Winding-up petition admitted where admitted debt and sham defence could not displace liability under the Sale of Goods Act.

A winding-up petition may be admitted where the debt is admitted or otherwise clearly proved and the company fails to raise a genuine, substantial dispute. The Court found the defence to be sham because the liability was supported by an express admission and documentary material, including forwarding of C Forms, while the alleged defects in goods were not shown to negate the outstanding claim. It also applied the Sale of Goods Act, 1930, holding that delivery and payment are concurrent conditions and that acceptance of the goods, on the facts found, defeated the withholding defence. The petition was admitted and the company was directed to deposit the claimed amount.

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Issues: Whether the company had raised a bona fide and substantial dispute to resist the winding-up petition, and whether the admitted and proved liability justified admission of the petition.

Analysis: The debt was supported by an express admission and by documentary material showing that C Forms had been forwarded for the transactions. The objection regarding allegedly defective goods was found untenable because the disputed consignments had been accepted, complaints were not shown to survive in relation to the outstanding claim, and the company itself had later sought further supplies while acknowledging the outstanding balance. The Court applied the winding-up principles that a company will not be wound up where there is a genuine, substantial dispute, but a mere moonshine or sham defence cannot defeat the petition. The rights of the parties were also examined under the Sale of Goods Act, 1930, under which delivery and payment are concurrent conditions and acceptance of the goods follows from the facts found.

Conclusion: The defence was not bona fide and was treated as sham and dishonest. The winding-up petition was admitted and the company was directed to deposit the claimed amount.

Ratio Decidendi: A winding-up petition may be admitted where the debt is admitted or clearly proved and the company's objection is not a genuine substantial dispute but only a sham defence; under the Sale of Goods Act, 1930, acceptance of goods and concurrent obligation to pay price defeat a withholding defence based on an unrelated or belated complaint.

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