Bona fide disputed debt bars winding-up where interest liability is unascertained and neglect to pay is not proved.

A winding-up petition cannot proceed where the alleged debt is bona fide disputed on substantial grounds and is not an ascertained, definite liability. A claim for interest on delayed payments was unsupported by any written agreement or prima facie proof of binding trade practice, and the company's challenge to both liability and quantum showed that neglect to pay was not established. Winding-up jurisdiction cannot be used as a substitute for debt recovery or to pressure payment where the claim is genuinely disputed. On that basis, the admission order was set aside and the winding-up proceedings failed.

---

---

Issues: Whether a winding-up petition could be admitted on the basis of a disputed claim for interest on delayed payments, and whether such a dispute showed neglect to pay so as to attract sections 433(e) and 434 of the Companies Act, 1956.

Analysis: The claim for interest was not supported by any written agreement or prima facie evidence of a binding trade practice. The liability and quantum of the alleged debt were disputed by the company on substantial grounds, and the amount claimed was neither ascertained nor definite. In winding-up jurisdiction, a bona fide disputed debt does not amount to neglect to pay, and the remedy cannot be used as a substitute for recovery proceedings or to exert pressure for payment.

Conclusion: The dispute was bona fide and substantial, and the company could not be treated as unable to pay its debts on the material before the Court.

Final Conclusion: The order admitting the company petition was set aside, and the winding-up proceedings did not survive.

Ratio Decidendi: A winding-up petition cannot be sustained where the alleged debt is bona fide disputed on substantial grounds and is not shown to be an ascertained and definite liability; in such a case, neglect to pay is not established under section 434 of the Companies Act, 1956.

---