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Issues:
- Petition for winding up of a company under sections 433, 434, and 439 of the Companies Act, 1956. - Failure of the respondent-company to repay debts leading to the winding-up order. - Legal proceedings and objections raised by the respondent-company. Analysis: The judgment pertains to a petition filed by Punjab National Bank in 1983 against a company seeking winding up under the Companies Act, 1956. The bank had provided various credit facilities to the company, which failed to repay the due amounts, leading to the petition. The respondent-company, through its managing director, had requested credit facilities from the bank, which were granted. However, the company defaulted on payments, leading to the petition for winding up based on the company's inability to pay its debts. The court noted that the respondent-company failed to adhere to the payment agreement reached earlier, leading to the revival of the petition. Despite the passage of over a decade, the debt owed had increased significantly. The respondent-company did not participate in the legal proceedings, and when a civil suit was filed by the bank, the company did not appear in court. The court highlighted the company's conduct, indicating a deliberate attempt to avoid payment. The petitioner's counsel argued that the respondent-company's liability was proven, demonstrating an inability to pay debts. The respondent's counsel raised technical objections, including being a secured creditor and concerns for shareholders, creditors, and employees. However, the court emphasized that the primary consideration in a winding-up petition is the company's debt repayment ability, not the interests of shareholders or employees. After considering the arguments and facts presented, the court found the respondent-company unable to pay its debts and ordered its winding up. The official liquidator was appointed to take control of the company's assets, and the petitioner was directed to advertise the winding-up order as per legal requirements. The judgment concluded by specifying the actions to be taken for the winding-up process in accordance with the law. In conclusion, the judgment highlights the legal process leading to the winding up of a company due to its failure to repay debts, despite various opportunities and legal proceedings. The court's decision was based on the company's proven inability to settle its liabilities, leading to the appointment of an official liquidator and commencement of the winding-up process as per legal provisions.
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