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Issues: (i) whether the respondent company's admitted and unpaid debt, coupled with failure to show any bona fide dispute or repayment proposal, justified winding up for inability to pay debts; (ii) whether the closure of business and absence of any viable prospect of revival established loss of substratum and justified winding up on the just and equitable ground.
Issue (i): whether the respondent company's admitted and unpaid debt, coupled with failure to show any bona fide dispute or repayment proposal, justified winding up for inability to pay debts.
Analysis: The petition was founded on a substantial admitted liability, supported by documents and demand under the statutory notice provision. The record disclosed no credible dispute to the debt and no material showing that the respondent had any realistic means or proposal to discharge it. The accumulation of large outstanding liabilities, including claims from other creditors, reinforced the conclusion that the company could not meet its obligations as they fell due.
Conclusion: The issue was decided in favour of the petitioner, and the ground of inability to pay debts was made out.
Issue (ii): whether the closure of business and absence of any viable prospect of revival established loss of substratum and justified winding up on the just and equitable ground.
Analysis: The company had stopped business activity, and there was no indication of any profitable future operation or viable revival plan. Where liabilities had overtaken assets and the commercial basis of the undertaking had disappeared, the factual substratum of the company was treated as gone. On those facts, continuation of the company served no useful purpose.
Conclusion: The issue was decided in favour of the petitioner, and winding up on the just and equitable ground was warranted.
Final Conclusion: The company was directed to be wound up, and the Official Liquidator was authorised to take custody of the company's assets for further proceedings.
Ratio Decidendi: A company may be ordered to be wound up when an admitted debt remains unpaid, no bona fide dispute or workable repayment proposal is shown, and the company's business has closed so that its substratum has disappeared and it is commercially insolvent.
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