Winding up petition not maintainable where debt was disputed, limitation was substantial, and no acknowledgment of liability existed.

A winding up petition under Section 434 of the Companies Act, 1956 is not maintainable where the alleged debt is subject to a bona fide dispute and raises triable issues, including limitation. The Court found that the claimed subcontract amount appeared to arise from work completed long before filing, making the limitation objection substantial. It also held that the TDS certificate did not constitute an acknowledgment of liability, and the certificates relied on did not show admission by the company. Because the dispute required adjudication in a civil suit or arbitration rather than winding up proceedings, the petition was dismissed.

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Issues: Whether a winding up petition under Section 434 of the Companies Act, 1956 was maintainable where the alleged debt was disputed and a plea of limitation was raised.

Analysis: The petition was founded on an alleged unpaid subcontract amount. The Court found that the claim prima facie arose from work completed long before the petition was filed, making the limitation objection substantial. The Court also held that the TDS certificate did not amount to an acknowledgment of liability and that the certificates relied upon by the petitioner did not establish an admission by the company. On the material placed before it, the Court found that the dispute was bona fide and raised triable issues requiring adjudication in a civil suit or arbitration, not in winding up proceedings.

Conclusion: The winding up petition was not maintainable on these facts and was dismissed.

Ratio Decidendi: A winding up petition cannot be used as a substitute for debt recovery when the debt is subject to a bona fide dispute and triable issues, including limitation, remain to be adjudicated.

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