Statutory delayed-payment interest may be enforced in winding up even when only the interest amount is disputed.

A winding up petition is not meant to enforce a debt that is bona fide disputed, but where the principal sum is admitted and the real dispute concerns interest, the court may test whether the defence is genuine, substantial, and supported by prima facie facts. The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 imposes a statutory liability to pay delayed-payment interest to a small scale supplier, and that liability prevails over any contrary contractual term or other law. Section 6 is procedural and does not remove the substantive obligation. A dispute only on the quantum of interest does not by itself defeat the winding up remedy.

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Issues: Whether a company that has paid the principal amount but disputes liability to pay interest can resist winding up, and whether interest is recoverable under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 despite any contractual term to the contrary.

Analysis: A winding up petition is not to be used for enforcing a debt that is bona fide disputed; however, where the principal debt is admitted and the real controversy concerns interest, the Court may examine whether the defence is in good faith, one of substance, likely to succeed in law, and supported by prima facie facts. The Act of 1993 creates a statutory liability to pay interest to a supplier that is a small scale industry when payment is delayed, and that liability operates notwithstanding any agreement to the contrary or any other law in force. The mechanism in section 6 as to suit or other proceeding is procedural and does not extinguish the substantive obligation to pay interest. A dispute only about the exact quantum of interest does not defeat the winding up remedy where liability to pay interest otherwise exists.

Conclusion: The company's liability to pay statutory interest was upheld, and the winding up petitions were held maintainable on that basis, though the company was given an opportunity to pay the interest or settle the claim before further steps were taken.

Ratio Decidendi: Where the principal debt is admitted and the company's only defence concerns interest payable under a statutory delayed-payment regime, the Court may treat the liability to pay interest as enforceable in winding up proceedings even if the exact amount is disputed.

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