In Brief
Shital Fibers Ltd. purchased acrylic yarn on credit from Indian Acrylics Limited. After supply commenced, disputes arose over quality. The supplier credited some returns and issued a credit note for defects, but an outstanding balance of Rs. 8.92 lakh remained unpaid. The supplier issued a statutory notice; the company's reply was evasive. When payment was not made, the supplier petitioned for winding-up. The company claimed defective material caused customer returns and sought compensation. The Supreme Court upheld the admission of the winding-up petition, finding the company's defence contradictory, lacking documentary proof, and raised as an afterthought. The court held that a bona fide defence requires substantial grounds supported by prima facie evidence, not merely vague denials.
The lawyer headnote and full judgment text are available to registered users.