Summary winding-up inappropriate where a tenable defence requires full adjudication; petitioner permitted to pursue recovery in civil suit.

Summary winding-up under the Companies Act was declined where the petitioner alleges unpaid sums and dishonoured cheques but the company raises a tenable defence of returned sub-standard goods; the court found the precise determination of liability requires detailed adjudication unsuitable for a summary winding-up petition and better addressed in a civil suit, and accordingly refused to order winding up while granting liberty to pursue recovery by ordinary suit.

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Issues: Whether the High Court should exercise its discretion under Section 433(e) and (f) read with Sections 434(1)(a) and 439(1)(b) of the Companies Act, 1956 to wind up the respondent-company in a summary petition.

Analysis: The petition alleges unpaid sums and dishonoured cheques while the company contends that supplied goods were returned as sub-standard and that a tenable defence exists affecting ultimate liability; the determination of precise liability requires more detailed adjudication than is possible in a summary winding up proceeding and is more appropriately pursued in a properly framed civil suit.

Conclusion: The petition for winding up under the cited provisions of the Companies Act, 1956 is rejected and no order for winding up is made; petitioner is granted liberty to pursue recovery in a civil suit.

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