Winding-up petition on inability to pay debts resolved through sale of apartment and priority distribution of proceeds.

A company petition for winding up on inability to pay debts was considered against substantial payments already made and ongoing SARFAESI action by the secured creditor. The Court treated the remaining liability as capable of practical resolution rather than immediate winding up, and directed sale of the apartment to a third party. Sale proceeds were to be applied first towards the bank's dues and then towards the petitioner's dues with interest, protecting the interests of the company, the creditor, and the secured lender.

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Issues: Whether the company petition seeking winding up on the ground of inability to pay debts was maintainable and whether the dispute could be resolved by directions for payment and sale of the flat.

Analysis: The respondent showed that substantial payments had already been made and that the remaining liability could be worked out and discharged through a practical arrangement. The Court also took note of the bank's proceedings under the SARFAESI regime and the fact that the flat had already been subjected to action by the secured creditor. In these circumstances, the Court found it appropriate to avoid a bare dismissal and instead secure the interests of the petitioner, the respondent, and the bank by directing the respondent to enable sale of the apartment to a third party, with the sale proceeds to be applied first towards the bank's dues and the balance towards the petitioner's dues with interest.

Conclusion: The petition was disposed of with directions for sale of the apartment and distribution of sale proceeds towards the bank and the petitioner.

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