ISSUE:
Whether the Company Court is bound to admit a winding up petition filed under Section 433 of the Companies Act, 1956?
RULE:
Section 433 of the Companies Act, 1956 empowers the Tribunal to pass a winding up order of the company if it is unable to pay off its debts.
However, the Company Court has to take into consideration the defense of the defaulting company before admitting the petition.
The winding up petition cannot be admitted automatically. In the situation the debt of the company is disputed for genuine reasons and the defense is considerable, the company should not be wound up.