Running account does not defeat winding up where the debtor's records clearly acknowledge a subsisting debt.

A winding up petition based on a running account remains maintainable where the respondent's own books, balance sheet, or creditor records contain an unqualified acknowledgement of a subsisting debt. Such acknowledgment can establish prima facie liability and defeat objections founded on limitation or disputed liability, provided the document is read in context. A mere denial, without proof, is insufficient to negate the admission. Failure to produce directed creditor records may justify an adverse inference. On these principles, the debt was treated as prima facie established and the company petition was admitted for further winding up proceedings.

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Issues: Whether a winding up petition based on a running account was maintainable where the respondent's books of account and creditor records showed an acknowledged liability, and whether such acknowledgement could defeat objections based on limitation and disputed liability.

Analysis: A petition for winding up cannot be rejected merely because the transactions arose out of a running account if there is also a clear admission of liability by the respondent. An entry in the respondent's books of account or balance sheet may amount to an acknowledgement when it is an unqualified admission of a subsisting debt; the document must be read in context, and a mere dispute or unproved denial is insufficient to negate such acknowledgement. The objections of limitation, want of service of notice, and lack of registration were not pressed, and the respondent failed to produce the creditor list despite direction, permitting an adverse inference. In the circumstances, the respondent's reliance on the running account line of cases did not defeat the petition because the debt was independently acknowledged.

Conclusion: The petition was held maintainable and the respondent was treated as indebted to the petitioner on the basis of acknowledged liability.

Final Conclusion: The company petition was admitted for hearing on the footing that the respondent's debt stood prima facie established through acknowledgement, and the matter was kept pending for further steps in the winding up proceedings.

Ratio Decidendi: A running account does not by itself bar a winding up petition where the respondent has clearly acknowledged the debt in its own records, since such acknowledgement may constitute proof of a subsisting liability and render the debt enforceable for winding up purposes.

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