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Petition for winding up of the company restricted to section 434(1)(c) of the Companies Act, 1956. Analysis: The petitioners filed a petition for winding up the company under section 434(1)(c) of the Companies Act, 1956. The court considered the requirements under this section, which necessitate demonstrating the company's inability to pay debts and accounting for contingent and prospective liabilities. The petitioners alleged commercial insolvency based on dishonored cheques issued by the company. However, the company denied these allegations and refuted being unable to pay debts or being commercially insolvent. The court emphasized that proving commercial insolvency is the petitioner's burden, requiring evidence of contingent and prospective liabilities. The court referenced a similar judgment from the High Court at Calcutta, highlighting the burden of proof on the petitioner to establish commercial insolvency. In this case, the petitioners failed to provide material to support the claim of commercial insolvency, leading to the rejection of the petition. The court addressed the petitioner's argument regarding the respondent's failure to produce balance sheets. The court noted that mere correspondence requesting balance sheets does not absolve the petitioners from presenting evidence of commercial insolvency. Without sufficient material on contingent and prospective liabilities, the court could not determine the company's commercial insolvency. Consequently, the court rejected the petition, emphasizing the importance of meeting the strict requirements in company winding-up cases. In conclusion, the court found no merit in the petition and dismissed it without costs. The judgment underscores the significance of substantiating claims of commercial insolvency with concrete evidence, particularly regarding contingent and prospective liabilities, as mandated by section 434(1)(c) of the Companies Act, 1956.
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