Court affirms winding-up order for non-payment of debts, dismisses appeal despite obtained decree

The Court upheld the Company Judge's decision to order the winding up of the appellant-company due to non-payment of outstanding debts and failure to demonstrate the company's capability to discharge debts. Despite the appellant's arguments and obtaining a decree from the Council, the Court found no error in the Company Judge's ruling, noting the lack of dispute over bills and failure to provide a valid defense. The appeal was dismissed, affirming the winding-up order based on the appellant's prolonged failure to settle debts.

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Issues:
- Appellant's failure to pay outstanding amount to respondent
- Company petition filed under section 433(e) and (f) read with section 434 of the Companies Act, 1956
- Objections not filed on time leading to rejection by Company Judge
- Appellant's contention of error in not allowing to file statement of objections
- Appellant's argument of viability and capability to pay debts
- Decree obtained from Andhra Pradesh Industry Facilitation Council
- Applicability of principles of res judicata
- Company Judge's decision in ordering winding up of the appellant-company

Analysis:

The respondent filed a company petition under section 433(e) and (f) read with section 434 of the Companies Act, 1956, against the appellant for non-payment of outstanding amounts. The respondent alleged that the appellant failed to pay Rs. 13,76,333 for fabrication work done. The Company Judge allowed the petition after the appellant did not file objections on time, leading to rejection of late objections. The appellant contended that the Company Judge erred in not allowing the filing of objections and argued the company's capability to pay debts. The appellant also mentioned obtaining a decree from the Andhra Pradesh Industry Facilitation Council under the Industrial Undertakings Act, claiming the petition was not maintainable. However, the respondent argued that the decree obtained does not prevent filing a company petition for winding up if the company is unable to pay its debts.

The Court noted that the bills raised by the respondent were not disputed, and the appellant received the statutory notice but did not respond to indicate any dispute. The appellant failed to show viability in discharging debts or raise a valid defense. The Court observed that the decree obtained from the Council related to interest, not the actual debt, and did not prevent the respondent from filing a winding-up petition. The appellant was directed to deposit a sum, which was later withdrawn by the respondent. Considering the appellant's failure to discharge the decree even after several years, the Court found no error in the Company Judge's decision to wind up the appellant-company.

In conclusion, the Court dismissed the appeal, upholding the Company Judge's decision to order the winding up of the appellant-company based on the failure to pay outstanding debts and the lack of evidence regarding the company's capability to discharge debts.

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