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Issues involved: Appeal against winding up petition due to financial crisis and inability to present feasible revival proposal.
Judgment Details: The appellant company, engaged in textile manufacturing, faced a winding-up petition due to financial crisis and inability to pay debts. The company ceased functioning, leading to a loss of Rs. 580 lakhs in 1983-84. Despite efforts to secure finances, the main bank restrained withdrawals, causing a halt in operations. The workmen were not paid wages since May 1984, exacerbating the situation. The company failed to present a viable revival scheme, leading to the winding-up petition by creditors alleging insolvency. The single judge allowed time for the company to seek financial assistance but eventually ordered winding up. The company's plea for further adjournment was denied due to the lack of progress in securing funds for revival. The creditors argued that the company was unable to pay debts, justifying winding up. The court considered the inability to pay debts but emphasized the need for a reasonable prospect of revival before deciding on winding up. Despite granting ample time, the court found no reasonable prospect of the company resuming normal operations. Efforts to secure financing, including from the State Government, were unsuccessful. The lack of progress in paying workmen's wages and addressing creditors' concerns indicated a bleak outlook for revival. Prolonging proceedings would only increase liabilities without improving the situation, leading to further loss for creditors and workmen. The appellant's plea for a speaking order was dismissed, as the circumstances were deemed self-evident. The court upheld the single judge's winding-up order, citing the lack of a feasible revival plan and ongoing financial difficulties. The appeal was dismissed with costs, affirming the winding up of the company.
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