan Gordhan Das and Co. v. Madhu Woollen Industries Pvt. Ltd. - (1970) 3 SCC 632 , Mediquip Systems Pvt. Ltd. v. Proxima Medical System GMBH - (2005) 7 SCC 42 , and RPG Cables Limited v. Logic Eastern India Pvt. Ltd. - (2011) 161 Comp Cases 443 . 24. Learned counsel for respondent-company contended that the stand taken by petitioner that alleged due amount has been admitted and acknowledged by respondent-company in its balance-sheet holds no ground for it, is not a conclusive proof of the acknowledgment of the debt. In support of this contention, learned counsel for respondent-company has relied on the judgments in Smt. Vijaylakshmi v. Hari Har Ginning and Pressing - (1999) 96 Comp Case 723 (AP) and Walnut Packaging P. Ltd. v. Sirpur Paper Mills Ltd. and another - (2009) 148 Comp Cases 330 (AP) . 25. Learned counsel for respondent-company lastly argued that the amount shown as due to petitioner in balance-sheet is for accounting purposes only and therefore the same cannot be said to be admitted and acknowledged debt payable by respondent-company to petitioner. The petitioner has tried to mislead the court by putting the figures in a manner to show as if the respondent-company is a non-functional company and unable to pay its debt and has also made submissions against the directors of the respondent-company alleging siphoning of funds. In a winding-up petition filed by creditor, it is the creditor who has to prove that the debt is admitted. In the present case, the alleged debt is substantially disputed and, therefore, the petition is liable to be dismissed. 26. Having heard learned counsel for the parties and perused the material on record, I have given my thoughtful consideration to rival submissions. 27. Law, as to in what circumstances, a company can be wound up, is clear that if the court finds that a debt exists and proved against respondent-company and that such debt is definite and ascertained one. 26. Having heard learned counsel for the parties and perused the material on record, I have given my thoughtful consideration to rival submissions. 27. Law, as to in what circumstances, a company can be wound up, is clear that if the court finds that a debt exists and proved against respondent-company and that such debt is definite and ascertained one. It has to be seen further that it is within limitation and a demand of such debt has been made through statutory legal notice under Section 434 of the Companies Act, and failure of respondent-company in payment of such debt within 21 days from the date of receipt of notice. It is to be further seen whether or not defense raised by respondent-company is substantial or bona-fide. If defense raised by respondent-company is not found to be substantial or bona-fide and found false or frivolous or that such defense has been raised just to make a clock on the winding up proceedings; without disputing the debt or disputing it only in part, the court should order for winding up of the company. If the defense raised is not likely to succeed in point of law, the court should order for winding up. Furthermore, if the debt proved has been acknowledged by the respondent-company either in its correspondence or accounts books or balance sheet filed with the Registrar of Companies or through issuance of cheques may be dishonourd later, the same being admission on part of respondent-company, winding up order should be passed. Respondent-company is estopped from taking a plea contrary to its admission. In the instant case, not only the debt has been proved by the petitioner but also respondent-company has admitted, acknowledged and accepted the debt due in favor of petitioner in its accounts, balance sheets filed with the Registrar of companies and further through issuance of cheques in the month of July and August, 2011 towards part payment of such debt. Further, the respondent-company, before this Court, in its reply at Page 112, has specifically admitted that “ formality of transfer of land is yet to take place.” Despite it, respondent-company has failed to pay the debt to the petitioner within the statutory period of 21 days allowed to it by serving the legal notice under Section 434 of the Companies Act. 28. 28. Keeping in view aforesaid proposition of law, if facts of present case are analysed, it is found that the petitioner that the petitioner gave seven cheques of different dates in the month of April and May, 2006 for a sum of Rs. 9,10,00,000/- (Rs.nine crores ten lacs only) to respondent-company as advance towards purchase of certain land. Pursuant to MOU of April, 2006 followed by MOU dated 03.05.2006, the land, which was agreed to be sold to petitioner by respondent-company, was in fact not owned by respondent-company. The respondent-company then agreed to refund aforesaid amount. In fact, it gave four cheques of all dated July, 2006 totalling a sum of Rs. 12,10,00,000/- to return the debt which includes penalty of Rs. 3 Crores. All these three cheques were dishonoured, which led to filing of three criminal complaints under Section 138 of the Negotiable Instruments Act against the Directors of the respondent company. Eventually, another MOU dated 17.02.2007 was entered into between the parties wherein the petitioner undertook to withdraw all the aforesaid three complaints and respondent-company agreed to handover possession of land measuring 7000 sq. yards and 29000 sq. yards claimed to be owned and possessed by respondent situated at village Sevapura and would give cash amounting to Rs. 1.17 Crore to petitioner. Pursuant to this MOU, ten postdated cheques totalling to Rs. 1.20 Crore were handed over to the petitioner. Accordingly, petitioner got aforesaid three complaints disposed of. Two cheques out of aforesaid cheques, were dishonoured. Instead of the land, which was agreed to be given, respondent-company handed over possession of only three plots measuring to 10987.34 square yards worth of Rs. 81,00,000/- (Rupees eighty one lac only) to petitioner in village Sevapura and later agreed to return the balance amount of debt to the petitioner. It paid a sum of Rs. 2,57,00,000/- including amount of Rs. 80,00,000/- paid vide eight cheques mentioned in MOU dated 17.10.2007 to petitioner till 31.03.2011 through various cheques, DD’s and RTGS transfer. It further transferred a sum of Rs. 50,00,000/-(Rupees fifty lac only) during financial year 2011-12 vide RTGS and cheque dated 07.08.2011 and 09.02.2012. There still remained a sum of Rs. 5,04,00,000/- (Rupees five crore four lac only) due to petitioner as on 31.03.2012. 29. Petitioner, apart from filing winding-up petition, has also filed civil suit for recovery of the amount. It further transferred a sum of Rs. 50,00,000/-(Rupees fifty lac only) during financial year 2011-12 vide RTGS and cheque dated 07.08.2011 and 09.02.2012. There still remained a sum of Rs. 5,04,00,000/- (Rupees five crore four lac only) due to petitioner as on 31.03.2012. 29. Petitioner, apart from filing winding-up petition, has also filed civil suit for recovery of the amount. Even though it has been asserted by learned counsel appearing for respondent-company that they have handed over land measuring 7000 square yard worth Rs. 2.03 crores and another land measuring 29000 square yard worth Rs. 4.72 crores and paid a sum of Rs. 1.17 crores but despite opportunities granted to respondent-company, it failed to substantiate as to actually where such land is located and when it was handed over to petitioner. It also failed to prove the mode and manner of payment of Rs. 1.17 crore, referred to in the MOU dated 17.10.2007. Admittedly, no entry about such payment is shown to have been recorded in their Books of Accounts. 30. Mere mention of fact on belief of petitioner that respondent-company honoured its commitment and got the criminal complaints disposed of accordingly, would not absolve the respondent-company of liability to repay the loan amount. The factum of settlement is not disputed by petitioner but what is core issue is that settlement was actually acted upon and petitioner has been able to prima facie shows that it was not fully acted upon. This court is not inclined to uphold contention of respondent-company that fact about MOU and settlement as submitted was deliberately concealed by petitioner and filing of civil suit by the petitioner. Petitioner in the rejoinder has mentioned those facts substantially and clearly and learned counsel in the course of argument has sufficiently explained thereabout. The acquittal of the respondent-company in criminal complaints cannot absolve them of liability to repay the loan because such acquittal was brought about on account of settlement arrived at between the parties and the petitioner not pursuing the complaints for that reason. In fact, the respondent-company in their reply to the petition, did not dispute the fact it has been in its books of accounts maintaining a running account of the petitioner and as on 31.03.2011 the petitioner is credited to respondent-company for a sum of Rs. 5,04,00,000/- (Five Crores Four Lacs only). In fact, the respondent-company in their reply to the petition, did not dispute the fact it has been in its books of accounts maintaining a running account of the petitioner and as on 31.03.2011 the petitioner is credited to respondent-company for a sum of Rs. 5,04,00,000/- (Five Crores Four Lacs only). In para 8 of its reply, it has made an attempt to explain away the aforesaid facts by stating that “the amount shown due from the respondent company to the petitioner in the books of the accounts of the respondent company is only an entry for accounting purposes as formality for transfer of land is yet to take place.” This poorly reflects upon the conduct of respondent-company. The petitioner has successfully demonstrated that respondent-company has been passing through a bad phase and was principally insolvent; it has not been carrying out any meaningful business for last quite some time, which is reflected from audited balance-sheet and directors reports placed on record for the year ended on 31.03.2011, 31.03.2012 and 31.03.2013. 31. Non mention of earlier MOU dated 03.05.2006 in the company petition would also not be fatal for its maintainability because it was superimposed by subsequent events which culminated in execution of fresh MOU dated 17.10.2007. Respondent-company, pursuant to such fresh MOU, agreed to agreed to give cash amounting of Rs. 1.17 Crore to petitioner. A detailed explanation regarding earlier MOU has been given by the petitioner in rejoinder. 32. Contention that petitioner has concealed the fact about filing of civil suit and that since the civil suit has been filed for recovery of aforesaid amount, the winding-up petition cannot be maintained, is also noted to be rejected. The petitioner has contended that it has to file civil suit because lis would become time barred in the month of January, 2015. The suit has been filed to recover the outstanding dues of the petitioner from respondent-company as also its directors and guarantors because liability of guarantors is co-extensive with that of the principal borrower and only remedy to recover the dues from the, guarantors and concerning party is the civil suit, and such civil suit would not be maintainable without im-pleading the company and its directors as party. Mere filing of suit during pendency of wining-up petition either would not render such petition in-fructuous or not maintainable as such suit can proceed with leave of company court. 33. Mere filing of suit during pendency of wining-up petition either would not render such petition in-fructuous or not maintainable as such suit can proceed with leave of company court. 33. The Supreme Court in M/s. Vijay Industries v. M/s NATL Technologies Ltd. - AIR 2009 SC 1695 observed that if in there no bona-fide dispute with regard to the sum payable towards the principal, it is open to the creditor to resort to both the remedies of filing of a civil suit as well as filing of a petition for winding-up of the company. 34. The Delhi High Court in Karam Chand Thapar and Bros (Coal) Sales Ltd. v. Acme Paper Ltd. - AIR 1994 Delhi 1 , rejected similar argument thus, “(5) The second plea raised in defense is that the petitioner has since filed a civil suit and the amount due to the petitioner is yet to be ascertained after proper trial of the suit and that the winding up petition cannot go on after the suit is instituted. Counsel for respondent has cited in support of this contention an authority of this Court in the case of Traders Bank Limited v. Kwick Travel Pvt. Ltd. reported as 1988 (2) C.L.J. 56 . that case does not help the respondent. That was a case where the suit had been filed earlier and during the pendency of the suit the petition for winding up was filed by the petitioner. In fact the Court itself had acknowledged as correct the views expressed in the case of Central Bank of India v. Sukhani Mining and Engineering Industries Pvt. Ltd. and others reported as 1987(47)Company Cases Page 1 wherein Patna High Court had come to the conclusion that the winding up petition which had already been filed would not be stayed merely because the creditor had filed a suit against the company. It was observed in that case as Under-in there no provision in the Act which ousts the jurisdiction of the Court in continuing and deciding the winding up proceeding in spite of the fact that in there a suit by creditor for the realisation of his debt. It was observed in that case as Under-in there no provision in the Act which ousts the jurisdiction of the Court in continuing and deciding the winding up proceeding in spite of the fact that in there a suit by creditor for the realisation of his debt. If the Legislature had intended that on account of the fact that a suit or proceeding has been filed in another Court, the court in seisin of the winding up application will stay the winding up proceeding on that ground alone, there would have been a provision to that effect in the Companies Act. However, in there no such provision because a winding up proceeding is not merely for the benefit of the petitioner but of all its shareholders, creditors or contributories, therefore, merely because a creditor has filed a suit against the company the winding up proceedings cannot be stayed." (6) The Learned Single Judge has placed reliance on the case of Amainamated Commercial Traders (P) Ltd. v. A.C.K. Krishnaswami and another reported as 1965(35) Company Cases Page 456 where Hon'ble Supreme Court had held that:- "A petition presented ostensibly for a winding-up order; but really to exercise pressure will be dismissed, and under the circumstances, may be stigmatized as a scandalous abuse of the process of the Court. At one time, petitions founded on disputed debt were directed to stand over till the debt was established by action if however, there was no reason to believe that the debt, if established would not be paid. the petition was dismissed. The modern practise has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the Court may decide it on the petition and make the order." (7) In that judgment the Supreme Court clearly laid down that if the debt is not disputed on some substantial ground, the Court may decide it on the petition and pass order accordingly. That is the case here. The entire correspondence referred to above clearly shows that the amount payable to the petitioner was not once but repeatedly acknowledged as due and payable by the respondent and it was accompanied by promises to pay. That is the case here. The entire correspondence referred to above clearly shows that the amount payable to the petitioner was not once but repeatedly acknowledged as due and payable by the respondent and it was accompanied by promises to pay. I have already held in the case of Shri V.K. Jain v. M/s. Richa Laboratories (P) Limited in C.P.159 of 1988 that if during the pendency of winding up proceedings a suit was filed by the creditor to avoid the institution of the suit getting barred by limitation the proceedings for winding up will not be invalidated. To the same effect was another judgment in the case of State Bank of India v. Hedde and Co. lay Limited reported as 1987 (62) Company Cases 239 . (8) In the light of the above discussion, I hold that a prima facie case of the respondent's inability to pay its debt has been made out by the petitioner. Another factor which cannot be lost sight of while considering the petition for winding up proceedings is that the respondent company has not been doing any business ever since 1985. Its factory is lying closed and admittedly the officers of the respondent company have no access to the factory premises.” 35. The judgment of Andhra Pradesh High Court in Vijay Lakshmi v. Hari Hara Ginning and Pressing, Nandigaon - 1999 (96) Comp Cases 723 (AP) , cited by learned counsel for respondents, is distinguishable on facts as in that case the winding-up petition was dismissed on the ground that a bona-fide and substantial defense was available to the respondent. Therein the bona-fide civil dispute between the parties was pending in civil court and a bona-fide point of limitation was also observed by the court. In that very case it was observed by the Andhra Pradesh High Court that “... No doubt mere filing of a civil suit need not be an impediment to proceed with the Company petition for winding up. Yet, it is a circumstance to be taken into consideration while arriving at the conclusion that the debt is admitted or in there a bona fide dispute with respect to the same and it has to be determined in an appropriate civil forum.” 36. Yet, it is a circumstance to be taken into consideration while arriving at the conclusion that the debt is admitted or in there a bona fide dispute with respect to the same and it has to be determined in an appropriate civil forum.” 36. Another judgment cited by the respondent in Agarwal Industries Ltd. v. Golden Oil Industries (P) Ltd. - AIR 1999 Bom 362 is also distinguishable wherein winding-up petition was dismissed as the petitioners had dis entitled themselves from being heard on merits in view of the fact that they had obtained an ex-parte order by withholding vital information from the Court and by making deliberate misstatement and falsehoods. That case is also distinguishable because therein the civil suit was filed on 28.12.1998 i.e. prior to filing of the winding-up petition on 19.03.1999. In the present case, however, winding-up petition was filed on 02.01.2013 whereas civil suit has been filed in January, 2015. Besides, the respondent-company, in the present case, by no stretch of imagination, can be said to have any bona-fide defense. Although, Shri Jugal Kishore Agarwal, the director of petitioner company, had also filed an F.I.R. against respondent-company, its directors and guarantor in respect of their criminal liability for offence under Sections 403, 406, 417, 420, 421, 422, 423, 424, 120B, 109 read with Section 34 IPC. Even that would be not a reason to hold the winding-up petition as not maintainable because criminal liability of directors of a company is distinct and different from their civil liability inasmuch as the winding-up of a company is meant to protect not only the interest of creditors concerned, but also all the shareholders in general and public at large dealing with such company. 37. The Delhi High Court in Ajay Johri and others v. Singal Land and Finance P. Ltd. - (1985) 58 Company Cases 350 (Delhi) , was dealing with a case where company received advance for sale of plots from buyers but that plots were not handed over to them. Company was assuring transfer of land in their favour by process of mutation in revenue records, but gradually it became clear that they have been cheated and defrauded, and the respondent was avoiding on one pretext or the other, to get the land mutated in their favour. Company was assuring transfer of land in their favour by process of mutation in revenue records, but gradually it became clear that they have been cheated and defrauded, and the respondent was avoiding on one pretext or the other, to get the land mutated in their favour. Enquiries revealed that the company had itself no title over the land and as such entirely misrepresented that it was the absolute owner of the land. Respondent did not supply the proof of ownership of the land even on demand. In these circumstances, the Delhi High Court held that a company which has enacted large scale public deception and seems to be bent upon doing so in future as well, has no right to exist and must be wound up. 38. The Supreme Court in M/s. Vijay Industries v. M/s. NATL Technologies Ltd. - AIR 2009 SC 1695 , has held that if the debt is not disputed on some substantial or bona fide ground, the court should order for winding up. In Madhusudan Gordhandas and Co. v. Madhu Woollen Industries pvt. Ltd. - 1970 (3) SCC 632 , the Supreme Court has held that Section 433 of the Companies Act does not state that the debt must be precisely a definite sum. It was not disputed before the Supreme Court that failure to pay agreed interest or the statutory interest would come within the purview of the word 'debt'. It is one thing to say that the amount of debt is not definite or ascertainable because of the bona fide dispute raised thereabout or there exists a dispute as regards quantity or quality of supply or such other defences which are available to the purchaser; but it is another thing to say that although the due as regards the principal amount resulting from the quantity or quality of supply of the goods stands admitted but a question is raised as to whether any agreement had been entered into for payment of interest or whether the rate of interest would be applicable or not. In the latter case, it was held by the Supreme Court, the applicable for winding up cannot be dismissed. 39. In the latter case, it was held by the Supreme Court, the applicable for winding up cannot be dismissed. 39. Having considered contentions made by learned counsel for the parties and taking note of the material on record, it is irresistible conclusion that the respondent-company does not have any substantial dispute or bona-fide defence in respect of claim of petitioner for its dues and a situation clearly obtains showing that the respondent-company is unable to pay its debt and has lost its substratum. The court is therefore satisfied that a case is made out for admitting the petition and appointing a provisional liquidator. 40. The petition is therefore admitted. A copy of this order be served on the Official Liquidator attached to this court, who is hereby appointed as Provisional Liquidator of respondent-company under Section 450 of the Companies Act, 1956. The Official Liquidator is directed to immediately take possession of all movable and immovable assets, books of accounts and records of the respondent-company. The Official Liquidator shall then also prepare an inventory of all the assets of respondent-company, before sealing the premise in which they are kept. He may seek assistance of a valuer to value the assets. He is also permitted to take assistance of local police authority for this purpose. The citation of the winding up petition being admitted, be published in the Official Gazette and two newspapers, namely, Dainik Bhaskar (Hindi) Jaipur Edition and the Times of India (English) Jaipur Edition in terms of Rule 24 of the Companies (Courts) Rules, 1959, the costs whereof shall be borne by the petitioner. The Directors of the respondent-company are required to strictly comply with the provisions of Section 454 of the Companies Act, 1956 and Rule 130 Rules and furnish to the Official Liquidator the statement of affairs in the prescribed form verified by an affidavit within 21 days. They will also file affidavits in this court with advance copies to the Official Liquidator within four weeks thereafter stating out details of all the assets of movable and immovable properties of the respondent-company and enclosed therewith balance-sheet, profit and loss account and copies of statement of all the bank accounts for last three years. 41. A copy of this order be endorsed to the Official Liquidator attached to this court for needful.Matter to come up after eight weeks.Liquidator appointed - Petition to come up after 8 weeks. *******