Bona fide debt dispute and discretionary interest govern winding up and unpaid price claims in a sale of goods transaction.

A winding up petition for non-payment of debt will not be defeated unless the company shows a bona fide, substantial dispute supported by prima facie evidence; on the stated facts, the defence lacked contemporaneous support and was treated as an afterthought, so the petition was maintainable. In a sale of goods transaction, interest on unpaid price may be awarded in the court's discretion under the Sale of Goods Act; the claimed rate was not proved, and interest was reduced to 12% per annum as just and proper from the specified date until realization.

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Issues: (i) Whether the company's defence disclosed a bona fide and substantial dispute so as to defeat winding up for non-payment of debt; (ii) whether the petitioner was entitled to interest at the claimed rate, and if not, at what rate interest should be awarded.

Issue (i): Whether the company's defence disclosed a bona fide and substantial dispute so as to defeat winding up for non-payment of debt.

Analysis: A winding up petition cannot be used as a means of enforcing a debt that is bona fide disputed. To resist such a petition, the company must show that its defence is in good faith, of substance, likely to succeed in law, and supported by prima facie proof of the facts on which it rests. On the material placed before the Court, the petitioner established the debt prima facie through the statement of accounts and statutory notice. The respondent's version was not supported by ledger extracts, balance-sheet material, or any contemporaneous denial in reply to the statutory notice. The defence was treated as an afterthought and was not shown to be a substantial dispute.

Conclusion: The debt was not bona fide disputed and the petition for winding up was maintainable in favour of the petitioner.

Issue (ii): Whether the petitioner was entitled to interest at the claimed rate, and if not, at what rate interest should be awarded.

Analysis: The petitioner did not prove entitlement to interest at 18% per annum. In a sale of goods transaction, interest on unpaid price may be awarded under the court's discretion under section 61 of the Sale of Goods Act. Considering the circumstances, the Court found that 12% per annum would be just and proper on the principal amount from the date specified till realization.

Conclusion: Interest was awarded at 12% per annum instead of 18% per annum, in favour of the petitioner to that extent.

Final Conclusion: The petition succeeded on the principal debt claim and the company was required to pay the adjudged amount with reduced interest, failing which the winding up proceedings would be advertised and carried forward.

Ratio Decidendi: A winding up petition will lie where the debt is prima facie proved and the company fails to establish a bona fide, substantial dispute supported by prima facie evidence; interest on unpaid price under a sale of goods transaction may be awarded at a rate the Court considers just and proper.

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