Disputed company debt defeats winding up where liability is denied and no clear admission of the claim is shown.

A winding up petition cannot be entertained on the basis of an alleged company debt where liability is genuinely disputed and no clear admission of the claimed amount exists. The petitioner relied on unpaid bills and a demand notice, but the respondents denied liability and asserted that the goods supplied did not conform to specification, were not properly inspected, and did not match the purchase order. The correspondence on record was insufficient to prove an undisputed debt. The claim was therefore treated as a disputed one, and not a proper foundation for admission of the winding up petition.

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Issues: Whether a winding up petition could be entertained when the alleged company debt was disputed and there was no admitted liability.

Analysis: The petition sought winding up on the basis of unpaid bills and notice of demand. The respondents denied liability and raised a substantive dispute that the goods supplied were not according to specification, were not properly inspected, and did not conform to the purchase order. The record did not show any clear admission of the claimed amount, and the correspondence relied upon by the petitioner was insufficient to establish an undisputed debt.

Conclusion: The claim was found to be a disputed one and not a basis for admission of a winding up petition.

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