Statutory Notice in Winding Up: failure to pay a prima facie admitted debt with no bona fide dispute permits admission.

Statutory notice under the Companies Act framework requires that a creditor may seek winding up where a company neglects or fails to pay a debt after service of the prescribed notice; a bona fide substantial dispute on existence or amount of the debt defeats such a petition. Here invoices and shipping documents were sent to the respondent, goods were released and used at invoiced prices, the respondent did not contemporaneously dispute prices, and after statutory notice raised alternative defenses only; the factual matrix showed a prima facie admitted debt with no credible bona fide dispute, so admission of the petition was appropriate.

---

---

Issues: Whether the respondent company neglected or failed to pay a debt to the petitioner despite service of the statutory notice and whether the petition for winding up should be admitted.

Analysis: The statutory framework under Section 433 and Section 434 of the Companies Act, 1956 requires that a creditor's petition may be entertained where a company neglects or fails to pay a debt after service of the prescribed notice. The court examined the communications and conduct of the parties: invoices and shipment documents were sent directly to the respondent, the respondent released and utilised the goods on the invoice prices, and the respondent did not raise any contemporaneous dispute about the invoiced prices but repeatedly delayed payment and, after service of statutory notice, asserted alternative bases for price reduction and reliance on RBI permission. Authorities require that a bona fide, substantial dispute on the existence of the debt will defeat a winding-up petition, but where a debt is prima facie admitted or not genuinely disputed and statutory notice has been ignored, admission is appropriate. The factual matrix shows an admitted or prima facie debt (including an admitted lesser amount) which remained unpaid despite statutory notice, and no credible bona fide dispute preventing summary admission.

Conclusion: The petition is admitted and the winding-up petition is allowed on the ground that the respondent neglected or failed to pay the debt despite service of the statutory notice.

---