Winding-up jurisdiction survives arbitration clauses where an admitted debt remains unpaid after statutory notice and insolvency is presumed.

A change in shareholding or management did not justify recall of the admission order because the company remained a separate juristic entity and had notice of the winding-up proceedings but chose not to appear. The presence of an arbitration clause did not oust the company court's statutory jurisdiction under the Companies Act, 1956, since winding-up relief is distinct from contractual arbitration and cannot be granted by an arbitrator. Once an admitted debt remained unpaid after statutory notice, the presumption of inability to pay debts under section 434(1)(a) continued; commercial solvency and an unproven dispute over quantum were insufficient to displace it.

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Issues: (i) Whether the earlier order admitting the company petition could be recalled on the ground of change in management and non-appearance; (ii) whether the existence of an arbitration clause required the winding up petition to be dismissed and relegated to arbitration; (iii) whether commercial solvency and a disputed quantum by themselves displaced the statutory presumption of inability to pay debts.

Issue (i): Whether the earlier order admitting the company petition could be recalled on the ground of change in management and non-appearance.

Analysis: The respondent-company remained a separate juristic entity notwithstanding a change in shareholding or management. The record showed that the respondent had been informed of the winding up proceedings, yet chose not to appear. Recall of an order is justified only where the court acted under a mistaken assumption causing injustice; that situation was not made out.

Conclusion: The request to recall the admission order was rejected.

Issue (ii): Whether the existence of an arbitration clause required the winding up petition to be dismissed and relegated to arbitration.

Analysis: Proceedings for winding up under sections 433, 434 and 439 of the Companies Act, 1956 are distinct from contractual arbitration. An arbitrator cannot exercise the statutory jurisdiction to order winding up, and the mere presence of an arbitration clause does not oust the company court's power to entertain a winding up petition.

Conclusion: The arbitration clause did not bar the winding up proceedings.

Issue (iii): Whether commercial solvency and a disputed quantum by themselves displaced the statutory presumption of inability to pay debts.

Analysis: Once the conditions under section 434(1)(a) were satisfied and the admitted debt remained unpaid after statutory notice, the company was deemed unable to pay its debts. Commercial solvency was not a stand-alone answer, and the existence of a bona fide dispute was not established on the material before the court.

Conclusion: The statutory presumption of inability to pay debts remained undisturbed.

Final Conclusion: The company petition was not interfered with, and the applications seeking recall of the admission order and dismissal of the winding up proceedings were both rejected.

Ratio Decidendi: A company court's winding up jurisdiction under sections 433 and 434 of the Companies Act, 1956 is not displaced by an arbitration clause, and upon non-payment of an admitted statutory debt after notice, the company is deemed unable to pay its debts.

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