Winding-up for admitted debt upheld where statutory notice went unanswered and no bona fide defence was shown.

A company may be wound up for inability to pay its debts where the debt is admitted or otherwise sufficiently established, the statutory notice is not effectively answered, and no bona fide defence is shown. Here, the court found the respondent's liability supported by a cheque, part-payment, and a later confirmation of account acknowledging the outstanding amount, while the allegations of defective or undelivered goods lacked credible documentary support. The objection based on pending BIFR proceedings was also unsupported. On that material, the defence was treated as an afterthought and the debt as admitted and unpaid, justifying a winding-up order for commercial insolvency.

---

---

Issues: Whether the respondent company was indebted to the petitioner and liable to be wound up for inability to pay its debts and commercial insolvency.

Analysis: The company did not effectively rebut the statutory notice or the petitioner's claim. The record showed issuance of a cheque, part-payment, a subsequent confirmation of account acknowledging the outstanding amount, and no credible documentary support for the asserted defence that the goods were defective or never supplied. The objection based on pending BIFR proceedings was unsupported. On the material before it, the Court found the company's defence to be an afterthought and held that the debt was admitted and remained unpaid.

Conclusion: The company was held liable to be wound up under the Companies Act, 1956 for inability to discharge its admitted debts and commercial insolvency.

Ratio Decidendi: Where the debt is admitted or sufficiently established, the statutory notice is not effectively answered, and the company fails to show a bona fide defence, the Court may infer inability to pay and order winding up.

---