Winding-up petition maintainable despite curable verification defect; admitted royalty arrears and unpaid debt justified winding up.

A winding-up petition was not defeated by an initial verification defect under Rule 21 of the Companies (Court) Rules, 1959, because the defect was procedural and was cured when the board resolution authorising the deponent to sign and file the petition was produced; the petition was therefore maintainable. The company's own correspondence admitted royalty arrears, part payment had been made, and an unpaid cheque reinforced the debt; the alleged later arbitration did not negate the pre-existing liability. As the debt was not shown to be bona fide disputed, non-payment justified winding up for inability to pay debts, and the petition succeeded.

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Issues: (i) Whether the winding-up petition was maintainable despite the objection that it was not properly verified and filed in accordance with Rule 21 of the Companies (Court) Rules, 1959. (ii) Whether the respondent-company was liable to pay the admitted royalty arrears and whether non-payment furnished a ground for winding up under the Companies Act, 1956.

Issue (i): Whether the winding-up petition was maintainable despite the objection that it was not properly verified and filed in accordance with Rule 21 of the Companies (Court) Rules, 1959.

Analysis: Rule 21 requires a petition presented by a body corporate to be supported by an affidavit verified by a director, secretary or other principal officer, unless leave is granted to some other duly authorised person. The petition was initially defective because the deponent was not shown to be such an officer. However, the defect was later cured by placing on record the board resolution authorising him to sign and file the petition, and the rule did not require filing of a power of attorney. The defect was procedural and capable of regularisation.

Conclusion: The petition was held maintainable and the objection under Rule 21 was overruled.

Issue (ii): Whether the respondent-company was liable to pay the admitted royalty arrears and whether non-payment furnished a ground for winding up under the Companies Act, 1956.

Analysis: The respondent's own correspondence admitted arrears of Rs. 2,51,677 for royalty due up to 31 January 1985. A part payment was made, and the issuing of a cheque that was not honoured also supported the petitioner's claim. The subsequent arbitration concerning later periods did not displace the admitted pre-existing liability. The contention that the debt was bona fide disputed was not accepted, and the inability to pay the admitted debt justified recourse to winding up.

Conclusion: The respondent-company was held liable for the admitted arrears, and non-payment constituted a valid ground for winding up.

Final Conclusion: The winding-up petition succeeded, the company was ordered to be wound up, and the petitioning creditor obtained the substantive relief sought.

Ratio Decidendi: A winding-up petition is not liable to be rejected for a curable defect in verification where proper corporate authorisation is later produced, and an admitted debt not shown to be subject to a bona fide dispute may found a winding-up order for inability to pay debts.

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