Section 434 raises a legal fiction as to when the company would be deemed to be unable to pay its debts. Under Section 434(1) (a) of the Companies Act, 1956, failure on part of the debtor to pay debt due to creditor, would require company to be deemed to be unable to pay its debts. Where there is refusal to pay without any reasonable excuse it shall be held that company has neglected to pay amount due and order for winding up can be passed.
- Vijay Industries vs. NATL Technologies Limited, (2009) 3 SCC 527;
- Tata Iron and Steel Company Limited vs. Omega Cables Limited, 149CompCas457(Mad)
- PL Shipping and Logistics Private Limited vs. A.G.A. Publication Ltd., 173CompCas55(AP);
- SBI Global Factors Ltd. Mumbai vs. Suryachakra Power Corporation Ltd., 171CompCas264(AP);