This is an application under the provisions of the Indian Companies Act by a cre­ditor bank for a winding up order on the debtor bank. The material facts are not seriously in dispute. On 29th November 1947, a demand draft for ES. 4200 was issued by the Srimangal branch of the opposite party bank on its Sylhet Bazar branch in favour of Mrs. Madhuri Singh Boy. This draft was duly endorsed by Mrs. Madhuri Singh Roy in favour of Anuj Chaudhury pre­sented the demand draft to the petitioner bank and subsequently the petitioner bank presented it to the opposite party bank. Payment was refused by the opposite party bank with the statement "payment stopped by the Drawer." Thereafter a demand notice under S. 163, cl. (l), Companies Act was served by the petitioner bank on the opposite party bank, Correspon­dence ensued, and in course of subsequent correspondence the opposite party bank explained why they refused payment. No payment was made by the opposite party bank. Thereafter an application was filed by the petitioner bank and it was contended that the provisions of S. 163, cl. (l), Companies Act having been complied with, the opposite party bank should be deemed to be unable to pay its debts and, therefore, a winding up order should be passed. In support of the application, the learned Advocate contend­ed that the opposite party bank had no justifi­cation at all for refusing to honour the demand draft issue drawn on to its Sylhet branch, and that inasmuch as the provisions of S. 163, cl. (l), Companies Act had been complied with, this application should be admitted and proceed­ings for winding up of the bank should conti­nue. [2] An affidavit in opposition has been filed by the opposite party bank. The whole expla­nation and the reasons why the payment in respect of the demand draft was refused have been given in the affidavit. In the allegations made in the affidavit, it is asserted that the de­mand draft was obtained by fraud and the Manager of the petitioner bank was a party to the fraud; that the petitioner bank is not a bona fide transferee of the demand draft but is a person who was in conspiracy with the holder of the demand draft and offered cheques to the opposite party bank, which were subsequently dishonoured. It seems to me obvious from the affidavit in opposition and from the further affidavit filed by the petitioner bank that the opposite party bank does honestly believe that the demand draft was obtained by fraud and that the petitioner bank was a party to the fraud and that the opposite party bank does believe, rightly or wrongly that it was justified in refusing to make the payment. In my opinion, when a debtor company believes even wrongly that it is justified in law to refuse to pay, such a refusal cannot be regarded as neglect to pay as contemplated by s. 163 (l), Companies Act. I find that this view is also taken in the case of Tulsidas Allubhai v. Bharat Khand Cotton Mills Ltd., 39 Bom, 47 : (A. I. B. (l) 1914 Bom. 251). [3] On the facts set out in the various affidavits in this case, I am satisfied that there is a real dispute as to the liability of the respondent bank to pay this debt, and that the dispute put forward is not merely -a cloak to hide the Com­pany's inability to pay its debts. [4] In these circumstances, it seems to me that this application ought not to be admitted and I direct that the application be rejected. [5] I make no order as to costs. Application rejected.