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Issues involved:
Admission of company petition u/s 433 of the Companies Act, 1956 based on limitation defense. Summary: Issue 1: Limitation Defense The appeal challenged the order admitting the company petition u/s 433 of the Companies Act, 1956, based on the defense of limitation. The appellant-company received supplies from the respondent-company in August 1992 but failed to respond to legal notices served in 1995 and 1996. The appellant argued that the claim was barred by limitation, thus no existing debt existed. However, the submission of sales-tax declaration forms by the appellant in March 1995 acknowledged the jural relationship between the parties, as per the Supreme Court's ruling in S.F. Mazda v. Durga Prosad AIR 1961 SC 1236. The court held that the plea of limitation could not be sustained based on these facts. Issue 2: Balance Confirmation Letters The petitioning-creditor presented balance confirmation letters for the years 1993, 1994, and 1995, certified by the appellant-company, as evidence that the claim was not barred by limitation. The appellant argued that the Office Manager who signed these letters was not authorized to do so. However, the Office Manager was authorized by the company for certain matters, indicating his responsibility to acknowledge liabilities on behalf of the company. The court found no merit in the limitation defense based on these facts. Issue 3: Bona Fide Defense The appellant relied on a previous court decision stating that a bona fide dispute could prevent winding up proceedings. However, in this case, the appellant failed to respond to notices and provide a valid explanation. The court emphasized that a limitation defense must be bona fide and not illusory. As the facts did not support a genuine defense, the appeal was dismissed. In conclusion, the High Court of Andhra Pradesh dismissed the appeal against the admission of the company petition under section 433 of the Companies Act, 1956, as the limitation defense was not found to be valid.
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