Winding up on disputed debt fails where liability is contested, under arbitration, and the claim is time-barred.

A winding up petition is not maintainable where the alleged debt is genuinely disputed, the defence is bona fide, and the liability requires adjudication rather than summary treatment. Here, the respondent denied the claimed liability, raised limitation, and the dispute was already pending in arbitration, showing the debt was not admitted. The alleged affidavit in another proceeding was not conclusive acknowledgment of liability, and even if considered, the claim remained time-barred. The company court therefore would not admit the petition for winding up on the ground of inability to pay debts.

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Issues: Whether the petitioner was entitled to admission of the company petition for winding up on the ground of inability to pay debts.

Analysis: The lease transaction between the parties was not in dispute, but the respondent categorically denied the alleged liability and asserted that the claim was barred by limitation. The claim had already been referred to arbitration and was pending adjudication, which showed that the debt was not an admitted one. A winding up petition is maintainable only where the debt is undisputed or the defence is not bona fide; where the liability itself requires adjudication, the company court will not treat the matter as a fit case for winding up. The alleged affidavit of the respondent's Managing Director in another proceeding was not a conclusive acknowledgement in favour of the petitioner, and even if treated as such, the claim was still beyond limitation.

Conclusion: The petitioner was not entitled to an order admitting the company petition for winding up.

Final Conclusion: The petition failed because the alleged debt was disputed, required adjudication, and was in any event time-barred, so no winding up relief could be granted.

Ratio Decidendi: A winding up petition will not lie where the alleged debt is genuinely disputed and the dispute is pending adjudication, particularly where the claim is also prima facie barred by limitation.

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