Winding-up petitions must plead a disclosed debt and may be refused where supporting creditors reasonably oppose liquidation.

A winding-up petition based on deemed inability to pay must disclose enough particulars of the alleged debt and consideration to show prima facie that a debt exists, is due, and remained unpaid after statutory notice; a vague pleading may be vulnerable if the company does not appear, though the defect may lose significance where the claim is expressly admitted. The court also noted that, even where the debt is not genuinely disputed, winding up remains a discretionary remedy: the judge must consider whether supporting creditors' wishes are based on reasonable grounds and whether liquidation would benefit creditors generally. On the facts described, the supporting creditors' opposition, together with indications of commercial solvency, justified refusal of winding up.

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Issues: (i) Whether a winding-up petition based on non-compliance with a statutory notice under the Companies Act, 1956 must disclose sufficient particulars of the alleged debt and consideration so that the petition is a speaking petition and maintainable; (ii) Whether the debt was genuinely disputed and, if not, whether the court should nevertheless refuse winding up having regard to the wishes of the supporting creditors and the commercial solvency of the company.

Issue (i): Whether a winding-up petition based on non-compliance with a statutory notice under the Companies Act, 1956 must disclose sufficient particulars of the alleged debt and consideration so that the petition is a speaking petition and maintainable.

Analysis: A petition founded on deemed inability to pay under the statutory notice provisions must disclose the basis of the claim so that the court can prima facie see that a debt exists, that consideration supports it, that it is due, and that default occurred after service of notice. The court noted that such particulars may appear either in the body of the petition or in the annexed notice, and that a vague recital may be insufficient if the company does not appear. In the present case, however, the deficiency lost practical significance because counsel for the company expressly admitted the claim before the company judge.

Conclusion: The petition was not rejected on this ground in the appeal, and the objection to maintainability did not prevail against the appellant.

Issue (ii): Whether the debt was genuinely disputed and, if not, whether the court should nevertheless refuse winding up having regard to the wishes of the supporting creditors and the commercial solvency of the company.

Analysis: The alleged dispute covered only a small part of the claim, while the balance stood admitted. More importantly, the company had later unqualifiedly admitted the creditor's claim and had entered into consent terms. On the question whether winding up should follow, the court applied the principle that the discretion under section 557 must be exercised judicially by considering the wishes of creditors proved by sufficient evidence and asking whether those wishes rest on reasonable grounds and whether winding up would benefit creditors generally. The supporting creditors were found to represent substantial value, their affidavits disclosed a rational preference against winding up, and the materials on record indicated that the company was commercially solvent and capable of meeting liabilities, including by immediate payment out of the deposited funds. No special circumstance was shown to justify a winding-up order despite that opposition.

Conclusion: The court held that the wishes of the supporting creditors were reasonable and should prevail, and that a winding-up order ought not to be made.

Final Conclusion: The order for winding up was set aside, the petition for winding up was dismissed, and amounts payable to the petitioning and supporting creditors were directed to be satisfied from the deposit in court.

Ratio Decidendi: In a winding-up petition based on deemed inability to pay, the court must require a sufficiently disclosed debt and may refuse winding up in the exercise of discretion where the wishes of a substantial body of creditors, supported by evidence of commercial solvency and lack of benefit to creditors generally, reasonably oppose liquidation.

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