Winding-up on unpaid contractual dues where the company's defence was unsupported, implausible, and not bona fide.

In winding-up jurisdiction, a petition based on unpaid contractual dues was treated as timely where the claim arose from bills for work done and consultancy services, supported by the company's own record of last payment and tax deduction. The company's denial of liability failed because it was not backed by the contract, correspondence, accounts, or any material showing a lawful basis for liquidated damages or overpayment adjustments, and an adverse inference followed from the absence of supporting books. With a prima facie debt established, no bona fide defence shown, and non-payment persisting after notice, the company was treated as unable to pay its debts and the petition was admitted.

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Issues: (i) Whether the petition was barred by limitation; (ii) whether the respondent-company had a bona fide and plausible defence to the claimed liability, including the alleged adjustment of liquidated damages and alleged overpayment; (iii) whether the respondent-company was unable to pay its debts so as to justify admission of the winding-up petition.

Issue (i): Whether the petition was barred by limitation.

Analysis: The petition was founded on unpaid dues arising from bills raised for work done and consultancy services rendered, with the last payment and the deduction of tax at source reflected in the respondent-company's own record. On that basis, the claim was filed within time and could not be treated as stale or time-barred.

Conclusion: The plea of limitation was rejected against the respondent-company.

Issue (ii): Whether the respondent-company had a bona fide and plausible defence to the claimed liability, including the alleged adjustment of liquidated damages and alleged overpayment.

Analysis: The respondent-company admitted the contract and the execution of work, but its denial of liability was not supported by the contract terms, correspondence, original accounts, or any material showing a lawful basis for the debit of liquidated damages. The certificate issued by the respondent-company also acknowledged satisfactory execution and performance, and the absence of supporting books of account justified an adverse inference. The defence, therefore, lacked bona fides and plausibility.

Conclusion: The defence raised by the respondent-company was held to be not bona fide and not justifiable.

Issue (iii): Whether the respondent-company was unable to pay its debts so as to justify admission of the winding-up petition.

Analysis: The admitted work, the partial payments, the documentary acknowledgement of satisfactory performance, and the failure to discharge the balance despite notice established a subsisting liability. In the absence of a credible defence and in view of non-payment of dues, the respondent-company was treated as unable to pay its debts within the meaning of the winding-up jurisdiction.

Conclusion: The respondent-company was held unable to pay its debts and the petition was admitted.

Final Conclusion: The winding-up petition was admitted on the footing that the claimed debt was not shown to be disputed bona fide and the company had failed to satisfy the admitted liability.

Ratio Decidendi: In winding-up proceedings, where the debt is prima facie established and the company's defence is unsupported by material, not bona fide, and implausible, the court may infer inability to pay debts and admit the petition.

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