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Issues:
Winding up petition under section 433 of the Companies Act, 1956 based on non-payment of instalments for a leased vehicle. Analysis: The petitioner, a finance company, filed a winding-up petition against the respondent company for non-payment of instalments for a leased vehicle. The agreement between the parties stated that the respondent would pay the price of the vehicle in eight instalments, of which five were paid. However, after an accident, the vehicle was sent for repairs and remained there. The petitioner issued a statutory notice for arrears, but the respondent disputed the claim, citing a settlement where they agreed to give up the paid instalments and the petitioner would take the vehicle upon payment of repair charges. The respondent contended that no amount was owed due to this settlement, leading to a dispute over the debt. The court considered whether there was a bona fide dispute about the debt. The respondent provided a letter to the Police Inspector outlining the settlement and negotiations between the parties, which was not refuted by the petitioner. The court noted the absence of any prior payment demand or police involvement by the petitioner, casting doubt on their denial of the settlement. Additionally, a notice from Cargo Motors Ltd. was produced by the petitioner, but the court deemed it suspicious as it was issued two years after the petition and lacked credibility. The court concluded that the respondent's consistent stance, coupled with the petitioner's questionable actions, supported the dispute over the debt, leading to the rejection of the winding-up petition. The court emphasized that its observations were solely for deciding the petition and not final. The judgment was made to determine whether the respondent's defense against the debt was prima facie honest and reasonable, ultimately rejecting the winding-up petition.
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