Usha Mehra ( 1 ) M/s. Mayar Traders Ltd, by this applicationhas sought the winding up of M/s. Akhil Service Ltd. on the ground that thesaid Company is unable to pay its debts. M/s. Akhil Services Ltd. respondent herein, placed order on the petitioner company for the printing oflottery tickets for its various draws namely Jeewan Shakti. Jeewan Mothijeewanshree,jeewansagar,jeewan Akshay, Jeewen Jyothi and Jeewandhara. The agreement was arrived at between the parties, the terms ofwhich are contained in petitioner s letter dated 15. 1. 91. Pursuance to thatagreement, the petitioner was to print the tickets of the first four lotteriesfrom the third draw onwards and those of the last three lotteries from thefourth draw onwards. These tickets were to be despatched by the petitionerto the respondent. Petitioner raised bill with regard to the lottery ticketsprinted by the petitioner for the respondent. Some payments were madeby the respondent but an amount of Rs. 1,72,000. 00 was still due and outstanding against the respondent. Respondent raised objections regardingthe delivery of ticket, schedule followed by the petitioner and hence lodgedprotest regarding payments. However, after discussion a settlement wasarrived at pursuance to which the respondent agreed to pay to the petitionera sum of Rs. 1,02,721. 03p i. e. after making certain adjustments. This wasso communicated by the respondent to the petitioner vide letter dated29. 1. 92. This admitted amount has not been paid inspite of the repeatedreminders issued by the petitioner. Ultimately the petitioner issued astatutory notice on 20. 4. 92. In response to this notice, the respondent raiseda counter claim to the tune of Rs. 1. 35/780. 00 which according to the petitioner is after thought and not bonofide. ( 2 ). On application being filed a show cause notice was issued to therespondent in response to which a reply has been filed raising a dispute thatneither any amount is payable nor due. On the contrary according to therespondent the petitioner committed breach by not supplying the lotterytickets as per the terms of the agreement dated 15. 1. 91. According to thisagreement the delivery period was 21 days prior to the date of the draw ofthe lottery. This schedule was not adhered hence the respondent sufferedloss and damages. Hence the respondent claimed a sum of Rs. 1. 35. 780. 00on account of damages as mentioned in its letter dated 4/05/1992. Asregards letter dated 29. 1. 92. it was procured by the petitioner. This schedule was not adhered hence the respondent sufferedloss and damages. Hence the respondent claimed a sum of Rs. 1. 35. 780. 00on account of damages as mentioned in its letter dated 4/05/1992. Asregards letter dated 29. 1. 92. it was procured by the petitioner. The saidletter cannot amount to acknowledgement of liability. It was issued by aperson without jurisdiction. The tickets were received from 1 to 5 days before the date of draw, some of the tickets were from 6 to 10 days before thedate of draw, others were received from 11 to13-days before the date of drawand then 14 to 21 days before the date of draw. This delay in delivery led tothe loss in the business of the respondent. ( 3 ). In rejoinder the petitioner took the plea that the time was notthe essence of the contract nor it was agreed that in case the tickets werenot supplied within 21 days. the respondent would claim damages orreserved the right to reject the supply of the lottery tickets. In fact afterdiscussion a settlement was arrived at thereby the respondent admittedthe liability to pay to the petitioner a sum of Rs. 1,02. 721. 03 P. Afterthis settlement there remains nothing for the respondent to raise anydispute. ( 4 ). I have heard Mr. S. K. Kaul, Counsel for the petitioner and Mr. Jayant Nath, Counsel for the respondent and have perused the documentsplaced on record. Admittedly as per the letter dated 15. 1. 91. the deliveryof the lottery tickets was to be made 21 days from the date of 5th draw onwards and delivery of 3rd and 4th draw were as agreed. The reading of thisletter does not indicate as to what would have happened if the deliveryschedule was not adhered. Be that as it may, the respondent vide Annexure-R1 letter dated 15. 3. 91. Annexure-R 2 letter dated 25. 3. 91 and Ann -exure-R3 letter dated 25. 4. 91 did intimate to the petitioner that there wasdelay in the supply of lottery tickets on account of which respondent willsuffer losses. It is also a fact that vide these letters the respondent pointedout to the petitioner that lottery tickets should be despatched in time and asper the delivery period mentioned in the agreement. All these letters areof the year 1991. Similarly the letter written by the petitioner making ademand of Rs. 1,75,000. 00is dated 4/06/1991. It is also a fact that vide these letters the respondent pointedout to the petitioner that lottery tickets should be despatched in time and asper the delivery period mentioned in the agreement. All these letters areof the year 1991. Similarly the letter written by the petitioner making ademand of Rs. 1,75,000. 00is dated 4/06/1991. Thereafter, it appears,discussion took place pursuance to which the Manager (Operation) of therespondent company vide letter dated 29. 1. 1992 intimated to the petitionera sum of Rs. 1,02,721. 03p. The question that arises for consideration is ; inview of this letter thereby settling the dispute between the parties does it lienow for the respondent to raise any dispute on the same account. Admittedly the complaint of the respondent that the lottery tickets were notsupplied in time or as per the schedule or the delivery period, were of theyear 1991, whereas this settlement after discussion was arrived at in Jan. ,1992. Therefore, this letter assumes importance for the determination of thispetition. ( 5 ). Mr. Jayant Nath, appearing for the respondent contended thatthis letter can at best be treated as an acknowledgement of debt. But mereacknowledgement would not fasten any liability on the respondent, nor doesit operate as a new contract nor it can be made basis for the filing of this winding up petition. In order to strengthen his arguments he placed relianceon the decision of the Rajasthan High Court in the case of Hasti Mal andanother v. Shanker Dan and Others, reported in AIR 1952, Rajasthan, page 7,where it was held that a mere acknowledgement of debt does not operate asa new contract and cannot be made basis Of the suit. It only keeps alive theoriginal cause of action but the suit must be founded on the original causeof action. There is no quarrel with the propostion of law laid down in thiscase, but the facts of that case are distinguishable. In the case in hand therespondent has not only acknowledged the liability, but settled the billsfinally after discussion and admitted the amount due and payable to the tuneof Rs. 1,02,721. 03p. Therefore, as per Section 433 (e) of the. Companiesact, the amount due and payable in this case comes to Rs. 1. 02,721. 03p. This is the present liability of the respondent. It is not a mere acknowledgement of the debt. It is infact the admission of the liability after discussion. 1,02,721. 03p. Therefore, as per Section 433 (e) of the. Companiesact, the amount due and payable in this case comes to Rs. 1. 02,721. 03p. This is the present liability of the respondent. It is not a mere acknowledgement of the debt. It is infact the admission of the liability after discussion. The bill raised be the petitioner were to the tune of Rs. 1. 75 lacs whereasthe respondent settled the dues to Rs. 1,22,160. 00 out of which further deductions were made on account of cost of sheets of printing papers and flappapers lying with the petitioner, thereby reducing the amount to Rs. 1,02. 721. 03. For the petitioner to invoke the provision of Section 433, itwas to prove that a debt exists and secondly the company is unable to payit. In this case the petitioner by his own admission made in the letter dated29. 1. 92, has established the debt due and payable to Rs. 1. 02. 721. 03p andthe same has not been paid by the respondent inspite of statutory notice. When once the company admits that it owes an amount, it is for the company to establish that the liability has been discharged. In this regardreference can be had to the decision of Kerala High Court in the case ofm. V. Paulose v. City Hospital, (1992) 73 Company Cases, rage 362. ( 6 ) , The contention of Counsel for the respondent that letter dated29. 1. 92 was procured has not been prima facie proved on record nor anyletter of resignation of Mr. R. N. Bhagat has been placed on record. On thecontrary on behalf of respondent Annexure-R1, R2 and R3 were all writtenby Mr. R. N. Bhagat. Manager (Operation ). This shows that Mr. Bhagatwas competent to settle the amount due to the petitioner en behalf of therespondent Company. If he had resigned and left the company by or before 29. 1. 92 then his resignation ought to have been placed on record. Butno such resignation or any document proving that on 29. 1. 92 Mr. Bhagatwas not in the service of the respondent Company has been placed onrecord. Therefor, it cannot be said that the letter dated 29. 1. 92 was issuedby an unauthorised person. Mr. Nath, placed reliance on the decision ofthe Bombay High Court in the case of British India General Insurance Co. 1. 92 Mr. Bhagatwas not in the service of the respondent Company has been placed onrecord. Therefor, it cannot be said that the letter dated 29. 1. 92 was issuedby an unauthorised person. Mr. Nath, placed reliance on the decision ofthe Bombay High Court in the case of British India General Insurance Co. Ltd. , reported in A. IR 1971 Bombay Page 102, where it has been held thatif the Company denies its liability on a substantial ground then it cannot be said that the company has neglected to pay debts. But the question stillremains as to whether any substantial ground or defence has been raised bythe respondent Company ? In fact no bonafide dispute exists about in viewof its letter dated 29. 1. 92 in which respondent admitted the debt due. Regarding this letter there is no explanation except that the same was procured. This can neither be called substantial defence nor a bonafide dispute. Mere denial of liability is no defence what to talk of banafide defence. Therefore, the ratio of the Bombay High Court decision has no applicabilityto the facts of this case. Counsel for the respondent than placed reliance on the decision of Calcutta High Court in the case of J. N. Roy Chowdhury (Traders) Pvt. Ltd. v. Jainti Enterprises, reported in (1987) Vol. 61 Company Cases page 504. In that case on the facts disclosed Court came to the conclusion that the dispute was bonafide and hence winding up order was not passed. But in the case in hand in view of the acknowledgement of debtvide letter dated 29. 1. 92 it cannot be said that any substantial or bonafidedispute has been raised by the respondent Company by merely denying nowits liability. Mr. Jay ant Nath s contention that this letter dated 29. 1. 92 has to be read with respondent s letters annexures Rl to R3, to my mind" is without force. As pointed out above, all these letters bad been written by the respondent upto April, 1991, whereas the settlement of dues took place and communicated on 29. 1. 92 which clearly indicates that this amount was settled after discussions. In June 1992, when respondent wrote letter dated 29. 1. As pointed out above, all these letters bad been written by the respondent upto April, 1991, whereas the settlement of dues took place and communicated on 29. 1. 92 which clearly indicates that this amount was settled after discussions. In June 1992, when respondent wrote letter dated 29. 1. 92, it must be leaving before it Annexures Rl to R3 and must have also taken these into consideration i. e. the losses or damages suffered by it and only thereafter accepted the liability to the tune of Rs. 1,02,721. 03p. Asregards the statement of account of the respondent Company mentioned inannexure-IV the same was never forwarded to the petitioner at any stage. ( 7 ). Statutory notice was duly received by the respondent and in response the only defence taken was that the petitioner owed a sum of Rs. 1,35,780. 00. With this reply dated 4. 5. 92, Annexure-IV was not forwardedto the petitioner, hence the petitioner had no opportunity to know how therespondent had raised counter claim. To my mind, in view of settlementof debt after discussion it cannot be said that the respondent has raised asubstantial or a bona fide dispute. The admitted liability presently due hasnot been discharged by the respondent. Therefore, the petitioner is withinits right to file this petition. ( 8 ). In view of the above discussions. I am of the considered view thatthe petition be admitted for hearing. Let the citation be published in thedaily newspaper "statesman" (English), "veer Arjun" (Hindi) and Delhigazette for 20/01/1994.