Judgment

P. N. BHAGWATI, J.:- We think that the view taken by the High Court is the correct view on the interpretation of Sections 529 and 530 of the Companies Act, 1956. Section 529 provides that in the winding up of an insolvent company, the same rules shall prevail and be observed with regard to the provable debts as are in force for the time being under the law of insolvency with respect to the estate of persons adjudged insolvent. This provision brings in the applicability of Section 46 of the Provincial Insolvency Act which reads:

"Where there have been mutual dealings between an insolvent and a creditor proving or claiming to prove a debt under this Act, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against, any sum due from the other party, and the balance of the account, shall be claimed or paid on either side respectively."

This rule enacted in Section 46 of the Provincial Insolvency Act with regard to the debts provable by a creditor against the insolvent must, therefore, likewise apply in regard to debts provable against a company in winding up. Consequently,