Bona fide debt dispute bars winding-up where no unconditional refund promise or return-of-goods obligation is shown.

A winding-up petition is not maintainable where the alleged debt is bona fide and substantially disputed. The Court held that an acknowledgment stating the admitted amount would be adjusted against future purchases was not an unconditional promise to refund money, and no contractual term required the respondent to take back unsold goods and return the consideration. It further noted that, under Section 19 of the Sale of Goods Act, title passes when the parties intend it to pass, and there was nothing to show title had not passed to the petitioner. The company court will not decide contested facts or enforce a claim better suited to civil proceedings.

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Issues: Whether a winding-up petition was maintainable when the alleged debt was genuinely disputed and whether the respondent was liable to take back unsold goods and refund the consideration.

Analysis: The petition was founded on an alleged liability arising from a vendor arrangement and on an acknowledgment stating that the admitted amount would be adjusted against future purchases. The Court found that the acknowledgment did not amount to an unconditional promise to refund the amount, but only indicated adjustment against future supplies. No clause in the agreement was shown to require the respondent to take back surplus stock and return the sale consideration. The Court also noted that under Section 19 of the Sales of Goods Act, 1930, title passes when the parties intend it to pass, and there was nothing to show that title had not passed to the petitioner. The dispute as to liability was held to be bona fide and substantial, and the Court reiterated that a company court does not adjudicate disputed factual claims that are fit for a civil suit.

Conclusion: The winding-up petition was not maintainable on the facts and was dismissed because the alleged debt was bona fide disputed on substantial grounds.

Ratio Decidendi: A winding-up petition must be dismissed where the alleged debt is bona fide and substantially disputed, and the company court cannot use its jurisdiction to decide contested facts or enforce a claim that should first be established in civil proceedings.

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