R. V. VASANTHA KUMAR, J.

( 1 ) THIS petition arises out of an action initiated for winding up of the respondent company (hereinafter called as 'the Company') under Section 433 (e) of the Companies Act, 1956 (hereinafter referred to as the 'act' ).

( 2 ) THE question that arises for consideration in this company petition is about the exercise of powers of company court in respect of a petition filed under Section 433 (e) of the Companies act, 1956 (Central Act 1 of 1956) even before issuing notice regarding admission?

( 3 ) THE petitioner claims to be a creditor of there spondent company and has caused a notice dated 3-12-1994 to be served on the company. Eventhough there is no mention in the notice that the same having been issued under Section 434 (i) (a) of the Act there is a mention that the same to be treated as a statutory notice under Section 434 of the Act. There is a demand for payment of debt. After the expiry of statutory period this company petition has been presented for winding up of the company on the averments that the company is unable to pay its debts. Relevant averments are found at para 11 of the petition. It reads:"the petitioner submits that the company is in dire financial distress. The total liabilities of the company far exceeds its assets. The company has sustained losses of over Rs. 200/- lakhs as on date. The company is not in a position to pay its debts and is commercially insolvent. Under these circumstances, it is just and proper to wind up the company. "in support of the petition the following documents are produced: documents annexures (1) Copy of letter of confirmation dated 3-12-1988 issued by the company acknowledging indebtedness in a sum of Rs, 76,141. 02 paise. A (2) Copy of letter dated 30-11-1994 issued by the company confirming the outstanding balance amount as on 31-7-1988 at Rs. 77,141. 02 b (3) Copy of notice dated 3-12-1994 issued to the company by petitioner demanding payment of outstandings purported to be issued under Section 434 of the Companies Act. C (4) Copy of reply dated 5-12-1994 issued by the company to legal notice dated 3-12-1994 acknowledging and confirming the outstandings. D

( 4 ) WINDING up may be by two processes, one by voluntary winding up and another by compulsory winding up by the court. Voluntary winding up, and that of creditors voluntary winding up, the essential difference between compulsory winding up by the court and that of voluntary winding up is that the former does not involve action taken by any organ of the company itself whereas voluntary winding up does.

( 5 ) UNDER Section 433 of the Act, company may be wound up by the court on one or more of grounds mentioned in clauses (a) to (f ). Of these grounds by far the most important is ground (e) that the company is unable to pay its debts. Creditors are among those who may petition and this they are likely to do once it becomes widely known that the company is in financial difficulties like a petition for the bankruptcy of an individual a petition for winding up is creditors ultimate remedy and company is assumed to be insolvent and it is creditors in whose interests the winding up is undertaken.

( 6 ) THE ground on which the petitioner has sought winding upis that the company is unable to pay its debts both in the sense that it is actually unable to pay debts presently due and demanded and in the sense that it has reached a stage wherein the language of Sir. William Jaes v In Re. European Life assurance Society , that it is 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, language which seems to be the origin of the phrase 'commercial insolvent'. Further, it is to be noted that creditors for bringing the case within clauses of Section 434 of the Act depend on the notices sent and t

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