Winding up denied where debts were bona fide disputed and no true deadlock or loss of substratum was shown.

A winding up petition fails where the statutory notice is not shown to have been duly served and the alleged debts remain bona fide disputed. The court held that the petitioners could not rely on the presumption of inability to pay, as the attorneys' claim was disputed and the consent-decree claim was doubtful against a company not in existence when the decree was made. On the just and equitable ground, failure of a family arrangement alone was insufficient; the company's substratum had not disappeared, the estate remained in existence and possession, and no true deadlock was shown. The company was therefore not ordered to be wound up.

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Issues: (i) Whether the company was unable to pay its debts so as to justify winding up on that ground. (ii) Whether it was just and equitable that the company should be wound up.

Issue (i): Whether the company was unable to pay its debts so as to justify winding up on that ground.

Analysis: The petitioners could not rely on the statutory presumption because the statutory notice was not shown to have been duly served at the registered office. On the merits, the alleged debts were not established as undisputed debts. The claim of the attorneys was treated as bona fide disputed, and the claim based on the consent decree was considered doubtful against a company that was not in existence when the decree was made.

Conclusion: The issue was decided against the petitioners and in favour of the company.

Issue (ii): Whether it was just and equitable that the company should be wound up.

Analysis: The failure of the family arrangement did not by itself justify winding up. The substratum of the company had not disappeared, as the estate continued to exist and remained in the company's possession. No complete deadlock was shown, and the dispute among family groups did not displace the ordinary principle that dissatisfied shareholders should secure control through the majority rule rather than seek winding up.

Conclusion: The issue was decided against the petitioners and in favour of the company.

Final Conclusion: The petition for compulsory winding up failed on both grounds, and the company was not ordered to be wound up.

Ratio Decidendi: A winding up petition will fail where the alleged debts are bona fide disputed or the statutory foundation for presuming inability to pay is absent, and a private company will not be wound up as just and equitable unless its substratum has gone or a true deadlock makes continuation impossible.

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