Bona fide dispute over debt bars winding up where liability depends on contested facts and account reconciliation.

A winding up petition is not maintainable where the alleged debt is bona fide disputed on substantial grounds and liability turns on questions of fact. The company disputed the supply rate, claimed excess payment, and sought reconciliation of accounts, while the petitioner did not effectively rebut that defence by rejoinder. In those circumstances, the claim could not be treated as an admitted debt for winding up purposes, and the parties were left to pursue their rival claims before the proper forum for adjudication.

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Issues: Whether a company petition seeking winding up is maintainable when the alleged debt is bona fide disputed and the dispute turns on questions of fact.

Analysis: The petition was founded on an alleged unpaid supply debt, but the respondent company disputed the rate, asserted excess payment, and stated that reconciliation of accounts was sought. The pleadings showed a serious and bona fide dispute regarding liability, and the petitioner did not effectively rebut the respondent's version by any rejoinder. In such circumstances, the claim could not be treated as an admitted debt for the purpose of winding up, and the remedy lay before the appropriate forum for adjudication of the rival claims.

Conclusion: The winding up petition was not maintainable on the facts found, and the request to wind up the company was rejected.

Final Conclusion: The petition failed because the alleged debt was not shown to be undisputed, and the parties were left to pursue their respective claims in the proper forum.

Ratio Decidendi: A winding up petition cannot be used to enforce a debt that is bona fide disputed on substantial grounds, especially where determination of liability depends on disputed facts.

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