Winding up for admitted debt turns on a bona fide dispute; unsupported, contradictory defences will not defeat the petition.

A winding up petition may succeed where an admitted debt remains unpaid after statutory notice and the company fails to show a bona fide, substantial dispute. The court rejected mutually destructive defences that the payment was either for a third company's liability or a loan repayable later under an alleged e-mail arrangement, holding that the e-mail lacked essential terms and was not a binding contract. The consultancy-based explanation was treated as irrelevant to the petitioner's separate claim and unsupported by credible material. With no repayment after notice and no public interest ground against winding up, the debt was treated as due, neglected and unpaid, and the company was ordered to be wound up.

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Issues: Whether the respondent company had raised a bona fide and substantial dispute to the admitted debt of Rs. 20 lakhs so as to defeat winding up, and whether the company was liable to be wound up for neglecting to pay the debt after statutory notice.

Analysis: The respondent company admitted receipt of Rs. 20 lakhs and receipt of the winding up notice, but set up two mutually destructive defences: first, that the amount was not a loan but payment towards an alleged liability of a third company; and second, that it was a loan repayable only on 31 December 2010 on the basis of an e-mail. The e-mail was held not to be a proposal capable of creating a binding contract, as it did not specify the loan amount or essential terms. The alternative defence based on the alleged consultancy arrangement with the third company was rejected as irrelevant to the petitioner's claim, since the petitioner company was a separate juristic entity, and the supporting documents were found to be suspicious and lacking bona fides. In the absence of repayment after statutory notice, and with no credible public interest reason against winding up, the debt was treated as due, neglected and unpaid.

Conclusion: The defence was not bona fide or substantial, the debt remained unpaid despite notice, and the respondent company was liable to be wound up.

Final Conclusion: The winding up petition succeeded and the respondent company was ordered to be wound up, with the Official Liquidator appointed to take further steps in accordance with law.

Ratio Decidendi: A winding up order may follow where a company fails to pay an admitted debt after statutory notice and the defence raised is mutually destructive, unsupported by credible material, and does not disclose a bona fide substantial dispute.

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