Acknowledgement of debt after settlement of dispute operates as an admission of liability and can be the basis for a winding-up petition under Section 433(e) of the Companies Act.

( 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. 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