Bona fide defence in winding up matters requires credible accounts; a vague denial may justify advertisement of the petition.

A winding up petition was considered on whether the respondent-company had raised a bona fide defence to resist advertisement for hearing. The company disputed liability and said accounts were unreconciled and further sums were due to it, but the Court treated this defence as vague and unsupported because it failed to produce its own company accounts and the last audited balance sheet despite opportunity. On the material before it, the Court formed a prima facie view that the company was avoiding payment and was unable to pay its dues, and directed advertisement of the petition under the applicable company court rules with a hearing date fixed.

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Issues: Whether the respondent-company had raised a bona fide defence to the winding up petition and whether the petition deserved advertisement for hearing.

Analysis: The respondent-company disputed liability and alleged that accounts had not been reconciled and that further amounts were due to it. The Court found this defence vague and unsupported, particularly as the respondent did not produce the company accounts maintained with it or the last audited balance sheet despite opportunity. On the material placed, the Court was not satisfied that the defence was bona fide and formed a prima facie view that the company was deliberately avoiding payment and was unable to pay its dues.

Outcome: Advertisement of the company petition was directed to be issued in accordance with the applicable company court rules, with a date fixed for hearing.

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