Balance-sheet acknowledgment and secured-creditor status preserved winding-up maintainability despite notice objections and limitation plea.

Sufficient particulars in a statutory demand and winding-up petition are required, but an omission will not defeat maintainability where the debt was clearly admitted in the company's balance-sheets and no prejudice was shown. An admission of indebtedness in successive balance-sheets operates as acknowledgment for limitation purposes, keeping the claim within time. An injunction in a connected suit did not prevent the creditor from opposing a stay application or from proving inability to pay debts by other evidence. A secured creditor may also present a winding-up petition without first giving up security, as a secured creditor remains a creditor for that purpose.

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Issues: (i) whether alleged absence or inaccuracy of particulars in the statutory notice and winding-up petition invalidated the proceedings; (ii) whether entries in the company's balance-sheets constituted acknowledgment of debt so as to meet the plea of limitation; (iii) whether the injunction order obtained in the connected suit prevented the creditor from opposing the stay application and from proving inability to pay debts by other evidence; (iv) whether a secured creditor could maintain the winding-up petition without first giving up security.

Issue (i): whether alleged absence or inaccuracy of particulars in the statutory notice and winding-up petition invalidated the proceedings.

Analysis: The notice of demand and the petition for winding up must contain sufficient particulars of the indebtedness so that the company can meet the claim. Such omission can, in an appropriate case, affect maintainability. On the facts, however, the debt had been clearly and unequivocally admitted in the company's balance-sheets and the appellant showed no prejudice caused by any alleged deficiency in particulars or by the description of the debt as a running loan.

Conclusion: The objection failed and the winding-up petition remained maintainable.

Issue (ii): whether entries in the company's balance-sheets constituted acknowledgment of debt so as to meet the plea of limitation.

Analysis: An admission of indebtedness in a balance-sheet amounts to acknowledgment within the meaning of limitation law. The debt had been acknowledged in successive balance-sheets, including the balance-sheet for the year 1967, and there was no denial of such acknowledgment. That acknowledgment saved the claim from being time-barred.

Conclusion: The plea of limitation was rejected and the claim was held to be within time.

Issue (iii): whether the injunction order obtained in the connected suit prevented the creditor from opposing the stay application and from proving inability to pay debts by other evidence.

Analysis: The injunction restrained proceedings on the basis of the demands in the notice, but the present proceeding was the company's own application for stay of the winding-up petition. In any event, even where the statutory notice is ineffective, the creditor may establish inability to pay debts by evidence aliunde. The materials showed a prima facie indebtedness and there was no case that the company was able to pay or compound its debts.

Conclusion: The injunction did not bar the respondent from opposing the stay application or from proving inability to pay debts.

Issue (iv): whether a secured creditor could maintain the winding-up petition without first giving up security.

Analysis: The statutory scheme expressly permits any creditor to present a winding-up petition, and a secured creditor is deemed to be a creditor for that purpose. The existence of security does not defeat maintainability.

Conclusion: The winding-up petition was maintainable at the instance of the secured creditor.

Final Conclusion: The appellant's challenge to the refusal of permanent stay failed on all substantial grounds, and the winding-up proceedings were allowed to continue.

Ratio Decidendi: An acknowledgment of debt in duly signed balance-sheets constitutes acknowledgment for limitation purposes, and a secured creditor remains entitled to maintain a winding-up petition as a creditor under the Companies Act.

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