Ashim Kumar Banerjee, J.

PREFACE:

The interpretation of law is not mathematics that would give a definite result and the only result. However, concept is changing in mathematics as well. W hen a problem is required to be resolved through mathematics it would have more than one solution. We are not mathematician nor having the expertise. Hence, we do not wish to venture any further on the issue. In fact, that may not be relevant herein. Our endeavour is to draw a distinction between the interpretation of law and resolution of a mathematical problem.

A literal interpretation would definitely suggest a strict meaning following the grammar and literal meaning of each word. Katju, J. speaking for the Apex Court would say ([AIR 2011 Supreme Court 1925 [Premananda and Ors Vs. Mohan Koikal and Ors.]), “the literal rule of interpretation simply means that we mean what we say and we say what we mean”. His Lordship further observed, “the literal rule of interpretation really means that there should be no interpretation. In other words, Court should read the statute as it is without distorting or twisting its language”. His Lordship eloquently explained what literal interpretation would mean. The golden rule of interpretation would however suggest, the law should be given a correct meaning keeping in view the true spirit and the mindset that the legislature had while enacting the law. The law, in our view, should be interpreted to extend the benefit to all who would otherwise be entitled to.

It was not for stretching it to an extent beyond its capacity. It was not to supplant something that was not contemplated. It was to give the widest amplitude, it could bear that would come only from the true spirit for which such law was enacted. Our Indian laws are century old. Laws are still prevalent that had been born before the Constitution was. The Courts of law time to time extended the scope to cope up with the prevalent situation. The commercial laws are no exception. Post-millennium period changed the economic scenario of our country drastically. By the advent of globalization our Courts would have to take a liberal approach while deciding a commercial litigation so that the foreign investors do not get any wrong signal. The Courts are quite aware of the limitations while expanding the scope of the stature. At the same time the plea of hyper technicalities must not create hindrance to have a controversy particularly a commercial one, being decided on merit. In our humble view and with all humility may we say, if we cannot reach up to the expectation of the commercial world, our country would not be in a position to cope up with the advent of globalization and would lag behind.

Keeping the above in the back of our mind, let us discuss the law on the subject for which we are invited to decide the present controversy.

The law of winding up in India is celebrating its century in a sense, the Indian Companies Act, 1913, was the mother of the present Companies Act, 1956 that is now prevalent in the corporate field within the country. Law of winding up is a part of it. Our Division Bench presided over by one of us (Ashim Kumar Banerjee, J.) interpreted the law of winding up ([2013] 177 Company Cases 15 [Kotak Mahindra Bank Ltd. Vs. Eastern Spinning Mills and Industries Ltd.])The relevant extract is quoted below:

“The creditor has to show they would have a debt more than Rs.500/-that the company failed or neglected to pay or otherwise unable to pay the debts because of its precarious financial condition that would make it just and equitable to pass an order of winding up. Neglect to pay is a fiction that would depend upon the notice to be served under section 434 (1) (a) that would permit the creditor to claim deemed insolvency as a fiction. However, that would not take away the creditor’s right to claim, the company is also commercially insolvent or otherwise unable to pay its debt. If we give a close look to section 433 (e) and (f) we wo