Winding-up petition admitted where debt was proved and the company's dispute was found vague and unsupported.

A winding-up petition under the Companies Act, 1956 can be admitted where the debt is shown as due and payable and the alleged dispute is not bona fide. The record here included the dealership appointment letter, payment evidence, receipts issued by the company, and ledger entries supporting the claimed dues. The company's reply was found inconsistent and unsupported by documents, and the dispute was treated as vague and raised only to delay payment. On that basis, the respondent-company's defence was rejected as lacking substance and the petition was admitted.

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Issues: Whether the company petition for winding up should be admitted on the ground that the respondent-company had failed to pay debts due to the petitioner and the dispute raised was not bona fide.

Analysis: The petition was founded on sections 433 and 434 read with section 439 of the Companies Act, 1956. The material on record showed the dealership appointment letter issued on the company's letterhead, payments made by drafts and cash, receipts issued by the respondent, and ledger entries reflecting the amounts claimed. The respondent's reply was found to be inconsistent and unsupported by documents, while the alleged dispute was held to be vague and raised only to delay payment. On that basis, the Court concluded that the respondent had failed to discharge its obligation to pay debts that were apparently due and payable.

Conclusion: The respondent-company's defence was rejected as lacking substance, and the winding up petition was admitted.

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