Court admits winding-up petition due to company's debt inability, defers orders for debt settlement.

The court admitted the winding-up petition, finding that the respondent company was unable to pay its debts. The court deferred further orders for one month to allow the respondent to settle the debt with interest. If payment was not made within this period, a provisional liquidator would be appointed.

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Issues Involved:
1. Service of Statutory Notice
2. Limitation Period for Debt Recovery
3. Acknowledgement of Debt and Part Payments
4. Bona Fide Dispute and Defense by Respondent
5. Admission and Payment of Debt
6. Appointment of Provisional Liquidator

Issue-wise Detailed Analysis:

1. Service of Statutory Notice:
The respondent contended that the statutory notice dated 2-9-2002 was not served at their registered office. However, the court found that the notice was sent by speed post and returned with an endorsement of refusal. The petitioner also sent copies to the directors, and the registered AD cards confirmed receipt. The court rejected the respondent's plea, concluding that the statutory notice was properly served and the respondent failed to rebut this.

2. Limitation Period for Debt Recovery:
The respondent argued that the claim was barred by limitation as the last transaction occurred in 1997. The court noted that the respondent acknowledged the debt on multiple occasions, including a letter dated 19-5-1997 and minutes of a meeting on 9-10-1998. These acknowledgements extended the limitation period under Section 18 of the Limitation Act, 1963. The court held that the part payments made by the respondent further extended the limitation period.

3. Acknowledgement of Debt and Part Payments:
The court examined several acknowledgements by the respondent, including letters and minutes of meetings, which admitted the debt. The respondent's part payments from November 1998 to 21-3-2000 were also considered acknowledgements, extending the limitation period. The court cited previous judgments to support that part payments and acknowledgements in writing reset the limitation period.

4. Bona Fide Dispute and Defense by Respondent:
The respondent claimed that Rs. 75 lakh was paid, but failed to provide evidence. The court found that the respondent did not substantiate their claims of payment despite opportunities to file affidavits and documents. The court concluded that the disputes raised by the respondent were not bona fide and the defense was not substantial or likely to succeed.

5. Admission and Payment of Debt:
The respondent admitted a debt of Rs. 2,18,93,858 as of 31-3-1997 but failed to prove the alleged payment of Rs. 75 lakh. The court noted that the respondent did not produce any documents to show subsequent payments. The court inferred that the admitted debt remained unpaid and the respondent was unable to pay its debts.

6. Appointment of Provisional Liquidator:
The court determined that the respondent was unable to pay its debt, which amounted to Rs. 2,32,56,914.32, including principal and interest. The court deferred the appointment of a provisional liquidator for one month, giving the respondent a final opportunity to make the payment with interest. If the payment was not made within this period, the Official Liquidator would be appointed, and citations would be issued.

Conclusion:
The court admitted the winding-up petition, concluding that the respondent company was unable to pay its debts. The court deferred further orders for one month to allow the respondent to settle the debt with interest, failing which a provisional liquidator would be appointed.

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