In Brief
Shital Fibers Ltd., a yarn manufacturer, disputed a statutory demand from Indian Acrylics Ltd. for unpaid dues of Rs. 8,92,723 for supplied acrylic yarn, claiming the material was defective and that compensation was owed to it instead. The Company Court and High Court found the defence was not bona fide or substantial—it was raised only in the written statement to the petition, contradicting the appellant's earlier reply to the statutory notice. The courts held that having utilized the raw material in manufacturing without contemporaneous documentary evidence of defects, the appellant could not subsequently refuse payment. The Supreme Court dismissed the appeal, upholding that the defence was an afterthought lacking merit, and that an ongoing profitable company status does not prevent winding-up for admitted debts."
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