Bona fide dispute in winding-up: denial found not bona fide and petitioners' creditor claims upheld, petition allowed.

Whether petitioners were creditors and whether the company's denial constituted a bona fide dispute: the court held the entries, renewal/acceptance letters and board resolution amounted to acknowledgements of liability, restarting limitation and showing the deposit was payable on demand; the company's denial was found not bona fide but dishonest. Because the company had ceased business and opponents failed to show creditor benefit from continuation, the petitioners were treated as creditors and the winding-up petition was allowed in their favour.

---

---

Issues: Whether the petitioners are creditors of the company and whether the company's denial of liability constitutes a bona fide dispute sufficient to defeat a winding-up petition.

Analysis: The petitioners claimed repayment of an agency deposit (renewed and treated as a fresh deposit) entered in the company books and subsequently allocated to a suspense account in respect of V.V. Krishnier Sons. The company disputed the claim and raised limitation, but the board resolution ratifying the suspense-account entries and the balance-sheet entries for the year ending 31 March 1964 constituted acknowledgements of liability under Section 18 of the Limitation Act, 1963, giving a fresh starting point for limitation. The renewal/acceptance letters (exhibits D-1 and D-2) and the entries and board resolution (exhibits P-11, P-14(a) and P-4(r)) show the deposit was payable on demand and that the company treated the amount as due to the petitioners or V.V. Krishnier Sons. The court found the company's denial to be not bona fide but dishonest, noting the company had ceased business, the provisional liquidator had realised assets, and the company could not reasonably resume business; opponents' objections merely echoed the director-opponent and did not demonstrate benefit to creditors by allowing the company to continue.

Conclusion: The petitioners are creditors and the company's denial is not a bona fide dispute; the winding-up petition is allowed in favour of the petitioners.

---