Winding-up for admitted debt follows unpaid statutory notice and presumption of inability to pay debts

A company may be wound up where an admitted debt remains unpaid after service of statutory notice under the Companies Act, 1956. The text states that the liability was founded on a settled debt for a specified sum with interest, supported by repeated demands and requests for time, and later expressly admitted by affidavit. Because the amount remained unpaid despite notice under section 433(e) read with section 434(1)(a), neglect to pay gave rise to the presumption of inability to pay debts. On that basis, the winding-up order was warranted.

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Issues: Whether the respondent-company was liable to be wound up for failure to pay an admitted debt after service of statutory notice under the Companies Act, 1956.

Analysis: The petition was founded on a settled liability for payment of a specified sum with interest, and the record showed repeated demands and requests for time by the company. The company's later affidavit expressly ed the liability, and the amount remained unpaid despite service of notice under section 433(e) read with section 434(1)(a) of the Companies Act, 1956. In such circumstances, neglect to pay after statutory notice gave rise to the presumption of inability to pay debts, and the company was liable to be wound up.

Conclusion: The issue was decided in favour of the petitioner and against the respondent-company; the winding-up order was warranted.

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