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Issues involved:
Interpretation of a writing as a promise to pay within the meaning of section 25(3) of the Contract Act, 1872; acknowledgment of debt vs. promise to discharge debt; authority of the accountant to confirm accounts on behalf of the company. Analysis: The judgment revolves around the interpretation of a letter sent by the petitioner to the company, requesting confirmation of a debt owed. The company's defense against a winding-up petition was based on the contention that the writing and endorsement on the letter did not constitute a promise to pay under section 25(3) of the Contract Act, 1872, and that the accountant who confirmed the debt had no authority to do so. The company argued that the word "payable" in the endorsement did not imply a promise to discharge the debt, but merely acknowledged it. The court delved into legal precedents to determine the significance of the word "payable" in such contexts. Referring to past judgments, the court highlighted that a mere acknowledgment of debt could also amount to a promise to pay under section 25(3) of the Contract Act, 1872. In a similar case cited, a confirmation of accounts was deemed a promise to pay, emphasizing the importance of the language used in such communications. In the present case, the court noted that the company's accountant had confirmed a lower amount than claimed by the petitioner, indicating a conscious admission of the debt and an implicit promise to pay the confirmed sum. The court dismissed the company's argument regarding the accountant's authority, stating that it is customary for accountants to confirm accounts on behalf of companies. The court emphasized that any issues regarding the accountant's actions should be addressed separately by the company without prejudicing the petitioner. Ultimately, the court found the company's defense to be unsubstantiated, and admitted the winding-up petition for the principal sum confirmed by the accountant. The court ordered the company to pay the amount with interest within a specified period to avoid further legal action. The judgment highlighted the importance of clear communication in financial dealings and upheld the legal principles governing promises to pay debts. This detailed analysis of the judgment showcases the court's thorough examination of the legal issues involved and the application of relevant legal principles to reach a decision in the matter.
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