Disputed interest on unpaid invoices is not an admitted debt in winding up proceedings where liability is bona fide contested.

In winding up proceedings, a disputed claim for interest on unpaid invoices was not treated as an admitted debt. The court held that "debt" under section 433(e) of the Companies Act, 1956 means an ascertained and definite amount due, and does not extend to an interest claim needing adjudication or assessment. Although interest may be pursued in a money recovery action under the Sale of Goods Act, 1930 or the Interest Act, 1978, a company court should not quantify a bona fide disputed claim or convert winding up into debt recovery. After the principal was paid, the company was commercially solvent and the petition failed.

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Issues: Whether, in a winding up petition, a disputed claim for interest arising from unpaid invoices can be treated as an admitted debt so as to establish inability to pay debts and justify winding up.

Analysis: The principal amount due for supply of generators was paid during the pendency of the petition. The remaining claim was only for interest, but there was no contractual stipulation for interest in the purchase orders, no clear contractual basis shown in the bills, and no admission by the company to pay interest. The court held that, in winding up proceedings under section 433(e) of the Companies Act, 1956, the expression "debt" refers to an ascertained and definite amount due, and does not extend to a claim for interest that requires adjudication or assessment. A claim for interest under section 61(2)(a) of the Sale of Goods Act, 1930 or section 3 of the Interest Act, 1978 is available in proceedings for recovery of money, but not in winding up proceedings. Where liability to pay interest is bona fide disputed as to liability, rate, or commencement date, the company court should not quantify the claim or convert the proceeding into a debt recovery action.

Conclusion: The disputed interest did not constitute an admitted debt, the company was commercially solvent after paying the principal, and the winding up petition could not be maintained.

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