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Issues:
Winding up petition based on unpaid debt acknowledgment in balance sheet, defense of limitation period, acknowledgment of liability in balance sheet, statutory notice of demand reply. Analysis: 1. The petition sought winding up of a company due to unpaid debt acknowledged in the balance sheets from 1958 to 1968, totaling a claim of Rs. 2,67,492.72. The company raised a defense of limitation, arguing that the petition was time-barred. The court examined whether the balance sheet acknowledgment constituted a valid acknowledgment under the Limitation Act, citing precedents like Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff. The court analyzed the entries in the balance sheet, including a statement by the directors, to determine if they collectively amounted to an acknowledgment of liability as required under the law. 2. The court emphasized the need to interpret the balance sheet and directors' report together to ascertain the true meaning of the statements. It referenced the Supreme Court ruling in L. C. Mills v. Aluminium Corpn of India Ltd., stating that an acknowledgment must relate to a subsisting liability and be made within the prescribed period. The court considered the language used in the directors' report and concluded that the defense of lack of acknowledgment in the balance sheet was not unreasonable or mala fide, even if the statement in the directors' report might not be accurate. The court highlighted the importance of examining the intention behind the acknowledgment in the context of the entire document. 3. Another issue raised was the statutory notice of demand sent by the petitioner, which the company claimed to have replied to, contrary to the petitioner's assertion. Citing the Division Bench judgment in Japan Cotton Trading Co. v. Jajodia Mills, the court noted the dispute regarding the reply to the statutory notice. Despite the statutory presumption favoring the petitioner, the court found that the dispute over the reply did not render the defense unreasonable or mala fide. 4. Ultimately, the court dismissed the winding up petition, stating that the petitioner should seek other remedies for enforcing the claim. The court held that the defense of limitation and the dispute over the statutory notice reply were not unreasonable or mala fide, leading to the rejection of the petition. The court's decision did not award costs to either party but allowed the petitioner to pursue alternative legal actions to recover the debt. This detailed analysis of the judgment provides insight into the court's reasoning and application of legal principles in deciding the issues raised in the winding up petition.
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