Winding up application admitted due to non-payment of goods. Quality disputes dismissed for lack of evidence.

The court admitted the winding up application due to the respondent's failure to pay the outstanding amount for goods sold, as evidenced by dishonored cheques. The respondent's claims of quality disputes and verbal negotiations were dismissed for lack of evidence. The court found the respondent's defenses lacking credibility and admitted the application, allowing the respondent to address the remaining claim through a separate suit upon providing a bank guarantee. The judgment emphasized the importance of substantiating claims and highlighted the lack of evidence in the respondent's defenses.

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Issues:
1. Unpaid price of goods sold and delivered.
2. Statutory notice reply presumption of insolvency.
3. Quality dispute regarding goods supplied.
4. Verbal negotiations defense.
5. Admission of liability by respondent.
6. Admittance of winding up application.

Analysis:

Unpaid price of goods sold and delivered:
The petitioning creditor claimed that the respondent owed Rs. 1,92,52,851 for Lam Coke sold and delivered between September and December. The respondent issued five cheques, but they were dishonored, leading to the winding up application.

Statutory notice reply presumption of insolvency:
The respondent claimed to have replied to the statutory notice under certificate of posting, but the court found no evidence of such reply. The court noted that failure to reply to a statutory notice implies insolvency, and the respondent's defense regarding the reply was not substantiated.

Quality dispute regarding goods supplied:
The respondent alleged a quality dispute, stating that the goods supplied were defective and caused damage to their equipment. However, the court found no supporting evidence such as an SGS report or contemporaneous documents to validate this claim.

Verbal negotiations defense:
The respondent argued that there were verbal negotiations asking the petitioning creditor not to negotiate the cheques, but the court did not find this defense credible. The court believed there was an unconditional admission of liability by the respondent when they tendered the cheques.

Admission of liability by respondent:
The court concluded that the respondent had no defense to the claim of Rs. 1,25,00,000 representing the value of the stopped payment cheques. The respondent's defenses were found lacking in evidence and credibility, leading to the admission of the winding up application.

Admittance of winding up application:
The court admitted the winding up application, finding that a significant amount was due and owing by the respondent to the petitioning creditor. The court allowed the respondent to file a suit for the remaining claim amount upon furnishing a bank guarantee within a specified timeline.

In conclusion, the court admitted the winding up application based on the prima facie finding of the due amount, while providing the respondent with an opportunity to address the remaining claim through a suit and bank guarantee. The judgment highlighted the lack of evidence supporting the respondent's defenses and the importance of substantiating claims in legal proceedings.

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