Winding up and bona fide dispute analysis: alleged client code errors failed to displace a prima facie debt claim.

A winding up petition under the Companies Act turned on whether the respondent had failed to pay an admitted debt and whether client code error or exchange settlement created a bona fide dispute. The court found that the petitioner had shown payment of the purchase price, that the exchange records did not match the contract note timing, and that the repeated client code error explanation was implausible because the mismatches involved multiple trades with materially different codes. The plea that the disputed amount had already been received through the exchange was also unsupported. The debt was treated as prima facie due and payable, and conditional relief followed on deposit of the claimed amount.

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Issues: Whether the respondent had failed and neglected to pay the petitioner's admitted claim so as to justify a winding up petition under the Companies Act, and whether the defence of client code error and settlement through the exchange raised a bona fide dispute.

Analysis: The petitioner established payment of the purchase price and showed that the exchange records did not match the time reflected in the contract note. The respondent's explanation of repeated client code errors was found implausible, particularly because the alleged mismatch related to multiple trades and the codes were materially different. The record also did not support the plea that the disputed amount had already been received by the petitioner through the exchange. On the material placed, the debt was treated as prima facie due and payable, and the respondent's refusal to pay was not shown to rest on a bona fide dispute.

Conclusion: The respondent was held liable to deposit the claimed amount, and the winding up petition was kept in abeyance subject to that deposit and consequential directions.

Final Conclusion: The petitioner obtained conditional relief on the footing that the claimed sum was prima facie recoverable, while the company petition was disposed of with a default-based revival mechanism.

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