Disputed debt cannot be tested in winding-up proceedings, while sick company suspension periods are excluded from limitation.

A winding-up petition is not a proper forum for adjudicating a genuinely disputed debt, particularly where liability, interest calculations, and other factual issues require evidence; such claims must be pursued in civil proceedings. The period during which inquiry, scheme consideration, or implementation under the sick industrial company framework remained pending is excluded in computing limitation, and the continuation of the sanctioned scheme until 31-3-1999 meant the suspension period could not be ignored.

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Issues: Whether the winding-up petitions could be entertained when the debt, interest liability, and effect of the rehabilitation scheme under the sick industrial company framework were disputed; and whether the period during which the reference and sanctioned scheme were pending excluded limitation.

Analysis: The petitions were founded on alleged unpaid trade dues, but the respondent disputed liability, particularly the claim for substantial interest, and raised issues requiring evidence. The company had been before the sick industrial company forum and a sanctioned scheme had been under implementation till 31-3-1999. On the statutory scheme, proceedings for winding up and recovery are suspended while inquiry, scheme consideration, or implementation is pending, and the period of suspension is excluded for limitation purposes. The closing of the reference in 1996 did not override the fact that the scheme continued to be implemented till 31-3-1999. At the same time, the Court held that the dispute was not fit for adjudication in winding-up jurisdiction because the claims involved contested facts and interest calculations beyond a summary proceeding.

Conclusion: The petitions were not maintainable as winding-up proceedings for determination of the disputed claims, and the limitation objection failed to the extent the statutory suspension period had to be excluded. The petitioners were left to establish their claims before the civil court.

Final Conclusion: The winding-up remedy was declined in favour of a civil adjudication route, with only a conditional protective deposit directed pending any suit.

Ratio Decidendi: A winding-up petition is not the proper forum for adjudicating a genuinely disputed debt, especially where the claim turns on contested interest and factual issues requiring evidence, and the suspension period under the sick industrial company statute must be excluded in computing limitation.

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