Winding-up petition cannot be used as a coercive recovery tool for a disputed debt already in civil litigation.

A winding-up petition is a discretionary equitable remedy and not an automatic consequence of non-payment. Where the debt is disputed and a civil suit for the same claim is already pending, the petition cannot be used as a substitute for ordinary recovery proceedings or as a coercive device to secure payment. On that basis, the court treated the winding-up machinery as inappropriate for enforcing a contested debt and held the petition not maintainable for recovery purposes.

---

---

Issues: Whether a creditor's winding-up petition could be maintained as a mode of recovery where the debt was disputed and a civil suit for the same claim was already pending.

Analysis: The remedy of winding up is available against a company that is unable to pay its debts, but the existence of such power does not make winding up an automatic consequence of non-payment. The jurisdiction is discretionary and is to be exercised with propriety. A winding-up petition is not to be used as an ordinary substitute for a suit or as a coercive device for realisation of a disputed debt. Where the creditor has already resorted to civil proceedings for recovery of the claim, the winding-up machinery should not be invoked merely to enforce payment.

Conclusion: The petition was not maintainable as a means of recovering the disputed debt and was rejected against the petitioner.

Ratio Decidendi: A winding-up petition is a discretionary equitable remedy and cannot be employed as an alternative to ordinary civil recovery proceedings for a disputed debt.

---