Winding-up for unpaid debt survives where the dispute is not bona fide and civil suit remedies do not bar statutory demand.

A winding-up petition under Section 433(e) lies where the debt is not bona fide disputed and the company fails to pay after statutory demand. On the facts discussed, the respondent's reconciliation plea lacked supporting accounts and was treated as a mere moonshine, so non-payment amounted to neglect to pay under Section 434(1)(a). Objections based on authorisation and Rule 95 were treated as curable procedural irregularities and rejected. The availability of a civil suit did not bar the petition, commercial solvency alone did not rebut the presumption of inability to pay, and clauses (a) to (c) of Section 434(1) were treated as alternative, not cumulative.

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Issues: (i) whether the respondent had raised a bona fide dispute regarding the debt claimed by the petitioner; (ii) whether the petition was maintainable despite the objection as to authorisation under Rule 21 of the Companies (Court) Rules, 1959 and compliance with Rule 95 thereof; (iii) whether availability of a civil suit barred exercise of jurisdiction under Section 433(e) of the Companies Act, 1956; (iv) whether the respondent's alleged commercial solvency rebutted the statutory presumption of inability to pay debts; and (v) whether clauses (a) to (c) of Section 434(1) were cumulative or alternative.

Issue (i): Whether the respondent had raised a bona fide dispute regarding the debt claimed by the petitioner.

Analysis: The materials showed that the respondent had placed an order for services, agreed to payment terms, received the petitioner's invoices, acknowledged outstanding amounts in correspondence, and failed to reply to the statutory notice. The respondent's plea of reconciliation was not supported by any concrete statement of accounts or denial of liability. The dispute was therefore treated as not genuine or substantial, but as a mere moonshine. In such a situation, non-payment after statutory demand amounted to neglect to pay within the meaning of Section 434(1)(a) of the Companies Act, 1956.

Conclusion: The debt was not bona fide disputed, and the respondent was held to have neglected to pay the amount due.

Issue (ii): Whether the petition was maintainable despite the objection as to authorisation under Rule 21 of the Companies (Court) Rules, 1959 and compliance with Rule 95 thereof.

Analysis: The Board resolution authorised the Managing Director to appoint an agent to prosecute company petitions, and leave of the Court was obtained under the proviso to Rule 21. The defect, if any, in the affidavit/signature arrangement was treated as a curable procedural irregularity. The petition also satisfied Rule 95 because it pleaded the debt, the demand notice, non-payment, and the company's inability to pay in the commercial sense.

Conclusion: The objections under Rule 21 and Rule 95 were rejected.

Issue (iii): Whether availability of a civil suit barred exercise of jurisdiction under Section 433(e) of the Companies Act, 1956.

Analysis: A winding-up petition on the ground of inability to pay debts is distinct from a money recovery suit. The statutory scheme did not require the petitioner to be relegated to a civil suit where the debt was undisputed or not bona fide disputed. Section 443(2) was held applicable to petitions under Section 433(f), not to petitions under Section 433(e).

Conclusion: The existence of a civil remedy did not bar the winding-up petition under Section 433(e).

Issue (iv): Whether the respondent's alleged commercial solvency rebutted the statutory presumption of inability to pay debts.

Analysis: Commercial solvency is relevant only where it assists in testing whether the refusal to pay reflects a genuine dispute or inability, and it is not a standalone ground to defeat a petition under Section 433(e). The respondent produced no audited balance sheet or profit and loss account, and its bare assertion that it was profitable was unsupported. The statutory presumption arising from non-payment after notice was therefore not rebutted.

Conclusion: The plea of commercial solvency failed to displace the presumption of inability to pay.

Issue (v): Whether clauses (a) to (c) of Section 434(1) were cumulative or alternative.

Analysis: The three clauses addressed distinct situations: neglect after notice, unsatisfied execution, and proof of inability to pay. The use of the disjunctive language showed that they operate in the alternative, not cumulatively. Reading them as cumulative would defeat the statutory fiction.

Conclusion: Clauses (a) to (c) of Section 434(1) were held to be alternative.

Final Conclusion: The company petition was admitted for winding up proceedings on the footing that the respondent had not shown a bona fide defence to the debt and had not rebutted the statutory presumption of inability to pay its debts.

Ratio Decidendi: A winding-up petition under Section 433(e) lies where the debt is not bona fide disputed and the company fails to pay after statutory demand, and commercial solvency or the availability of a civil suit does not by itself defeat the statutory presumption under Section 434(1)(a).

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