Commercial insolvency and admitted liabilities justified winding up admission, with interim protection and lender intervention allowed.

A winding up petition may be admitted where the company has repeatedly acknowledged liabilities, including statutory dues and wage arrears, and the record shows no realistic prospect of revival. The Court treated the respondent as commercially insolvent because promoters declined further funding, the lenders would not extend additional support, and the proposed investor exited after the commercial premise failed. On that basis, the petitions were admitted with interim protection to preserve creditor interests and company assets. The lenders' intervention was also allowed because their participation was relevant to the restructuring exercise and the respondent's overall financial position.

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Issues: (i) Whether the company petitions for winding up should be admitted on the ground that the respondent was unable to pay its debts and had admitted liability. (ii) Whether the intervention application filed by the lenders should be allowed.

Issue (i): Whether the company petitions for winding up should be admitted on the ground that the respondent was unable to pay its debts and had admitted liability.

Analysis: The respondent had repeatedly acknowledged its liabilities, not only to the petitioning creditors but also to several other lenders and creditors. The record showed mounting liabilities, substantial statutory dues and wage arrears, and no realistic prospect of revival. The promoters declined to infuse further funds, the intervening lenders also stated that no further funding would be made available, and the proposed investor exited after the underlying commercial premise failed. In these circumstances, the Court treated the respondent as commercially insolvent and held that the winding up petitions disclosed a case for admission and protective interim measures.

Conclusion: The winding up petitions were admitted and interim protection was granted in favour of the petitioners.

Issue (ii): Whether the intervention application filed by the lenders should be allowed.

Analysis: The applicants were part of the joint lenders' forum and had participated in the restructuring exercise. Their presence was relevant to the consideration of the revival efforts and the overall financial position of the respondent. The Court therefore allowed their participation in the proceedings.

Conclusion: The intervention application was allowed.

Final Conclusion: The Court found no viable revival route for the respondent and directed admission of the winding up petitions with consequential interim protection, while permitting the lenders to intervene in the proceedings.

Ratio Decidendi: Where a company has admitted liabilities, revival efforts have failed, and no further funding is forthcoming, the Court may admit a winding up petition to protect the interests of creditors and preserve the company's assets.

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