Bona fide debt dispute and limitation bar defeat winding-up jurisdiction over a contested security deposit claim.

A winding-up petition is not maintainable where the alleged debt is genuinely disputed and the company court would have to decide contested facts, such as whether a security deposit was validly forfeited. In such summary jurisdiction, a prima facie bona fide defence that may succeed in a civil suit requires the parties to be left to ordinary civil proceedings. The petition also appeared barred by limitation because it was filed more than six years after the alleged refusal to refund the security amount, so the claim was not a legally recoverable debt for winding-up purposes.

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Issues: Whether a winding-up petition was maintainable when the respondent raised a bona fide dispute regarding forfeiture of the security deposit and when the claim was alleged to be time-barred.

Analysis: A petition for winding up is not a proper vehicle for enforcing payment of a debt that is genuinely disputed. Where the defence raised is prima facie bona fide and is likely to succeed in a civil court, the company court should not embark upon a trial of disputed questions of fact in summary proceedings and should leave the parties to a civil suit. On the facts, the central dispute was whether the security deposit had been validly forfeited, which could not be resolved in winding-up jurisdiction. Separately, the petition was filed more than six years after the alleged refusal to refund the security amount, so the claim appeared barred by limitation and therefore not a legally recoverable debt for the purposes of winding up.

Conclusion: The winding-up petition was not maintainable and was dismissed in favour of the respondent.

Ratio Decidendi: A winding-up petition cannot be used to compel payment of a debt that is bona fide disputed or time-barred, because such a claim is not a legally recoverable debt suitable for summary company-court jurisdiction.

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