Winding-up order set aside where deposit of admitted debt showed ability to pay and ex parte process was unjustified.

An ex parte winding-up order was set aside because the company had shown an ability to pay the admitted debt. The court treated the deposit of the principal sum within the time directed as evidence of solvency, and noted that winding-up relief is justified only where inability to pay debts is shown. The earlier order had also been passed without hearing the company, which supported reopening the matter. The company application was therefore allowed with costs.

---

---

Issues: Whether the ex parte winding-up order deserved to be set aside on the ground that the company had shown its ability to pay the admitted debt.

Analysis: The application was founded on the circumstance that the impugned order had been passed without hearing the company and that the company had deposited the principal sum of Rs. 1,50,000 within the time directed by the Court. In winding-up proceedings, admission is justified only when the company is shown to be unable to pay its debts. The deposit made in compliance with the interim direction was treated as evidence that the company was in a position to pay its debts, and the ex parte nature of the earlier order was also taken into account.

Conclusion: The ex parte order was set aside and the company application was allowed with costs.

---