Bona fide dispute over privity and liability bars winding up proceedings where the debt claim cannot be decided summarily.

A winding up petition is not maintainable where privity of contract and the respondent's liability are prima facie and bona fide disputed. The respondent had consistently denied any contractual dealing with the petitioner, asserted that the purchase was from a different entity, and relied on payments made to that entity and cleared by the banker. In the absence of any rejoinder, the dispute was substantial and could not be resolved in winding up jurisdiction. The petition was therefore dismissed.

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Issues: Whether the winding up petition was maintainable when there was a prima facie serious dispute as to privity of contract and the respondent's liability to the petitioner.

Analysis: The respondent's pleadings and contemporaneous reply to the statutory notice consistently denied any contractual dealing with the petitioner and asserted that the purchase was from a different entity. The pleadings further indicated that payments had been made to that other entity and cleared by the banker. In the absence of any rejoinder, the dispute as to liability and privity appeared bona fide and substantial. Such a disputed claim could not be adjudicated in winding up proceedings.

Conclusion: The petition was not maintainable in winding up jurisdiction and was dismissed.

Ratio Decidendi: A winding up petition cannot be used to determine a genuinely disputed claim where privity of contract and liability are seriously contested on prima facie material.

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