Winding-up petition: disputed liability requiring full trial cannot be resolved in summary proceedings; petitioner may sue in civil court.

Refusal to wind up where the creditor's claim raises substantial disputed facts and a tenable defence; court found dishonoured cheques but held that contested issues about quality of goods and resultant contractual liability cannot be finally determined in summary winding-up proceedings and must be litigated in a properly framed civil suit, therefore the winding-up petition was dismissed and the petitioner was granted liberty to pursue recovery by filing a suit in civil court.

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Issues: Whether a petition for winding up under Section 433(e) and (f) read with Sections 434(1)(a) and 439(1)(b) of the Companies Act, 1956 should be granted where the company raises a tenable defence to the creditor's claim and the precise liability can only be determined in a suit.

Analysis: Evidence filed and oral testimony were considered on the limited record of a summary winding-up petition. The existence of dishonoured cheques was established, but explanations and competing factual contentions about the quality of goods and resultant contractual consequences were also shown. The factual and liability issues bearing on the amount due are not susceptible to final determination in summary winding-up proceedings and involve matters more appropriately litigated in a properly framed civil suit.

Conclusion: Petition for winding up refused; petitioner given liberty to pursue recovery by filing a suit in a civil court.

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