Inability to Pay Debts: Winding-up petition rejected where debt is bona fide disputed and requires trial rather than summary relief.

Winding-up petitions under Section 433 are not maintainable where the alleged debt is bona fide disputed and the defence is substantial, because the phrase 'unable to pay its debts' is applied commercially and winding up must not be used as a device for debt recovery; accordingly, a petitioner relying on unadmitted ledger entries and contested professional-fee claims has not shown inability to pay or erosion of the company's substratum. The dispute over liability requires evidence and trial, and absent material showing no reasonable prospect of continuing as a going concern, just and equitable grounds for winding up are not established.

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Issues: Whether a company petition seeking winding up of the respondent-company under Section 433(e) and (f) read with Sections 434 and 439 of the Companies Act, 2013 is maintainable on the ground of alleged unpaid professional fees and related claims, and whether the petitioner has established inability to pay debts or just and equitable grounds for winding up.

Analysis: Applicable principles require that a winding up petition under Section 433 should not be granted where the company bonafidely disputes the debt and the defence is substantial and likely to succeed; the expression "unable to pay its debts" is to be interpreted in a commercial sense and winding up must not be used as a device to recover disputed debts. The petitioner relied on alleged ledger entries and claimed unpaid professional fees, charges for use of equipment and related sums totalling Rs. 89,94,918/-. The respondent denied liability and disputed the claims, asserting the accounts and ledger are not admitted documents. There is no undisputed or admitted documentary proof of liability on record and the dispute requires evidence and trial to establish the debt. There is also no sufficient material to infer that the company's substratum has eroded or that it has no reasonable prospect of continuing as a going concern.

Conclusion: The petition for winding up is not maintainable; the petitioner has not established inability to pay debts or just and equitable grounds for winding up. The claim is bonafidely disputed and requires adjudication in civil proceedings; therefore the petition is dismissed in favour of the respondent.

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