Unimpeachable debt requirement: winding up dismissed because claim was disputed, unproven and prima facie time barred.

Whether the company was unable to pay its debts was examined against the requirement that the creditor's claim be clear, valid and unimpeachable; the court found material evidence (absence of original ledgers or written interest agreement, payments indicating loan account cleared by October 1986, uncertain deposit balance) showed a bona fide dispute and that the interest claim rested on an unpleaded oral agreement and appeared time barred. Applying the unimpeachable debt standard for winding up, the petition was dismissed and the petitioner was directed to pursue the disputed monetary claim in a civil suit.

---

---

Issues: Whether the respondent-company is unable to pay its debts and the petition for winding up on that ground should be allowed.

Analysis: The petitioner relied on alleged advances, a deposit and claimed interest but failed to produce original ledgers or a written agreement for interest; material correspondence and payments indicate that the loan account was paid by October 1986 and that the deposit account balance was uncertain. The claim for interest rests on unpleaded oral agreement and is prima facie barred by limitation. There is a bona fide dispute on substantial grounds and the debt is not shown to be clear, valid and unimpeachable as required for a winding up order under Section 434(1)(a) and 434(1)(b) of the Companies Act, 1956.

Conclusion: The winding up petition is dismissed; the petitioner has not established an unimpeachable debt and the claim may be pursued in a civil suit.

---