Disputed and premature debt claims cannot trigger winding up jurisdiction where contractual liability remains unresolved.

A winding up petition for inability to pay debts is not maintainable where the alleged liability is disputed, not presently payable, and depends on adjudication of contractual rights and obligations. The claim for prize money and refund of instalments turned on disputed issues concerning acceptance of security, the company's discretion to demand further security, and when any refund became due. Because the debt was not admitted and required a full contractual inquiry, the company court could not use winding up proceedings to determine the underlying liability.

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Issues: Whether a company petition for winding up under section 433(e) read with section 434(1)(a) of the Companies Act, 1956 was maintainable when the alleged debt was disputed and the claim was premature.

Analysis: A winding up petition on the ground of inability to pay debts cannot be sustained where the alleged liability is not an admitted debt and would require investigation into the rights and obligations arising under the contract. The claim for prize money and for refund of instalments depended on disputed questions as to acceptance of security, the company's contractual discretion to demand further security, and the point of time when any refund became payable. The petitioner's demand was therefore not for a debt payable on demand, and the company court could not adjudicate upon the disputed contractual liability in winding up proceedings.

Conclusion: The petition was not maintainable and the dismissal was in favour of the respondent.

Final Conclusion: A disputed and premature claim cannot be used to invoke the winding up jurisdiction for inability to pay debts.

Ratio Decidendi: Winding up jurisdiction under section 433(e) read with section 434(1)(a) cannot be invoked where the alleged debt is disputed, not presently payable, and can be determined only after a full adjudication of contractual rights.

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