Bona fide disputed debt bars winding-up, and a curable verification defect will not by itself defeat the petition.
A curable defect in the affidavit verifying a winding-up petition does not by itself justify rejection where the deponent identifies his role and confirms the petition on knowledge and information, and a subsequent affidavit can cure the irregularity. More importantly, winding-up jurisdiction cannot be used to enforce a debt that is bona fide disputed on substantial grounds. Where the dispute concerns contractual performance, defects, retention money, counter-claims, and arbitration has been invoked, the claim is not treated as admitted or definite. The petition was therefore not maintainable on merits and was rejected.
Issues: (i) whether a defect in the affidavit verifying the winding-up petition warranted rejection of the petition; (ii) whether the company could be wound up where the debt claimed was bona fide disputed and arbitration had been invoked.
Issue (i): whether a defect in the affidavit verifying the winding-up petition warranted rejection of the petition.
Analysis: The verification requirement under the Company (Court) Rules is intended to ensure authenticity of the allegations and accountability of the deponent. A defect in form, if any, does not by itself justify rejection where the deponent discloses his position in the company and affirms the petition on knowledge and information. In any event, a subsequent affidavit curing the alleged irregularity was filed, and such curative compliance was treated as permissible.
Conclusion: The affidavit objection was rejected and the petition was not liable to fail on this ground.
Issue (ii): whether the company could be wound up where the debt claimed was bona fide disputed and arbitration had been invoked.
Analysis: A winding-up petition is not a legitimate means of enforcing payment of a debt that is bona fide disputed. Where the defence is substantial, the court will not act on the deeming provision of inability to pay debts. On the record, the dispute turned on contractual performance, acceptance, retention money, alleged defects, and counter-claims. The petitioner had itself invoked the arbitration clause and pursued parallel relief in arbitration-related proceedings, showing that the claim was neither definite nor admitted. The material disclosed a real dispute rather than a mere moonshine defence.
Conclusion: The petition for winding up was not maintainable on merits and was rejected.
Final Conclusion: The winding-up jurisdiction was declined because the alleged debt was not admitted, the dispute was bona fide and substantial, and the petition could not be used as a pressure tactic for recovery.
Ratio Decidendi: A company will not be wound up on a creditor's petition where the debt is bona fide disputed on substantial grounds; a curable defect in verification does not, by itself, defeat the petition.
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