1. This appeal, is brought by and on behalf of Vanaspati Industries Ltd., Delhi, and Lekh Raj Gupta claiming to be a director of Vanaspati Agency Ltd., and a director of Vanaspati Industries Ltd., Delhi.

2. The appeal relates to Vanaspati Industries Ltd., Delhi which was incorporated under the Companies Act of 1913 in January, 1943, with its registered office at i-A, Queensway, New Delhi. The nominal capital of the company is Rs. 50,00,000 divided into 3,50,000 ordinary shares of Rs. 10 each, 1,20,000 preference shares of Rs. 10 each and 1,50,000 deferred shares of Rs. 2 each. The amount of paid up capital is shown in the balance-sheet ending 30th June, 1948, as Rs. 33,42,967-8-0. One of the objects for which the company was established, inter alia, was to erect a factory or factories in or suitable place or places for the manufacture of vegetable ghee (Vanaspati), vegetable oil and allied products, tins and cannisters, chemicals, dyes or any other commodity. The managing agents of the company are a private limited company called the Vanaspati Agency Ltd., and Sir Sobha Singh is shown as the managing director of this company. Originally, firm Prabhu Dayal Hari Ram, who are now the petitioners in the application for winding up, were shareholders in this managing agents company and Lekh Raj Gupta was another major shareholder. One Ravi Kumar Jain purchased the shares of the petitioners' firm Prabhu Dayal Hari Ram, and he in turn sold them to Banarsi Lal Tulsyan and Sir Sobha Singh got the shares of Banarsi Lal Tulsyan in the managing agents Company. He holds 50% shares in that company. Sir Sobha Singh is the managing director of that company and is also an ex officio director of the Vanaspati Industries Ltd., Delhi. Lekh Raj Gupta being a member of the managing agents company is the ex officio director of the Vanaspati Industries Ltd., Delhi. There are five other directors.

3. On 25th May, 1949, firm Prabhu Dayal Hari Ram filed an application for winding up of the Vanaspati Industries Ltd., Delhi, claiming to be a creditor of the company to the extent of Rs. 40,091-2-3 as on 30th April, 1949. In that application they state that according to the statement of accounts, a photographic copy of which was produced with the petition, there was due to them a sum of Rs. 45,000 on 30th January, 1948, and since then they had received Rs. 10,000 in part payment on 9th August, 1948, and after giving credit for this amount the sum due to them was what I have stated above. The petitioner firm allege in their petition: (1) that the above-named sum is due to them, and on nth March, 1949, they sent a registered notice of demand to the respondent company at its registered office under Section 163 of the Companies Act requiring the company to pay the sum then due, viz., Rs. 39,716-11-0, together with interest at 6% per annum from 1st March, 1949, till date of payment within the statutory period of three weeks, but the company had neglected to make the payment nor had they secured or compounded the same with the petitioners, (2) that the company was commercially insolvent, (3) that the company was heavily indebted as (a) they owed a sum exceeding Rs. 22,00,000 to the Bank of Jaipur Ltd., Delhi, with whom they had mortgaged their entire assets, moveable and immoveable and (b) Sir Sobha Singh, the present managing director, had advanced to the company a sum of Rs. 10,00,000 and he had a second lien on the assets of the company. The company also owed huge sums of money to others and as a result of that the liabilities exceeded the actual market value of all the assets of the company, (4) that the company was running at a loss sine its “very inception and there was no prospect of its ever making a profit or paying off its creditors, and (5) that the company was commercially insolvent. On these grounds the petitioners prayed for the compulsory winding up of the company.

4. On 10th June, 1949, the learned District Judge made the following order: “Usual notice to issue to the company, shareholders, creditors and directors for 12th August, 1949. Notice may also be published in Government Gazette and in the two local newspapers (Hindustan Times and Indian News Chronicle.)”

5. Advertisements did issue in the Official Gazette as well as in the Hindustan Times and the Indian News Chronicle. Attached to the petition were the lists of directors and creditors the company on whom service had to be effected. List ‘A’ is of the directors but the name of Lekh Raj Gupta is not shown therein. List ‘B’ is the list of creditors and in that at No. 3 is shown Lekh Raj Gupta, No. 4, Faiz Bazaar, Darya Gunj, Delhi. It appears, however, that Lekh Raj Gupta was not served in the ordinary way.

6. On 12th August, 1949, a written statement in opposition was filed by the company verified by Sir Sobha Singh, managing director, Vanaspati Industries Ltd. In para 6 it was stated that although in the books of the company a sum of Rs. 35,000 was shown as being due to the petitioners the account required scrutiny as it related to the period when “the partners of the petitioners were in control of the management of the company. It was also pleaded that the amount was under lien of the company in respect of the various claims of the company against the petitioner firm and six headings were shown under which this lien was claimed. It was then submitted that the accounts required scrutiny and the petitioners were not presently entitled to the sum claimed. The respondent company was not unable to pay its debts nor it has denied payment of any money due to the petitioner firm, if found due”. It put forward the excuse that the books of the company had been taken away by the police for investigation into certain criminal cases.

7. It was, however, admitted by the company that it was running at a loss since its very inception, that there were heavy liabilities of the company, that necessary working capital was not available, that the confidence of the shareholders had been completely shaken on account of the intrigues and constant quarrels amongst the previous members of the managing agency, and that on account of these factors and the present trade depression and financial stringency in the market a situation had arisen in relation to the affairs of the respondent company when its business could not be run with any reasonable chance of profit and, therefore, the company had no objection to its being compulsorily wound up.

8. On nth August, 1949, Narayan Das, son of Prabhu Dayal, evidently a partner in the petitioner firm, filed an application accompanied by an affidavit in which he made certain allegations that Sir Sobha Singh was trying to create a lien of Rs. 10,00,000 on the assets of the company and it was prayed that pending the disposal of the winding up petition Sir Sobha Singh should be restrained from doing the same.

9. On the same day, i.e, nth August, 1949, Prem Rattan Sanwalka, a shareholder of the Vanaspati Industries, Ltd., holding 500 preference shares and 200 ordinary shares in the company, filed an application with an affidavit whereby he supported the winding up of the company and therein he stated that the company's position was precarious, it did not possess sufficient liquid assets to meet its liabilities, there was serious litigation amongst the directors of the managing agents, the company had been running at a loss since 1946 and there was no chance of its ever making a profit, there were serious allegations of fraud and dishonesty against the managing agents and some of the directors and the present management was out to exploit the company and its resources for their own ends and he made certain allegations against Sir Sobha Singh.

10. Mitter Sain, who claimed a security deposit of Rs. 4,000 with the company, also supported by his affidavit the winding up of the company. So did Mohammad Khalil who claimed a sum of Rs. 1,595 from the company on account of services rendered by him to the company. Jawala Parshad, a shareholder holding 700 ordinary shares, also supported the winding up.

11. I may state here that the reply which had been put in on behalf of the company by Sir Sobha Singh had the approval of the Board of Directors which met on nth August, 1949, and authorized Sir Sobha Singh to put in that reply. This is clear from annexure ‘C’ attached to the counter-affidavit filed in this Court, dated 15th September, 1949.

12. On these facts the learned District Judge passed a winding up order on 14th August, 1949, and he held that: (1) the application was not being opposed, (2) the company was not in a position to run at a profit and was commercially insolvent, (3) the company had denied that it owed Rs. 40,000 or over as claimed by the petitioner firm, but that did not affect the matter of liquidation, and (4) on a perusal of the petition and the affidavits filed, it was just and equitable to make a winding up order as the company was commercially insolvent and it was “not feasible to run it as a profitable concern”. He appointed Bakshi Harban Singh, Advocate, to be the official liquidator of the company whose remuneration was to be decided later. It may at this stage be pointed out that at the hearing on that date were present the following:—

Mr. A.N Khanna, Advocate for the petitioner; Mr. Ved Vyas, Advocate for Sir Sobha Singh, managing director of the company; Mr. Prem Rattan one of the shareholders. Nobody else is shown as present on that date.

13. Against this order Lekh Raj Gupta, director of the managing agents as also of the company, filed an appeal on 1st September, 1949, through Mr. K.L Gosain. His power of attorney shows that he was authorised to file this appeal by Lek Raj Gupta who just describes himself as Lekh Raj Gupta and nothing more.

14. This appeal was admitted by a Bench consisting of my Lord the Chief Justice and my learned brother Soni, J., on 2nd September, 1949, and they issued notice to the petitioning creditors and the liquidator for the stay returnable on 16th September, 1949. In the meanwhile the liquidator “beyond taking possession” was restrained from dealing with or disposing of the assets of the company.

15. A preliminary objection to the competency of the appeal by Lek Raj Gupta was taken by Mr. Tek Chand. He submitted that the appellant Lekh Raj Gupta could not file the appeal as he did not participate in the proceedings before the learned district Judge at any stage and he relied on a judgment of the Punjab Chief Court reported as Rustomji v. Official Liquidator of the Peoples' and Amritsar Bank Ltd. 1919 A.I.R 1919 Lah. 180. and on Securities Insurance Co., In re2, a judgment of the Court of Appeal. In the Punjab case an appeal was filed against an order of the company Judge sanctioning a compromise between the liquidator of the Peoples Bank and Lala Harikishen Lal by one Rustomji who did not take any part in the proceedings before the trial Judge and reliance was placed on Rule 58 (now Rule 149) of the Company Rules where it is stated that a contributory or creditor would not be entitled to attend any proceedings before the Judge unless he entered in a book to be kept for that purpose, his name and address etc. and in that case it was contended that as Rustomji had not entered his name in the book he was not entitled to attend the proceedings before the trial Court and he as a matter of fact had not attended such proceedings and, therefore, was no party to the proceedings and could not appeal, and relying on the second case which I have given above it was held in that case that Rustomji could not appeal.

16. The case relied on by the Punjab Court was, as I have said, In re Securities Insurance Co. That was a case where an arrangement was made under the Joint Stock Companies Arrangement Act, 1870, and an appeal was presented by persons whose interest as creditors were affected by the scheme but who had not opposed the scheme at the meeting of creditors, nor appeared before the Judge when his sanction was applied for, nor obtained leave to appeal. It was held by the Court of Appeal that as the appellant was not a party to the proceedings he could not appeal from the order without leave of the Court. At page 413 Lindley, L.J, observed: “Now, what was the practice of the Court of Chancery before 1862, and what has it been since? I understand the practice to be perfectly will settled that a person who is a party can appeal (of course within the proper time) without any leave, and that a person who without being a party is either bound by the order or is aggrieved by it, or is prejudicially affected by it, cannot appeal without leave……………If a person alleging himself to be aggrieved by an order can make out even a prima facie case why he should have leave he will get it; but without leave he is not entitled to appeal”. These are obeservations made by a very learned Judge of the Court of Appeal and are therefore entitled to great weight and I have no doubt that in any proceedings where a person does not attend the (sic) in the trial Court, he would not be entitled to appeal as a matter of right, but if I may say so, those cases are not applicable to the case before me. Here the proceedings have not arisen out of a scheme proposed and sanctioned under Section 153 of the Companies Act, but are proceedings in winding up and, therefore, Rule 149 has no application.

17. Reliance was also placed by the learned counsel on Indian Bank Ltd., Madras v. Seth Bansiram Jashamala. That was a case under the Civil Procedure Code and it was held that in a suit which was not under the insolvency Act and the Official Receiver was impleaded as a party but he did not file an appeal from the decree, a creditor who was not a party to the suit could not prefer the appeal simply because the Official Receiver had failed to do so. That case again, in my opinion, is not applicable to the facts of the present case. Another case which was relied on by the learned counsel was East Indian Cotton Mills Ltd., In re3. There it was held that a person who was not a party to the proceedings for winding up had no right to appeal from the order made in those proceedings. Das, J., as he then was, observed at page 545: “The right of appeal is the creature of Statute. Nobody has any inherent or natural right of appeal. Even a party to the procedings in which the impugned order is made has no right to appeal therefrom unless such right is specifically given by statute……This right of rehearing and appeal is, by the section, to be exercised in the same manner and subject to the same conditions as a right of appeal from an order made in exercise of original jurisdiction is to be exercised. Under the Civil Procedure Code………only a party to the proceedings who is adversely affected by an order made therein………may appeal from that order if that order is an appealable order. As has been held in Indian Bank Ltd. v. Seth Bansiram Jashamal, neither under the general principles nor under the Code can a person who was not a party to a suit prefer an appeal from the decree made in that suit merely on the ground that the Official Receiver who was a party to the suit represented him in the suit………Only a person whose name appears on the record as a party can appeal……There is no “provision for a stranger to the proceedings to appeal from an order made therein”. With these observations of the learned Judge I most respectfully agree.

18. The rules applicable to the present case will be 5, 6, 7, 8 and 9 of the Company Rules which deal with proceedings in applications for winding up. In the present case, however, the appellant was a party to these proceedings. He was shown in list ‘B’ as one of the creditors who had to be served and was, therefore, a party to the proceedings and even though he may not have appeared before the Court either deliberately or because he says he was prevented from doing so by a trick played on him by Sir Subha Singh he none the less remains a party and, therefore, he would still be covered by the observations of Lindley, L.J, where he said that a person who was a party to the proceedings could appeal without any leave as also was the opinion of Das, J., quoted above. Of course Mr. Tek Chand was on firmer grounds with regard to his objection that Lekh Raj Gupta could not appeal on behalf of the company, nor has he purported to do so as the power of attorney is only on his own behalf. I am, therefore, of the opinion that this objection of the learned counsel is without any force and the appeal at least on behalf of Lekh Raj Gupta was competent and has been properly filed.

19. The point in appeal which has been strongly urged before me was that the petitioning firm had no locus standi to bring the application. It was submitted that they were not creditors within the meaning of Sections 163 and 166 of the Companies Act as their debt was not admitted and at any rate, it was not presently payable, and it was also submitted that the learned Judge has not found in favour of the petitioning creditors on this point. In the petition the petitioners had definitely alleged that they were creditors to the extent of Rs. 40,091-2-3. Along with their petition they filed a photographic copy of the account and also the letter which the company had sent in reply to the notice of demand sent by the petitioners. It was never denied in the letter that the amount as such was not due. What was claimed was that the company had a lien on this debt because there were certain claims which the company had against the petitioners. Even in the reply filed in court it is admitted that the books of the company showed a credit of Rs. 35,000 to the petitioning creditors but there again some counter-claim had been made by the company against the petitioners and all they said was that the accounts required scrutiny and that the petitioners were not presently entitled to the sum claimed, why it is not clearly stated. In my opinion there is no clear denial that the amount is not due. The pleas taken up by the company are, in my opinion, quite vague. The debt of the petitioning creditors has not been disputed on any bona fide grounds.

20. Mr. Bhagwat Dayal who appeared for the petitioning creditors submitted in this connection that the reply of the company was vague both in their letter which they sent in reply to the notice of demand as well as in their written statement in opposition to the petition for winding up. He further submitted that notice having been given under Section 163 and the debt not having been paid or arrangement entered into, he was under Sections 162 and 163 of the Companies Act entitled to bring this application and on that ground alone the company must be wound up. Reliance was placed by the learned counsel in this connection on In re King's Cross Industrial Dwellings Co. where the petitioners claimed a sum of £ 78, 16 sh. 6d. as charges of advertisements and served a written notice of demand on the company but it remained unpaid for three weeks. The company did not dispute the fairness of the charges but set up an agreement alleged to have been entered into on behalf of the company. It was held by Sir R. Malins, V.C: “It is said that this is a bona fide question, whether there is or not a debt of the company, but, in my opinion, the Court is bound in such a case to see that the question is a substantial one before directing an action to be brought. I entertain no doubt that this is a debt of the company……”

21. The next case relied on by the learned counsel was In re Great Britain Mutual Life Assurance Society There a petition for winding up was presented by the mother of a person who held a policy for £ 5,000 with the company and had died. The claim having been made they resisted the payment on the allegation that at the time the policy was granted the assured was of intemperate habits and that this fact was concealed from the company. The mother had also commenced an action against the society for recovery of £ 5,000 and the society had made an offer to compromise £ 2,500 but the offer was refused. The amount was disputed and it was held that: “when a company, respondents to a winding up petition, dispute the validity of the petitioner's debt they must adduce on the hearing such evidence as will shew the Court that there is a question to be tried. If they failed to do this a winding up order ought to be made.”

22. Another case which was relied upon is Tikam Chand v. Harish Chandra. There an application for winding up was made by Tikam Chand claiming to be a creditor as well as a shareholder of the company, on the ground that the company was unable to pay its debts, and that it was just and equitable that the company should be wound up. The District Judge having granted the application, on appeal it was held by a single Judge that there was a bona fide dispute as to the claim of Tikam Chand and, therefore, lie should have been directed to file a regular suit if so advised, and as regards the second ground the learned judge held that the District Judge should have investigated the affairs of the company in the presence of the other shareholders, whose wishes should have received due consideration and then have passed such orders as were necessitated. The Court in Letters Patent appeal held that the dispute by the company with regard to the debt which had been paid by the petitioner was that the managing directors were personally liable for the amount which had been paid and, therefore, the indebtedness of the company to the creditor had been proved. It was further observed: It is true that a creditor of a solvent company, whose debt is bona fide disputed, will be restrained from presenting a petition for the winding up of the company, and to this category belongs the case of Tulsidas Lallubhai v. Bharat Khand Cotton Mill Co. Ltd. Nor can a creditor be allowed to present an application for winding up as a counter blast to an action brought against him by the company to enforce a legal claim. Such an application is made not for the bona fide purpose of winding up the company, but for a collateral ‘and sinister object: The Company v. Rameswar Singh. In the present case, however, there is no trace of any mala fides, and the object of the creditor is simply to recover his debt out of such assets as may be available”. It was further found in that case that the company was in a moribund condition, that the stocks were of no value when the application was made, that the report of the liquidator showed that the company had suffered heavy losses, and that, when the liquidator took charge, the closing balance in the books of the company was only Rs. 26-1-4. The petitioners being one of the principal creditors of the company who had presented his application for winding up it was held that he was so entitled. It was observed by Shadi Lal, C.J: “The proposition of law is indisputable that a creditor is prima facie entitled ex debita justitiae to an order of winding up.”

23. This case has been strongly pressed to my attention. As I have said ‘before, in my opinion, there was no bona fide dispute with regard to the amount due from the company to the petitioners. They had filed a copy of the account in the books of the company. The company never disputed that the amount shown in that account was wrong. All that they said was that they had some kind of a counter-claim which is of a very nebulous character. As was held in In re Great Britain Mutual Life Assurance Society, it was open to the company to adduce evidence to show the correctness of their allegations but they never did anything of the kind. On the other hand, their reply to the petition shows as also does the order of the learned District Judge that they were not very serious in their opposition to the winding up order.

24. Along with this appeal to this Court Lekh Raj Gupta filed an affidavit in which he alleged that the compulsory winding up order had been obtained because of collusion of Sir Sobha Singh with the petitioners and there was misrepresentation of facts and suppression of material particulars and that the order had been passed without ascertaining the wishes of the general body of shareholders and creditors by ordering a meeting to be held for the said purpose, that there were vast “block investments” amounting to something in the neighbourhood of 60 lakhs according to its last balance sheet and the appellant had not attended the hearing in the Court of the learned District Judge because of a trick played on him by Sir Sobha Singh and that the company was not commercially insolvent and the nonpayment of disputed debt of the petitioners did not make the company coramereially insolvent. He also stated that Sir Sobha Singh had put in the reply of the company without consulting the directors and shareholders of the company and that there was no resolution passed for winding up by the company and he made several other allegations. The company has made a long reply in which the significant fact stated is that the appellant and certain other officers of the company had been guilty of black-marketing and criminal prosecutions were pending against them. This fact has been admitted by Lekh Raj Gupta in his reply which he has filed to the counter-affidavit of Sir Sobha Singh. There he has stated: “It is true that Shree Chuni Lal Jaipuria along with the deponent and other officers of the company had been challaned at Meerut”. It may be a very vague form of making a statement but the statement is there. This affidavit of Sir Sobha Singh further shows that:—

(1) That originally Lekh Raj Gupta, his wife and his family were holders of 14,675 ordinary shares and 24,750 deferred shares but now hold 3,275 ordinary shares and 1,250 deferred shares out of a total of 1,16,225 shares;

(2) According to the balance-sheet Rs. 23,48,593 were loans owing to Joint Stock Banks, security deposits of the value of Rs. 1,28,500 were due form the company and the other liabilities were Rs. 2,24,307 (balance sheet as on 30th June, 1948). It also shows that: (a) In that year there was a loss of about Rs. 3,00,000; (b) Value of the plant and machinery was Rs. 28,39,000;

(3) The meeting of the company was held on nth September, 1949, under the chairmanship of the official liquidator. A resolution which was opposed by only one contributory, Mr. G.S Bedi, was passed by the contributories in the following words:

‘Resolved that the contributories have no confidence in Shri Lekh Raj Gupta and are of the opinion that the present difficulties of the company are largely due to his misconduct in relation to the affairs of the company’;

(4) It was also resolved unanimously that the contributories were not in favour of the appeal which was filed by Lekh Raj Gupta in the High Court of East Punjab at Simila; and

(5) Further that shareholders holding 2,01,996 shares were in favour of the winding up.”

25. It was submitted by Mr. Tek Chand that the total liabilities of the company were under mortgage or pledge. According to annexure ‘H’ which was filed with this affidavit the Bank of Jaipur Ltd., Delhi, was making demand for Rs. 7,00,000 due to it and Sir Sobha Singh was also keen to get back Rs. 10,00,000.

26. An application which was filed by the official liquidator showing that there were due to the staff of the company Rs. 27,933-3-10 which related to compensation for earned leave and wages of several employees and that there were no cash assets in the company's accounts to meet this liability. He has, as a matter of fact, prayed that the official liquidator might be allowed to mortgage or otherwise pledge the assets of the company to get this amount. This is supported by an affidavit. The balance-sheet above referred to shows that on the date of the application only Rs. 2,857 was the cash in hand of the company. These facts have been brought on the record in reply to an affidavit which was filed by the appellant in which he tried to show (1) that no amount was due to the petitioners from the company; (2) that the general body of shareholders was not in favour of winding up; (3) that the application for winding up was the result of collusion between Sir Sobha Singh and the petitioner firm; (4) that the company was not commercially insolvent and (5) that the appellant did not attend the hearing in the Court of the learned District Judge because of a trick played on him by Sir Sobha Singh.

27. On a perusal of the counter-affidavit filed in this Court and the reply in opposition filed by the company in the lower Court and the reply to the counter-affidavit filed by the appellant I am satisfied that none of the allegations which have been made by the appellant are substantiated. On the other hand, it appears to me that the appellant deliberately did not appear before the learned District Judge and his story that he was prevented by a trick of Sir Sobha Singh has not been proved if there ever was any substance in it at all. The company is heavily indebted to various creditors and all its assets are in mortgage or in pledge. It is commercially insolvent and there is no chance of its being able to carry on its business. As a matter of fact, Mr. Shamsher Bahadur who appeared for the liquidator and who put the case of the liquidator with great fairness was able to show that a careful study of the balance sheet and the state of affairs of the company proved that the substratum was gone and that there was no possible chance of a profit being made.

28. The fact that some of the directors of the company like the appellant and some officers are being accused of black-marketing and some trial is going or has been going on shows that the appellant is not a person who can be entrusted with the management of the company, or, at any rate, he will not inspire any confidence of the persons who are likely to come forward to finance the working of the company.

29. From these facts I must hold that the company is commercially insolvent. The expression “commercially involvent” was defined in In re European Life Assurance Society by Sir William James, V.C as follows: “Not in any technical sense but plainly and commercially insolvent, that is to say, that its assets are such, and its existing liabilities are such as to make it reasonably certain as to make the Court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities”. This test, in my opinion, is fulfilled in the present case. As I have shown above, the balance sheet shows that the existing and probable assets would be insufficient to meet the existing liabilities.

30. The petitioner brought this application for winding up on two grounds: (1) inability to pay debts; and (2) that it was just and equitable that the company be wound up. I have already held that the petitioners were creditors within the meaning of Sections 163 and 166 of the Companies Act and could bring the present application. A test was laid down by their Lordships of the Privy Council in Davis & Co. Ltd. v. Brunswick (Australia) Ltd., in which their Lordships said: “………the decisive question must be the question whether at the date of the presentation of the winding up petition there was any reasonable hope that the object of trading at a profit, with a-view to which the company was formed, could be attained.”

31. It was, therefore, for Mr. Gosain to satisfy me that there was any reasonable hope of the company working at a profit. The affidavits which have been filed before me show that it is not so possible.

32. If a company has not got enough credit in the market and has not got sufficient means even to pay its employees, it, is not likely that it will be able to carry on and its object could be attained. In Volume V of Halsbury's Laws of England, Hailsham Edition, page 547, there is a passage that it may be just and equitable to wind up a company where it is carrying on business at a loss and its remaining assets are insufficient to pay its debts.

33. In the present case there is no doubt that the company is carrying on its business at a loss and it has not been proved that it can pay off its debts from the remaining assets of the company. I am satisfied that on the facts which have been proved it is not a company which can carry on its business with any expectations of profit if it can carry on its business at all in the circumstances in which it is placed.

34. For the above reasons I am satisfied that the learned Judge was right in ordering the winding up of the company and I would, therefore, dismiss this appeal. The respondents will have costs of the appeal.

K.L Gosain, for the appellants.

Shamsher Bahadur, S. Gurdev Singh, Tek Chand and Nand Lal Salooja, for the respondents.

35. Appeal dismissed.