Bona fide dispute in winding-up and money-lender licence objections do not bar proceedings when debt is prima facie established.

A winding-up petition may be admitted where the company fails to show a bona fide defence on prima facie material; receipt of the loan, unsupported allegations of fraud, withholding of documents, and no challenge to the loan agreement indicated that the debt was not genuinely disputed. A money-lender's licence objection under Section 13 of the Bengal Money Lenders Act, 1940 did not apply to a winding-up application, because that provision was treated as governing recovery suits for money lent and advanced. The contractual interest rate was also considered excessive on the facts, so the claim was moderated to 9% per annum while the principal liability was maintained.

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Issues: (i) whether the company had raised a bona fide defence to resist admission of the winding-up petition; (ii) whether the petition was barred or stayed for want of a money-lender's licence under Section 13 of the Bengal Money Lenders Act, 1940; (iii) whether the contractual rate of interest claimed by the petitioning creditor required reduction.

Issue (i): whether the company had raised a bona fide defence to resist admission of the winding-up petition;

Analysis: The company did not dispute receipt of the loan amount through its bank account. The defence based on change of management, absence of board resolution, and allegations of fraud was found unsupported by prima facie proof. The company also withheld documents said to be in its possession and had not initiated any proceeding to cancel the loan agreement. In such circumstances, the defence was held not to be bona fide or one of substance.

Conclusion: The company had not established a bona fide defence, and the winding-up petition was liable to be admitted.

Issue (ii): whether the petition was barred or stayed for want of a money-lender's licence under Section 13 of the Bengal Money Lenders Act, 1940;

Analysis: Section 13 was held to operate where a suit is filed for recovery of money lent and advanced without the requisite licence. The present proceeding was a winding-up application under the Companies Act, 1956, and not such a recovery suit.

Conclusion: The absence of a money-lender's licence did not bar or stay the winding-up petition.

Issue (iii): whether the contractual rate of interest claimed by the petitioning creditor required reduction;

Analysis: The agreed rate of 21% per annum was considered exorbitantly high in the facts of the case. The claim was therefore scaled down to a lower rate while sustaining the principal liability.

Conclusion: The rate of interest was reduced to 9% per annum.

Final Conclusion: The winding-up application was admitted on the basis that the debt was not bona fide disputed, the money-lender objection was inapplicable, and the interest claim required moderation.

Ratio Decidendi: A winding-up petition may be admitted where the alleged debt is not shown to be bona fide disputed on prima facie material, and a money-lender licence requirement applicable to recovery suits does not govern such proceedings.

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