Bona fide debt dispute and balance-sheet acknowledgements can keep a winding-up petition alive despite limitation and collateral objections.

Repeated acknowledgements of liability in a company's balance-sheets and correspondence were treated as sufficient to support a prima facie debt claim in winding-up proceedings. The company's denial of the debt was found not bona fide or reasonable, so the petition was not stayed or dismissed on that ground. The limitation objection was rejected because the proceeding was not a suit for enforcement of mortgage security, and the acknowledgements extended limitation. The pending suit at Darjeeling and the earlier advertisement order did not bar the application, and the winding-up petition was allowed to proceed.

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Issues: Whether the company had shown a bona fide dispute regarding the debt so as to justify stay or dismissal of the winding-up petition, whether the debt was barred by limitation, and whether the pending suit and prior advertisement order barred the application.

Analysis: The debt pleaded in the winding-up petition was supported by annexed correspondence and balance-sheet entries showing repeated acknowledgement of liability. Those acknowledgements were treated as part of the pleading and were sufficient to raise a prima facie case for investigation in winding-up proceedings. The company's denial of the debt was held not to be bona fide or reasonable. The limitation objection was rejected because the proceeding was not a suit for enforcement of mortgage security, and the balance-sheet acknowledgements extended limitation. The pending suit at Darjeeling and the earlier order directing advertisement did not create a bar to the present application.

Conclusion: The application for stay or dismissal of the winding-up petition was rejected.

Final Conclusion: The winding-up petition was allowed to proceed, and the company's attempt to halt the proceedings failed.

Ratio Decidendi: Repeated acknowledgements of liability in a company's balance-sheets can constitute sufficient acknowledgement of debt for limitation purposes and, where the denial of debt is not bona fide, a winding-up petition may proceed despite collateral objections and related litigation.

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