Winding-up petition cannot proceed on a bona fide contractual dispute or a time-barred debt claim.

A winding-up petition is not maintainable where the underlying debt is genuinely disputed on facts, including disagreement over contractual performance, supply obligations, retention money, and adjustment of advances. The article also states that an admission referring to an earlier liability cannot sustain insolvency proceedings if the claim has become time-barred; a stale demand cannot be revived through winding-up jurisdiction. The stated principle is that company winding-up is unavailable for an undisputed debt only, and limitation remains a complete bar where the alleged liability is no longer enforceable.

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Issues: (i) whether the winding-up petition was maintainable in view of a bona fide dispute regarding performance of the agreement and the alleged liability; (ii) whether the alleged debt could sustain the petition when the admission relied upon related to an earlier, time-barred claim.

Issue (i): whether the winding-up petition was maintainable in view of a bona fide dispute regarding performance of the agreement and the alleged liability

Analysis: The petition was founded on a claim arising out of contractual dealings for supply and erection of machinery. The respondent disputed the petitioner's performance and asserted that the petitioner had failed to supply the equipment as agreed. The record showed correspondence and material indicating controversy over completion of contractual obligations, including the question of retention money and adjustment of advances. On these facts, the liability was not an undisputed debt suitable for winding-up jurisdiction.

Conclusion: The winding-up petition was not maintainable because a bona fide dispute existed between the parties.

Issue (ii): whether the alleged debt could sustain the petition when the admission relied upon related to an earlier, time-barred claim

Analysis: The admission relied upon by the petitioner was contained in a special notice connected with a charge-related filing and referred to liability as it stood on an earlier date. Even assuming that the amount was admitted, the petition was filed much later. A claim that had become barred by limitation could not be enforced through a winding-up petition, and the alleged admission could not revive such a stale demand.

Conclusion: The alleged debt was time-barred and could not support the winding-up petition.

Final Conclusion: The company petition failed on both the existence of a bona fide dispute and the bar of limitation, and the respondent-company was not liable to be wound up.

Ratio Decidendi: A winding-up petition will not lie where the debt is genuinely disputed or where the claim sought to be enforced is barred by limitation.

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