Bona fide debt dispute bars winding-up jurisdiction where construction claim turns on contested facts and arbitration issues.

A winding-up petition is not maintainable where the alleged debt is genuinely and substantially disputed on material questions of fact and law. The court found that the existence and scope of the construction agreements, the basis of the claimed amount, the effect of arbitration proceedings, and the alleged construction defects all required detailed examination beyond company jurisdiction. Because the defence was not mere moonshine, the Company Court had to decline winding-up relief and leave the creditor to pursue the claim in the appropriate forum. The petition was rejected as unfit for admission.

---

---

Issues: Whether the winding-up petition was maintainable when the respondent raised a bona fide and substantial dispute as to the alleged debt due under the construction agreements.

Analysis: A winding-up petition cannot be used as a device for enforcing payment of a debt that is genuinely disputed. The material on record showed several disputed questions requiring detailed examination, including the existence and scope of the agreements, the basis of the claimed amount, the effect of the arbitration proceedings, and the nature and extent of the alleged defects in construction. These matters could not be conclusively resolved in company jurisdiction and the defence could not be characterised as mere moonshine.

Conclusion: The dispute was bona fide and substantial, and the company petition was not fit for admission. The petition failed.

Ratio Decidendi: Where a claimed debt is bona fide and substantially disputed on material questions of fact and law, the Company Court must decline winding-up jurisdiction and leave the creditor to establish the claim in the appropriate forum.

---