Bona fide dispute in winding up proceedings fails where debt is admitted by invoices, part-payment, and a dishonoured cheque.

A winding up petition may proceed where the debt is supported by invoices, confirmation of balance due, part-payment, and a dishonoured cheque, because these materials indicate admitted liability under section 434 of the Companies Act, 1956. A mere denial of liability or a vague challenge to the cheque does not amount to a bona fide dispute. The Court treated the defence as an afterthought and held that jurisdiction is not excluded simply because a document is disputed; the real question is whether the defence is genuine. On the facts, the debt was due and payable and the petitioner could rely on the admitted liability.

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Issues: Whether the respondent had raised a bona fide dispute so as to resist the winding up petition, and whether the debt claimed by the petitioner stood admitted for the purposes of section 434 of the Companies Act, 1956.

Analysis: The liability was supported by the invoices, the respondent's confirmation of the balance due, part-payment made thereafter, and the cheque issued by the respondent which was dishonoured for want of sufficient funds. A mere denial of liability or a vague challenge to the cheque did not amount to a genuine dispute. Jurisdiction in winding up is not excluded merely because a document is disputed; the Court must see whether the defence is bona fide. On the facts, the defence was found to be an afterthought and the debt was treated as admitted.

Conclusion: The dispute was not bona fide and the debt was due and payable; the petitioner was entitled to proceed on the basis of the admitted liability.

Ratio Decidendi: A winding up petition may be maintained where the debt is substantiated by admission, confirmation of balance, and part-payment, and a merely speculative or evasive denial will not constitute a bona fide dispute under section 434 of the Companies Act, 1956.

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