Bona fide disputed debt in arbitration bars winding up where the claim is secured by bank guarantee.

Winding up was held to be inappropriate where the petition rested on a bona fide disputed claim arising from a final bill under the same contract that was already in arbitration. The court noted that the dispute involved competing claims rather than an undisputed debt, and that the amount was secured by a bank guarantee. In view of the pending arbitral proceedings and the company's solvent financial position, the winding up remedy was not justified. The admission order and final winding up order were therefore set aside.

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Issues: Whether the winding up order could be sustained when the underlying monetary claim was disputed and was also the subject of pending arbitration; and whether the company ought to have been wound up in the facts of the case.

Analysis: The claim forming the basis of the winding up petition arose from a final bill under the same contract that was also the subject matter of arbitration. The record showed that the dispute was not a case of an undisputed debt but involved adjudication of the parties' competing claims. The company had also secured the amount by furnishing a bank guarantee, and its financial position showed that it was a solvent company. In such circumstances, the existence of a pending arbitration on the core claim and the availability of security made winding up an inappropriate remedy.

Conclusion: The winding up order was not justified and could not be sustained.

Final Conclusion: The appeals succeeded, and both the admission order and the final order of winding up were set aside.

Ratio Decidendi: Winding up is not a proper remedy where the claim is bona fide disputed, the underlying dispute is pending in arbitration, and the amount claimed is secured.

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