Winding up for alleged debt fails where the claim is disputed and no admitted liability is proved.

A winding-up petition based on debt cannot succeed unless the petitioner proves an admitted and enforceable liability. The clause relied on here required reimbursement only on a future increase in municipal tax and on production of documentary proof, but the record did not show any municipal order fixing the tax as asserted or any admitted debt payable by the respondent. The respondent's financial soundness also weighed against winding up on inability to pay debts or just and equitable grounds. The petition was therefore held not maintainable and was dismissed.

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Issues: Whether the petitioner established an admitted and enforceable debt so as to justify winding up of the respondent-company.

Analysis: The clause relied upon required reimbursement only on an increase in the municipal tax rate at a future date and upon production of documentary proof by the licensor. The record did not show any municipal order determining the rate of tax in the manner asserted by the petitioner, nor did it establish that the alleged demand represented an admitted debt payable by the respondent. The respondent also demonstrated financial soundness, which weighed against a winding up order on the ground of inability to pay debts or on just and equitable considerations.

Conclusion: The petitioner failed to prove an admitted debt or a ground for winding up. The issue is decided against the petitioner and in favour of the respondent.

Final Conclusion: The company petition for winding up was not maintainable on the facts established, and the proceedings were dismissed.

Ratio Decidendi: A winding up petition based on debt will fail where the debt is not admitted and the claim is shown to be disputed on a plausible contractual and factual basis.

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