Bona fide disputed contractual debt cannot support winding up under the Companies Act unless inability to pay is clearly shown.

A winding up petition under section 433 of the Companies Act, 1956 is not maintainable where the claim arises from a contractual dispute and the alleged liability, including interest, is bona fide contested. Payment of the principal amount during the proceedings weakened the debt claim, and the unresolved interest dispute did not convert the matter into an admitted debt or establish inability to pay debts. A company court cannot be used to decide ordinary contractual claims. The order declining winding up was therefore upheld.

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Issues: Whether a winding up petition under section 433 of the Companies Act, 1956 was maintainable on the basis of a contractual claim for unpaid bills and disputed interest, and whether such dispute could be treated as an admitted debt justifying winding up.

Analysis: The dispute arose out of a contract between the parties, and the liability towards interest was specifically contested. The amount claimed towards bills had in substance been paid during the proceedings, while the claim for interest remained disputed. A company court cannot be converted into a civil court for adjudicating contractual disputes between a creditor and a company. Non-payment of a contractual bill, where the liability itself is disputed, does not by itself amount to an admitted debt or establish inability to pay debts for the purpose of winding up.

Conclusion: The winding up petition was not maintainable on the facts, and no order for winding up could be issued against the company.

Final Conclusion: The appeal failed, and the order declining winding up was upheld.

Ratio Decidendi: A bona fide disputed contractual claim, especially one relating to interest, cannot be used to invoke winding up jurisdiction under section 433 of the Companies Act, 1956 unless inability to pay debts is clearly established.

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