Bona fide defence in company petition failed where contractual demand condition was unproved and alleged trade usage was not established.

The agreement was construed strictly on its written terms, and the assignee's obligation to demand specified materials before supply arose only on proof of such a demand. As no evidence of demand was shown, and the alleged trade practice was not part of the written contract and no independent oral term was proved, the respondent-company's defence was treated as neither bona fide nor credible. The court therefore rejected the defence to admission of the company petition and issued a conditional direction requiring deposit, failing which the petition would stand admitted and, on deposit, would stand dismissed.

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Issues: Whether the respondent-company had raised a bona fide and credible defence to resist admission of the company petition based on the agreement and alleged non-fulfilment of contractual terms.

Analysis: The agreement was construed on its own terms. Clause 4 required the assignor to supply specified materials only on demand by the assignee, and no material was shown to establish that such a demand had been made. The plea based on alleged trade practice was found not to form part of the written contract, and no independent oral term was proved. On that basis, the defence in reply was treated as neither bona fide nor credible.

Conclusion: The defence to admission was rejected. A conditional direction was issued requiring deposit of Rs. 5 lakhs, failing which the company petition would stand admitted and, upon deposit, the petition would stand dismissed.

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