JUDGMENT : Sanjib Banerjee, J. 1. The principal question that arises in this appeal at the admission stage of a creditor’s winding-up petition is how to treat a cross-claim of the company that has not been adjudicated upon though it appears to be for an amount exceeding the creditor’s debt. The creditor is the appellant here, questioning the propriety of a judgment and order dated November 3, 2014, delivered some sixteen months or so after the hearing was concluded in the matter. 2. The appellant complains of the inordinate delay in the judgment being delivered and says that merely on such ground the order impugned is liable to be set aside. The appellant refers to the principle enunciated in the judgment reported at (2001) 7 SCC 318 (Anil Rai v. State of Bihar) where the court observed that justice delayed is justice denied, but justice withheld is even worse than that. Though the delay in the Anil Rai case was of nearly two years, it was observed in the report that in civil matters judgment must be pronounced within two months of the hearing being concluded. The appellant laments that several of the legal grounds canvassed by it before the company court are not reflected at all in the impugned judgment. 3. However, merely on the ground of delay in delivering the impugned judgment an appellate forum should not remand the matter for a fresh consideration before the original forum since that would do greater disservice to the litigants. Ordinarily, in such a situation, the matter should be considered afresh by the appellate forum without reference to the judgment impugned since it is impossible for all facets of the rival submission to be reflected in a judgment that is delivered after three months or so from the conclusion of the hearing. Regrettable as it is, the parties may lose a forum or tier in such process. 4. The appellant appointed the respondent company as its handling agent for distributing the appellant’s products in India. There was an initial agreement of February 18, 1998 which was followed by a subsequent agreement of April 10, 2001. By a notice of August 2, 2010, the appellant terminated the agreement with the company. The termination took effect after three months of the date of the notice of termination: from November 1, 2010. There was an initial agreement of February 18, 1998 which was followed by a subsequent agreement of April 10, 2001. By a notice of August 2, 2010, the appellant terminated the agreement with the company. The termination took effect after three months of the date of the notice of termination: from November 1, 2010. The company immediately protested on September 6, 2010, claming that there was “no justification for you to unilaterally … (cause) … the existing arrangement to cease after expiry of 3 months …” The appellant retorted by its letter of September 28, 2010 and reiterated that the contract stood terminated “as and from November 1, 2010, upon the expiry of three months from our termination letter dated August 2, 2010.” 5. On or about November 8, 2010, the company filed Suit No. 2943 of 2010 before the Bombay High Court challenging the termination and claiming damages of Rs.2383 crore. Shortly after the appellant came to know of the institution of such suit, it issued a notice under Section 434 of the Companies Act, 1956 to the company, but addressed to a particular director of the company at an address that may not have been the registered office of the company. The appellant referred to the Bombay suit and described it as completely frivolous, it claimed that the company held stocks of the appellant’s products worth Rs.15,87,48,368/- and furnished details of such stocks over 30-odd pages. The appellant claimed that an amount of Rs.18,06,54,531.09/- was due and owing from the company to the appellant and furnished particulars in support of such claim. 6. In response to the initial statutory notice, the company furnished a reply on December 29, 2010 wherein it asserted that “we rightfully exercised our lien on the stocks lawfully held by us for payment due to us from you which are claimed in the suit …” Elsewhere in the same reply, the company claimed as follows: “Firstly, we are not a debtor since the amount is due from the stockists and not from us and are otherwise also not correct and are made up. The amounts claimed are subject matter of Civil Suit No. 2943 of 2010, where in the amounts collected by us from the stockists amounting to Rs.4,55,85,744.21/- for the sales effected by us stands already adjusted against our claims. The amounts claimed are subject matter of Civil Suit No. 2943 of 2010, where in the amounts collected by us from the stockists amounting to Rs.4,55,85,744.21/- for the sales effected by us stands already adjusted against our claims. Further, a sum of Rs.8,90,48,129.38/- receivable from the stockists stands also already adjusted against our claims in the said suit. Needless to mention although the sum of Rs.8,90,48,129.38/- was receivable from stockists and had not been received upto the date of filing of the said suit, yet credit for the same along with credit for the said sum of Rs.4,55,85,744.21/- totalling to Rs.13,46,33,873.59/- was given to you by us in the plaint and the balance due from you is claimed. As such no amount is due and/or payable to you more so after having known, that credit for the said amount was already given to you.” 7. Several letters were issued thereafter in January and February of 2011 by the company, first calling upon the appellant to take delivery of the expired stock, then demanding that the appellant pay off the amount claimed by the company before obtaining delivery of the stock, and finally, the company refusing to return the stock till the appellant paid off the company’s claim. 8. In June, 2011 the appellant brought CP No. 358 of 2011 to this court for winding up the company. An application for appointment of a provisional liquidator under Section 450 of the said Act was also filed. In an appeal arising out of the provisional liquidator application, a Division Bench of this court directed the company on November 24, 2011 to file a detailed stock statement. A stock statement was forwarded in terms of such order to the appellant on January 3, 2012. However, on August 21, 2012 the first winding-up petition was withdrawn by the appellant due to a formal defect in the statutory notice and liberty was granted to the appellant to file a fresh petition. 9. A second statutory notice was issued by the appellant on October 23, 2012, claming a sum of Rs.29,77,87,311/- with interest at the rate of two per cent per month. The company denied its liability by its reply of November 14, 2012. The appellant reiterated its claim on November 14, 2012 before launching the present proceedings on December 21, 2012. 10. A second statutory notice was issued by the appellant on October 23, 2012, claming a sum of Rs.29,77,87,311/- with interest at the rate of two per cent per month. The company denied its liability by its reply of November 14, 2012. The appellant reiterated its claim on November 14, 2012 before launching the present proceedings on December 21, 2012. 10. The appellant seeks to found its claim on the admission of the company thereof in the affidavits filed by the company in this court and the claim lodged before the Bombay High Court. The appellant refers to the affidavit used by the company in course of the previous round of proceedings in this court. In such affidavit affirmed on behalf of the company by director T. S. Grover on December 31, 2011, the company sought to assert that the appellant had made a claim that the company held the appellant’s stocks of goods of value in excess of Rs.15.87 crore without indicating any particulars in respect thereof. In addition, the company reiterated its claim in excess of Rs.2383 crore as made in the Bombay suit. 11. The appellant, however, refers to paragraph 3(j) of the company’s first affidavit in this court where the company asserted as follows: “(The company) sought decree in the sum of Rs.23,83,84,62,001.41 … in its favour and against the Petitioner and its holding companies after giving due credit of the adjustment of Rs.4,55,85,744.21 … received by the Respondent from the stocks sold by it prior to illegal termination of the agreement/arrangement, amount receivable (though not received) for the stocks sold upto the date of illegal termination amounting to Rs.8,90,48,129.38 and also exercised lien in respect of the stocks held by it.” 12. The appellant also refers to the following passage from the first affidavit filed by the company in this court which appears at page 148 in the first volume of the paper-books in this appeal: “The Respondent, having received from the stockists in all the sum of Rs.4,55,85,744.21 for the goods invoiced and sold upto the date of termination of the arrangement and being entitled to adjust against the amounts due and payable by the Petitioner and others, adjusted the same from the amount claimed in the suit and adjustment is duly reflected in the suit so filed. The Respondent being likely to receive a further sum of Rs.8,90,48,129.38 though not fully received till date for the goods invoiced and sold upto the date of termination of the arrangement, and in anticipation of receiving the said money, has already adjusted from the same from the amount claimed in the suit. …” 13. Elsewhere, at paragraph 16 of the same affidavit filed by the company, it has claimed as follows: “16. … The Respondent, having received from the stockists in all the sum of Rs.4,55,85,744.21 … have already adjusted the same from the amounts claimed by it in the suit … It was averred in the plaint that Respondent is likely to receive a further sum of Rs.8,90,48,129.38 … and in anticipation of having to receive the said money, adjusted the same from its amount claimed in the suit and adjustment thereof is duly reflected in the suit so filed. Furthermore, the amount realized by sale of the stocks effected from 1.11.2010 to 30.12.2011 in the sum of Rs.5,87,76,666/- has also been adjusted partly against the dues outstanding from the Petitioner. …” 14. Pursuant to the appellate order of November 24, 2011 passed in course of the first round of proceedings, the company forwarded a stock-statement by a letter dated January 3, 2012 issued by Advocate on its behalf. The details furnished were in respect of the stocks as at December 29, 2011; stocks where the sell-by dates had already expired as at December 29, 2011; and, stocks which were due to expire within six months of December 29, 2011. In the detailed statement, the company claimed that it held stocks of the appellant’s manufacture of value of Rs.6,68,31,784.68/- as at December 29, 2011; expired stocks of value of Rs.84,06,359.70/- as at December 29, 2011 and further stocks of value of Rs.88,53,269.73/- which were to expire by June 28, 2012. 15. The appellant demonstrates that notwithstanding such admitted position, the company refused to make over the balance stocks that remained unsold, whether or not the sell-by dates had passed or were about to pass. The appellant refers to a letter of December 29, 2010 by which the company called upon the appellant to pay the company the value of the stocks and take back the same. The appellant refers to a letter of December 29, 2010 by which the company called upon the appellant to pay the company the value of the stocks and take back the same. The appellant submits that it was absurd of the company to make such a demand since the company admitted holding the appellant’s stocks and the appellant could not be expected to buy back its stocks from the company when the company had not paid for them in the first place. Subsequent letters issued by the company on similar lines on January 21, 2011 and February 7, 2011 have been referred to by the appellant. The company, however, for the first time offered to the appellant that the appellant take back the stocks held by the company by a letter of April 21, 2012. Such offer by the company was without prejudice to its rights in the pending proceedings. The appellant says that the company was aware that the company was not entitled to sell the appellant’s products after November 1, 2010, but the company purported to make an offer for the return of the goods without demanding payment there for only in end-April, 2012, when most of the stocks may have passed their expiry dates or the appellant would have had no time to engage other distributors down to the grassroots level to sell such stocks which had been manufactured at least two years prior to the company’s offer of April 21, 2012. 16. The appellant refers to the plaint filed by the company in the Bombay High Court and says that during the pendency of the matter before the company court and after judgment was reserved there on, the appellant was constrained to lodge a counter-claim. The appellant asserts that the filing of the counter-claim by it in the Bombay suit can have no impact on the present proceedings; but, in the event such counter-claim had not been filed and the appellant was either unable to succeed in this court or unable to realise its debt, its claim would have been barred by limitation. 17. The appellant attacks the quality of the claim lodged by the company in the Bombay High Court. The appellant points out that the subsisting agreement between the parties till its termination did not prohibit the termination or cancellation thereof, nor did it provide for any fixed tenure or the like. 17. The appellant attacks the quality of the claim lodged by the company in the Bombay High Court. The appellant points out that the subsisting agreement between the parties till its termination did not prohibit the termination or cancellation thereof, nor did it provide for any fixed tenure or the like. The appellant says that the agreement did not contain any negative covenant and, in short, such agreement was incapable of being specifically enforced. 18. The appellant suggests that the company’s claim is ridiculous as the company appears to have assumed that the arrangement would have had to be continued for a further period of 50 years and the company’s assessment of damages is on such basis. The appellant describes the company’s claim to be imaginary and fanciful and says that the company was aware, immediately upon receipt of the notice of termination of August 2, 2010, that the company would have to make the payment of the appellant’s dues and, in a mala fide attempt to try and pre-empt the same or mislead the court where the appellant carried its claim, the company hurriedly launched the Bombay suit by including false and fictitious heads of claim, most of them overlapping several times to add up to a completely imaginary figure in excess of Rs.2000 crore. 19. Three legal grounds have been urged by the appellant: that an unliquidated claim in damages cannot be set off against any admitted debt; that a cross-claim by a company anticipating a demand from its creditor would not deter the company court from investigating into the quality of the defence and the substance of the company’s cross-suit; and, the company did not and does not enjoy any contractual or statutory right of lien against the appellant or the appellant’s money wrongfully withheld by it. 20. The appellant has first referred to a judgment reported at AIR 1974 SC 1265 (Union of India v. Raman Iron Foundry). The appellant submits that though the clause in the Central government contract that fell for consideration in that case was subsequently altered and the judgment does not govern the new clause, the law as recognised in the judgment holds the field. The appellant submits that though the clause in the Central government contract that fell for consideration in that case was subsequently altered and the judgment does not govern the new clause, the law as recognised in the judgment holds the field. The following passages from the report are of some relevance in the present context: “… Now the law is well settled that a claim for unliquidated damages does not give rise to a debt until the liability is adjudicated and damages assessed by the decree or order of a Court or other adjudicatory authority. When there is a breach of contract, the party who commits the breach does not eo instanti incur any pecuniary obligation, nor does the party complaining of the breach becomes entitled to a debt due from the other party. The only right which the party aggrieved by the breach of the contract has is the right to sue for damages …” “ … A claim for damages for breach of contract is, therefore, not a claim for a sum presently due and payable and the purchaser is not entitled … to recover the amount of such claim by appropriating other sums due to the contractor …” 21. The appellant has also referred to a Karnataka judgment reported at ILR 2001 Kar 2950 (M/s. Greenhills Exports (Private) Limited v. Coffee Board) where the court referred to the judgment in Raman Iron Foundry and held that the enunciation of the legal proposition therein continues to be good law in regard to the principles relating to damages. The Division Bench also expressed the view that in a claim for damages there is no “existing obligation” to pay any amount and a claim for damages becomes a “debt due”, not when the loss is quantified by the party complaining of the breach, but when a competent court holds that a breach has been committed and assesses the quantum of loss and awards damages. 22. Much stress has been laid by the parties on a Division Bench judgment of this court reported at (2005) 4 CHN 343 (SRC Steel Private Limited v. Bharat Industrial Corporation Limited). Indeed, the appellant has referred to such judgment in anticipation of it being the sheet-anchor of the company’s argument. 22. Much stress has been laid by the parties on a Division Bench judgment of this court reported at (2005) 4 CHN 343 (SRC Steel Private Limited v. Bharat Industrial Corporation Limited). Indeed, the appellant has referred to such judgment in anticipation of it being the sheet-anchor of the company’s argument. In that case, the company judge disregarded the claim made by the company in a suit filed against the creditor and held that there was no bona fide dispute to the creditor’s claim. In the appeal from the order of admission, it was held, on appreciating the quality of the claim in the company’s suit qua the debt claimed to be due by the petitioning creditor, that the company had made out a plausible defence that warranted the creditor’s winding-up petition to be stayed till the disposal of the company’s suit. The appellant insists that the judgment in SRC Steel does not further the proposition that any or every cross-claim filed by the company against the petitioning creditor of value in excess of the petitioning creditor’s claim would result in the winding-up proceedings being arrested till the disposal of the money suit. 23. Indeed, there are several indications in the report that the consideration in such a situation is no different than in the run-of-the-mill claim by a creditor that a company was unable to pay its debts. At paragraph 19 of the report it was observed that “It is well-settled law that a winding up petition is a perfectly proper remedy for enforcing payment of a just debt.” At paragraph 28 of the report the essential question that arises on a creditor’s winding-up petition was noticed thus: “the all important question, therefore, is whether the debt which is the subject-matter of winding up notice is a bona fide disputed one or not.” And, at paragraphs 37 and 44 of the report, the tests for assessing a creditor’s claim which is sought to be disputed on the strength of a cross-claim in a civil suit, was laid down as follows: “37. Our task is simply to see whether the company comes within the test quoted above, i.e. although it does not make out a positively good defence now, might it be able to make out one at the time of trial of the suit?” “44. Our task is simply to see whether the company comes within the test quoted above, i.e. although it does not make out a positively good defence now, might it be able to make out one at the time of trial of the suit?” “44. The basic question accordingly is the company’s suit a bogus suit or is there some reasonable ground, however thin, but still reasonable, on the basis of which the suit can be opined to be not really a bogus one?” 24. On the appreciation of the nature of the company’s claim in its suit, including by projecting how the trial may pan out in such case, the appeal was allowed and the winding-up proceedings arrested till the disposal of the company’s suit by observing as follows: “65. … Were the proof of the debt made indisputable, the Court would be compelled to admit the winding up petition. That it has been admitted by the first Court is not because of use of any discretion in this regard; it could be admitted only upon a finding that the debt is indisputable and the defence of the company is bogus, mala fide or moonshine. …” 25. Two other Division Bench judgments of this court reported at (2013) 1 CHN 278 (Ravi Cement Product Limited v. Kankani Construction Private Limited) and (2013) 2 CHN 1 (Vikash Metal and Power Limited v. Corporation Bank) have also been placed by the appellant for the proposition that the mere pendency of a company’s cross-claim by way of a money suit elsewhere would not impede the company court admitting a creditor’s winding-up petition if the company failed to make out a bona fide defence to the creditor’s claim. 26. The appellant claims that the appellant was constrained to launch the counter-claim in the company’s Bombay suit since the Bombay High Court does not recognise a self-injunction on a party as is sometimes granted to petitioning creditors in this court. The appellant has also relied on the provisions for lien under Section 171 of the Contract Act, 1872 and under Section 221 thereof. The appellant has also relied on the provisions for lien under Section 171 of the Contract Act, 1872 and under Section 221 thereof. The appellant maintains that the lien claimed by the company is not covered by the statutory lien recognised in Section 171 of the Contract Act and, despite the company’s position qua the appellant being somewhat akin to that of an agent, the company cannot exercise any lien under Section 221 of the Contract Act because the company’s claim is not on account of commission, disbursement or services. The appellant submits that there is no lien of any description recognised in the agreement between the parties and, in any event, such agreement stands terminated. The appellant says that there is no common law lien of any kind that the company may invoke. Thus, the appellant suggests, that in the face of the company’s admission of its extent of indebtedness to the appellant in respect of the sums realised by the company or likely to be realised from its stockists and the value of the goods at the time of the termination of November 1, 2010, no part thereof may be lawfully adjusted against any bogus or fictitious lien or against an unliquidated claim in damages. 27. The appellant asserts that the company may prosecute its Bombay suit, but the debt admitted by the company to be due to the appellant cannot be withheld on any legal ground whatsoever. The failure by the company to pay off such admitted debt, according to the appellant, reveals the company’s inability to pay its debts for which the petition is liable to be admitted. 28. The company refers to its immediate response after receiving the notice of termination of August 2, 2010 and the fact that its Bombay suit was instituted prior to any statutory notice being issued by the appellant to the company. The company exhorts that it has taken an honourable stand in the Bombay suit by not merely claiming what it perceives to be its rightful dues, but also giving credit to the appellant for the monies due to it. The company exhorts that it has taken an honourable stand in the Bombay suit by not merely claiming what it perceives to be its rightful dues, but also giving credit to the appellant for the monies due to it. The company says that the appellant has no independent claim as the vague figure of Rs.15.87 crore found in the appellant’s initial statutory notice has been abandoned by the appellant and the appellant has proceeded in this court merely on the basis of the statements made by the company in its Bombay suit which were reiterated in course of the company’s affidavit used here in the first round of proceedings. 29. The company refers to its claim in the Bombay suit, including the various heads, and points to the claims, inter alia, on account of sales tax and the like which are realisable from the appellant. The company submits that the principle of adjustment is well known in commercial law and maintains that the company has duly adjusted the sums due to the appellant against the claim made in the Bombay suit and the ultimate amount demanded is after giving such credit. 30. Apropos the principle of adjustment, the company refers to a judgment reported at AIR 1997 Del 355 (Cofex Exports Limited v. Canara Bank). Paragraphs 10 and 11 of the report are placed for the discussion on such aspect. The Division Bench of the Delhi High Court held that a plea of adjustment is distinct from a plea of set-off or counter-claim as an adjustment, ordinarily, is relatable to a period anterior to the date of such plea being set out before the court. The company also refers to a Division Bench judgment of this court reported at 61 Comp Cas 504 (J. N. Roy Chowdhury (Traders) Private Limited v. Jainti Enterprises). However, in that case the contract was for a fixed period of five years and the petitioning creditor stopped placing further orders after two years, resulting in loss and damage to the company. It was on appreciation of the nature of the defence – of breach on the face of the contract – that the court regarded the defence to be bona fide. 31. It was on appreciation of the nature of the defence – of breach on the face of the contract – that the court regarded the defence to be bona fide. 31. Another Division Bench judgment of this court reported at (1994) 1 CHN 409 (Dunlop India Limited v. Anamika Udyog) has been placed by the company where the legal issue discussed was whether a company court could direct security to be furnished by the company to show its bona fides and relegate the claimant to a regular suit. Again, in that case, the court was satisfied that the defence placed by the company was bona fide and, as such, the winding-up proceedings were liable to be stayed. 32. Two English judgments have been referred to by the company on how a cross-claim raised by a company should be dealt with in adjudicating a creditor’s winding-up petition. In the judgment reported at (1969) 3 AER 882 (Re L.H.F. Wools, Limited) though all three judges in the Court of Appeal agreed that in view of the cross-claim of the company the winding-up proceedings should fail, the individual opinions vary in degrees. The dictum may be gleaned from the report to imply that if there is a serious cross-claim, where the quantum of the cross-claim overtops the creditor’s claim, the creditor’s claim would have to wait till the company’s cross-claim is adjudicated on. 33. In the other English judgment reported at (1999) 1 AER 374 (Re Bayoil SA), the question framed was how the company court would deal with a winding-up petition when the petitioner’s debt is undisputed “but the company has a genuine and serious cross-claim which it has been unable to litigate, in an amount exceeding the amount of the petitioner’s debt?” All three judges agreed in that case that the practice in the company court in England was “not to allow the winding up where there is a genuine cross-claim except in special circumstances.” 34. The company relies on an old, oft-quoted judgment of this court reported at 23 CWN 844 (The Company v. Sir Rameswar Singh) where the court said that there was no necessity in winding-up proceedings to conclude that the dispute raised by the company would invariably succeed, “it is sufficient for us to say that it appears … there is ground for supposing that there is a bona fide dispute as to a substantial part of the debt …” 35. A more recent judgment reported at (2010) 10 SCC 553 (Iba Health (India) Private Limited v. Info-Drive System Sdn Bhd) has been placed for the nature of the tests to be applied on a creditor’s winding-up petition as recognised at paragraph 29 of the report. They are no different from the tests applied nearly a century ago in Rameswar Singh. For the same proposition, a Division Bench judgment of the Delhi High Court reported at (2009) 150 Comp Cas 887 (German Homoepathic Distributors Private Limited v. Deutsche Homeopathic-Union Dhu Arzneimittel GmbH and Co. KG) has been carried by the company for the recognition of the principle therein that if there is a bona fide dispute and the defence is a substantial one, the court will not wind up the company. 36. It must be noticed that the case as ultimately run by the appellant is quite a departure from the statutory notice of October 23, 2012 on which the second round of proceedings is founded by the appellant. The notice demanded three several sums, detailed in three independent sets of documents, to be paid by the company to the appellant: a sum of Rs.15,87,48,368/- on account of the value of goods held by the company from November 1, 2010; a sum of Rs.12,16,41,466/- on account of receivables due from the customers for the period 2008 to October 31, 2010; and, a sum of Rs.1,73,97,477/- in respect of the HDFC Bank collection account. Probably because admission is the best form of evidence, the appellant appears to have jettisoned the heads of claim indicated in its relevant statutory notice and settled for the amounts apparently admitted by the company in its Bombay suit and in the affidavit filed by it in the previous round of proceedings in this court. 37. Probably because admission is the best form of evidence, the appellant appears to have jettisoned the heads of claim indicated in its relevant statutory notice and settled for the amounts apparently admitted by the company in its Bombay suit and in the affidavit filed by it in the previous round of proceedings in this court. 37. It goes without saying that a claim in damages cannot be elevated to the status of an immediately enforceable claim to be adjusted or set off against an admitted debt. There is no doubt that if x amount is due from A to B and y amount is due from B to A, the amounts may be adjusted and the person with a positive net amount due may be paid only such balance. Equally, if there is a claim by way of legal proceedings by A against B for amount x and B has also a claim for amount y, B can seek adjustment by setting off the lesser amount of y against amount x or counter-claiming for the balance amount of y after adjusting it against the lesser amount of x. But such form adjustment would arise when rival debts are due, where a debt is not an inchoate claim but a specified liquidated amount immediately recoverable in law. 38. A claim in damages, on the other hand, is subject to two sets of adjudication albeit in the same proceedings: the entitlement thereof and the assessment of the quantum of damages. Merely because a person has a claim in damages against another would not imply that the undisputed debt of the other may be withheld till the unadjudicated unliquidated claim in damages is pronounced upon by an appropriate forum. Equally, a stark breach of a contract by a party and its denial of the consequent claim in damages by the other may not, in certain circumstances, be completely ignored even if the party in breach has an undisputed amount due from the other. 39. At the end of the day, it boils down to the one question and one question alone which is relevant at the admission stage of a creditor’s winding-up petition: would the defence inevitably fail or has it an arguable chance of success. 39. At the end of the day, it boils down to the one question and one question alone which is relevant at the admission stage of a creditor’s winding-up petition: would the defence inevitably fail or has it an arguable chance of success. It is in this context that the judgment in SRC Steel instructs that the company judge would have to ascertain whether the cross-claim of the company by way of a suit is utterly bogus. It is, thus, that the English courts exercise their discretion in favour of the company only upon appreciating that there is a genuine and serious cross-claim. 40. It is here that the law on this aspect in this country has to be seen to be somewhat nuanced than the approach in England. The distinction is evident from paragraph 65 of the report in SRC Steel where the Division Bench observed that a company court had no discretion at the admission stage of a creditor’s winding-up petition: if the debt was bona fide disputed the petition would not be admitted; if the defence was moonshine, the petitioner would be entitled to an order of admission ex debito justitiae. The element of discretion that the English court speaks of may not be available in view of the two-stage procedure in a creditor’s winding-up petition that has been adopted in this court for the best part of nearly six decades. 41. There could be another reason which has not been spelt out in clear words in company court judgments in this country dealing with an un-adjudicated cross-claim as a defence to a creditor’s winding-up petition. The filing of a suit in this country is relatively cheap and may not be subject to the rigorous assessment of costs at the end of a failed action as in England or in other jurisdictions in more developed countries. On a cost-benefit analysis, therefore, a company in this country may lodge a suit by way of a cross-claim by paying a few thousands by way of court fees to ward off a claim in crores by a creditor. There can be no assumption here that merely because an action based on a claim has been initiated, there must be an element of seriousness therein or genuineness in the character of the claim. 42. There can be no assumption here that merely because an action based on a claim has been initiated, there must be an element of seriousness therein or genuineness in the character of the claim. 42. Here is a company which does not refer to the agreement or arrangement being of a fixed tenure or the same being terminated at a premature stage. The company has shown nothing from the agreements that it had with the appellant that required the company to set up any infrastructure to last decades on the promise that the supply would continue over any extended period. It is true that the arrangement may have continued, in fact, for several decades, but the appellant was not bound to continue it indefinitely. The appellant gave reasonable notice of three months and asked for its products not to be sold after such period of three months from the date of the notice. The immediate response of the company was not that the termination was contrary to the terms of the agreement between the parties. It is possible that an agent profits much from its association with a giant of a principal. But if the agreement between the parties, on its proper interpretation, does not oblige the principal to continue the association indefinitely or for a fixed tenure and leaves the principal free to terminate it at the principal’s will, the agent cannot count the profits that it cannot make upon the termination and slap a claim on the principal there for. Fundamentally, there does not appear to be any legal basis to the company’s claim in damages or in its assertion of any form of lien to deny the immediate pay-out to the appellant of the sums admitted by the company to be due and owing to the appellant. 43. The admission made by the company as to the extent of its indebtedness to the appellant is evident from the claim made by it in its Bombay suit and its averments in its affidavits filed in this court. In addition, there is the stock-statement furnished by the company through Advocate’s letter of January 3, 2012. 44. The admission of the company in respect of the amounts of Rs.4,55,85,744.21/- and Rs.8,90,48,129.38/- is clear, unambiguous and unequivocal. In addition, there is the stock-statement furnished by the company through Advocate’s letter of January 3, 2012. 44. The admission of the company in respect of the amounts of Rs.4,55,85,744.21/- and Rs.8,90,48,129.38/- is clear, unambiguous and unequivocal. In the absence of any contractual or statutory or even a common law lien being cited by the company, there is no dispute as to such amounts being unimpeachably due. Again, in the light of the company’s admission that the amounts of Rs.6,68,31,784.68, Rs.84,06,359.70 and Rs.88,53,269.73 were the values of the stocks retained by the company as at December 29, 2011, there is no dispute that such further sum of Rs.8,40,91,414.11 is liable to be paid by the company to the appellant. 45. In terms of the tests as laid down in Kironmoyee Dassi [(49) CWN 246] when the company is unable to make out any bona fide defence to the petitioning creditor’s claim, the creditor is entitled to be immediately paid the amount due and owing to it. The form of an order in such a situation, on a creditor’s winding-up petition, is to admit the petition for the relevant amount and permit the company to pay off the same to ward off advertisements; or take a risk to have the advertisements published and seek the benefit of the discretion at the final stage of the company not being wound up despite an undisputed debt being established. It is also possible that when the debt is undisputed and there is no bona fide defence indicated by the company, the court may still not require immediate payment to be made to the petitioning creditor to avoid the publication of advertisements, but allow the company to secure the undisputed debt to avoid the petition being advertised and partaking a representative character with an open invitation to other creditors to join in. The distinction between the two choices open to the company court is not based on the quality of the defence. It has more to do with the company being required to establish its solvency despite the debt being undisputed. For, in the ultimate analysis, it is the solvency of the company that is questioned in a creditor’s winding-up petition. 46. It is the second option which appears to be more appropriate in this case. It has more to do with the company being required to establish its solvency despite the debt being undisputed. For, in the ultimate analysis, it is the solvency of the company that is questioned in a creditor’s winding-up petition. 46. It is the second option which appears to be more appropriate in this case. The judgment and order impugned stand set aside and the company petition is admitted in the sum of Rs.21,87,25,287.70/- (Twenty one crore eighty seven lakh twenty five thousand two hundred eighty seven and seventy paisa only). The petition will be advertised in the ‘Times of India’ and in ‘Bartaman’ newspapers within four weeks from date, indicating that the matter will appear before the company court on November 7, 2017. However, the advertisements should not be issued within two weeks from date to afford the company an opportunity to secure the entire amount by way of cash deposit with the Registrar, Original Side. If the security is furnished with intimation to Advocate for the appellant within the time permitted, the advertisements will not be published. 47. If the security is furnished, the Registrar will invest the same by way of a fixed deposit with any nationalised bank having its branch within the vicinity of this court and the security may be transferred, without being diminished, to the appropriate officer of the Bombay High Court upon an order in such regard being obtained from the Bombay High Court in the pending suit. In default of such security being furnished within the time indicated, the advertisements will follow. Publication in the Official Gazette will stand dispensed with. 48. The costs of the present proceedings and the appellant’s claim on account of interest will be taken into account in course of the Bombay suit, subject to the approval of such court. Siddhartha Chattopadhyay, J. I agree.