Inability to Pay: winding up refused where debt and intervening payment were materially disputed; petitioner may pursue remedies.

Whether the respondent company is unable to pay its debts for winding up under Sections 433 and 434 depended on a material dispute over the existence and quantum of the debt and evidence of an intervening payment; the court applied the principle that where debt liability or amount is materially disputed and there is evidence of payment, winding up for inability to pay will not be ordered. Outcome: petition for winding up dismissed; no conclusive finding of inability to pay and petitioner may pursue ordinary recovery proceedings for disputed sums.

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Issues: Whether the respondent company is unable to pay its debts and liable to be wound up and an official liquidator appointed under Sections 433 and 434 of the Companies Act.

Analysis: The petition relies on asserted unpaid dues, returned cheques and a statutory demand. There is evidence of subsequent payment by cheque dated 15.7.2012 and a dispute as to whether the remaining claimed amount represents principal liability or merely interest. The factual dispute over receipt and accounting of the cheque and the nature of the claimed balance prevents a conclusive finding of inability to pay. Further, any disputed monetary liability arising from dishonoured cheques or counterclaims is a matter for appropriate proceedings and recovery in accordance with law.

Conclusion: Petition seeking winding up is dismissed; no conclusive finding of inability to pay is recorded and petitioner is left free to pursue available remedies in law.

Ratio Decidendi: Where the existence or quantum of debt is materially disputed and there is evidence of intervening payment, a court will not order winding up for inability to pay but will leave the parties to pursue appropriate remedies for determination and recovery of the disputed sums.

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