Bona fide debt dispute defeats winding up petition where unpaid balance is contested over defective goods and liability.

A winding up petition is not maintainable where the alleged debt is genuinely and bona fide disputed on substantial grounds. The respondent showed contemporaneous correspondence alleging defects in supplied bearings, inspection by the petitioner's representatives, and a request for replacement before payment of the disputed balance. Those materials established a real dispute about quality and liability, so the non-payment could not be treated as an undisputed debt. The court held that winding up proceedings cannot be used to enforce a contested money claim or as a substitute for a civil suit, and the petitioner had not made out the prima facie case required for admission of the petition.

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Issues: Whether the company petition seeking winding up of the respondent-company was maintainable in view of the dispute regarding the outstanding balance and alleged defects in the supplied bearings.

Analysis: The petition was founded on an alleged unpaid balance for goods supplied under the parties' commercial dealings. The respondent, however, produced correspondence showing that two bearings were alleged to be defective, that the petitioner's representatives had inspected the matter, and that replacement had been sought before payment of the disputed amount. The materials showed a contemporaneous and consistent dispute about quality and liability. In such circumstances, the non-payment could not be treated as an undisputed debt, and the petition could not be used as a means to enforce a contested money claim. The petitioner therefore failed to establish the prima facie case required for admission of a winding up petition.

Conclusion: The winding up petition was not maintainable and was dismissed.

Final Conclusion: The dispute being bona fide and substantial, the respondent-company could not be wound up on the basis of the claimed outstanding amount, and the petitioner was left to pursue ordinary civil remedies for recovery, if so advised.

Ratio Decidendi: A winding up petition cannot be admitted or allowed where the debt is genuinely and bona fide disputed on substantial grounds, and such proceedings cannot be used as a substitute for a civil suit for recovery of money.

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