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of <h1>Court rules in favor of petitioner in debt dispute; respondent's objections dismissed; allowed to pursue interest through civil suit.</h1> <h3>VK. Jain Versus Richa Laboratories (P.) Ltd</h3> The court found in favor of the petitioner in a dispute over a debt owed by the respondent. Despite the respondent's objections regarding the notice of ... Winding up – Circumstances in which a company may be wound up, Company when deemed unable to pay its debts Issues:Debt owed by respondent to petitioner, dispute over claim, validity of notice of demand, fabrication of documents, change in date on balance confirmation letter, transfer of assets and liabilities, existence of business operations, presumption of inability to pay debts, filing of suit affecting winding up proceedings, entitlement to interest on outstanding balance.Debt Owed by Respondent to Petitioner:The petitioner alleged that the respondent owed Rs. 3,15,165 which remained unpaid despite a notice of demand. The respondent disputed the claim, citing a dispute regarding the delivery of goods and the timing of the pharmaceutical manufacturing license. The court found the respondent's arguments without merit, noting inconsistencies in their defense and lack of evidence to support their claims.Validity of Notice of Demand and Fabrication of Documents:The respondent raised objections regarding the validity of the notice of demand and alleged fabrication of documents by the petitioner. However, the court dismissed these objections, deeming them mala fide and false based on the evidence presented, including the carbon copy of the disputed letter and lack of substantial proof from the respondent.Transfer of Assets and Liabilities, Business Operations, and Presumption of Inability to Pay Debts:The court examined an agreement transferring assets and liabilities from a partnership firm to the respondent-company. It also noted the respondent's cessation of business operations since July 11, 1986. Based on these factors and the respondent's failure to respond to the notice of demand, the court presumed the respondent's inability to pay its debts, favoring the petitioner.Filing of Suit Affecting Winding Up Proceedings:The respondent argued that the petitioner's filing of a separate suit for recovery should invalidate the winding-up petition. However, the court disagreed, citing precedent that such a suit could be a precautionary measure to prevent limitation issues. The court found no merit in the respondent's argument and proceeded with the winding-up petition.Entitlement to Interest on Outstanding Balance:The petitioner claimed interest on the outstanding balance, but the court found no evidence or agreement supporting this claim. Without sufficient proof, the court could not conclude that the petitioner was entitled to charge interest at the alleged rate.In conclusion, the court admitted the petition, directing the publication of citations unless the respondent paid the principal amount due within a specified period. The court allowed the petitioner to pursue interest through the civil suit if the principal amount was paid, dismissing the petition accordingly.
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