2007 (1) TMI 266 - HC - Companies Law

Winding up petition upheld due to acknowledged debt dispute, compliance with deposit required

The Court upheld the maintainability of the winding up petition against the appellant company for acknowledged debt, rejecting the appellant's dispute ... Winding up - Circumstances in which a company may be wound up Issues involved: The judgment involves issues related to the maintainability of a winding up petition based on acknowledged debt, dispute over liability, and the sufficiency of evidence in a running account.Maintainability of Winding Up Petition: The respondent filed a winding up petition against the appellant company for its inability to pay acknowledged dues. The Company Judge held the petition maintainable, directing the appellant to deposit a specified sum. The appellant challenged this order in the present appeal.Acknowledged Debt and Dispute over Liability: The appellant acknowledged an outstanding debt in a letter but later denied liability, claiming defective goods. The Company Judge rejected the appellant's argument that the petition was not maintainable due to a running account, emphasizing the acknowledgment of debt in the letter dated 11-1-1999.Sufficiency of Evidence in Running Account: The appellant argued that the winding up petition was based on a running account and should be resolved through a civil suit. The respondent relied on a judgment highlighting the acknowledgment of liability in the appellant's letter. The Court dismissed the appeal, emphasizing the acknowledgment of debt and directing compliance with the Company Court's orders.