Ramaprasada Rao, J.-This appeal is directed against the judgment and decree of Sethuraman, J., who refused to wind up a company which was sought to be wound up on an application filed by the appellant as petitioning-creditor on the only ground that the respondent-company is unable to pay its debts. The appellant firm is a partnership. It seeks for winding up of a private limited company. The promoters of the company were S. K. Somani and his wife Hemalatha. His two brothers, N.K. Somani and M. K. Somani are the directors of the respondent-company. They vacated at one particular point of time since they did not have the requisite qualifications to hold the office. The case of the petitioning creditor as disclosed in the petition is as follows: In or about January, 1971, S. K. Somani, one of the promoters of the respondent-company started a business under the name and style of ‘Shadiram and Sons’ as guardian of his minor son. This firm at some point of time, due to certain civil proceedings between S.M. Somani and his brothers, was converted into a partnership. Accordingly a partnership was formed with the wives of the two brothers and the minor son of S. K. Somani who was admitted to the benefits of the partnership. This partnership came into effect on 1st April, 1974. Even on a fair appreciation of the constitution of the partnership firm and the private limited company, it is fairly clear that one is telescope cable into the other and some of the members of the family or their wives were interested either in the partnership or in the private limited company. There were transactions between the private limited company and the partnership firm. It is claimed that a sum of Rs. 4,47,511-58 was payable by the company together with interest at 12 per cent. per annum and a statutory demand was made as against the company for repayment of the same and as the reply thereto by the company was not satisfactory, the appellant came up with an application under section 433 of the Companies Act for winding up of the company under section 433 (e) of the Act. The debt is not in dispute by the company but their case is one of discharge. The debt is not in dispute by the company but their case is one of discharge. They would say (and this was their case even in the reply to the statutory notice as is seen from Exhibit R-16) that a sum of Rs. 1,50,000 was paid by the company to one Hanuman Steel Traders for the supply of M. S. Plates and B. P. Sheets to the partnership firm (petitioning creditor); a further sum of Rs. 46,000 was paid to the Calcutta branch of the petitioner firm towards their dealings which this branch had with them ; and by payment of a sum of Rs. 2,51,511-28 to Hemalatha Somani, the wife of one of the promoters of the company in adjustment of certain inter se transactions to which we shall presently refer, no amount as claimed was due. The petition for winding up was thus opposed mainly on the ground that the debt was no longer subsisting as according to the company it has been discharged by payment to the creditors of the partnership or to those who are interested in getting moneys from the partnership, and thus there is a dispute which is obviously bona fide as regards the existence of the debt itself. The appellant firm did not let in any evidence, but chose to cross-examine S. K. Somani who was examined on behalf of the company. The main case of the petitioning creditor is that the plea of discharge is a myth and a falsehood. The learned Judge who went into the question found that the evidence did not make out prima facie the substratum of their objections, and on a fair appreciation of the oral and documentary evidence let in it could not be said that there was no bona fide dispute as regards the debt claimed by the petitioning creditor and that in those circumstances the winding up of the company cannot be ordered as in his judicial discretion he felt it inequitable to do so. The question is whether the plea of discharge which has been raised by the respondent-company, the sum and substance of which has been accepted by the learned trial Judge is acceptable. 2. The question is whether the plea of discharge which has been raised by the respondent-company, the sum and substance of which has been accepted by the learned trial Judge is acceptable. 2. One of the circumstances in which a company may be wound up by the Court as provided in section 433 of the Companies Act is that the company may be wound up by the Court if the company is unable to pay its debts. Here also a judicial discretion is vested in the company Court while effacing the corporate existence of a company. The word ‘debt’ used in sub-clause (e) has to be understood in a practical and pragmatic sense. As the existence of the company Court cannot be sought for realisation of the debts due by a creditor or for its enforcement under the guise of a petition for winding up, caution should be observed in a case where the main objection to the petition to wind up is that the debt is disputed. A given case might present a slight complication if the debt is admitted, but discharge is pleaded. Undoubtedly, in a case where the allegation is that the debtor-company is indebted and is unable to pay its debts, the initial burden is on the petitioning creditor who alleges the existence and reality of such a debt. But, when the debtor-company admits the debt and raises a plea of discharge either in part or in whole of the debt claimed, then the burden of proof normally shifts to the debtor-company to prove such a discharge at least to the extent pleaded so as to satisfy the Court that the debt as claimed is not due and that, therefore, there is a bona fide dispute by the company regarding the existence of such a debt. In such circumstances, it is for the company Court to discover through a reasonable line of investigation whether the plea of discharge is totally unfounded and is utterly baseless and is only a ruse to abuse the winding up provisions provided for by the statute or whether there is any substratum of truth in it. In such circumstances, it is for the company Court to discover through a reasonable line of investigation whether the plea of discharge is totally unfounded and is utterly baseless and is only a ruse to abuse the winding up provisions provided for by the statute or whether there is any substratum of truth in it. If on such an enquiry it comes to a reasonable conclusion not by astute reasoning but by a. prima facie examination of the evidence and the records produced that the discharge pleaded can be true, then it obviously follows that there is a bona fide dispute regarding the debt as raised by the company. The guiding principles have been well laid by decided cases and it appears to us that if in a particular case the evidence is such that there is a prima facie proof on which the defence of discharge is available and a reasonable possibility of their success is, then, in a properly instituted action by the petitioning creditor for recovery of such a disputed debt, and above all, if the plea of discharge is not without any reasonable substance but raised in good faith then it is by now well settled that the Court will not wind up that company. In fact, the Supreme Court in Amalgamated Commercial Traders, Limited v. Krishnaswami1, observed as follows:- “If a petitioning creditor in such circumstances is encouraged, then the petition filed by him would be an ostensible one seeking for a winding up order, but really to exercise pressure and therefore ought to be dismissed, since it may be stigmatised as a scandalous abuse of the process of the Court”. We shall now examine the three heads under which the plea of discharge is raised. The first item is a sum of ;Rs. 1,50,000. The company produced a receipt, dated 5th May, 1971, said to have been executed by a person employed in Hanuman Steel Traders. (The discussion of evidence is omitted: Ed.) * * * * We therefore find that there is prima facie evidence that the company did pay a sum of Rs. 1,50,000 on behalf of the appellant firm to Hanuman Steel Traders. 3. The next item is a sum of Rs. 46,000 which amount is said to have been sent by the limited company to the Calcutta Branch of the appellant firm........ 1,50,000 on behalf of the appellant firm to Hanuman Steel Traders. 3. The next item is a sum of Rs. 46,000 which amount is said to have been sent by the limited company to the Calcutta Branch of the appellant firm........ There is nothing strange in accepting the version of the director of the company sought to be liquidated that he paid a sum of Rs. 46,000 in answer to the call money by the branch office of the appellant firm from Calcutta. 4. The third item relates to the adjustment made and it was to the extent of Rs. 2,51,522-28. (The discussion of evidence is omitted: Ed.) * * * * These answers were brought out in cross-examination. The debt due by the appellant firm to Hemalatha Somani is not in dispute. The company pleads adjustment by transfer. This would mean that the claim made by the petitioning creditor in the statutory notice would automatically be reduced by a sum of Rs. 2,50,000 and odd, and it was adjusted by the company towards the debts due by the partnership firm to Hemalatha Somani. It was this which was considered by the learned Judge and he was right in having accepted the prima facie case of adjustment of the credit in favour of Hemalatha Somani by the company as it was done at the instance of Hemalatha Somani herself. * * * * All these factors taken together lead to the conclusion that the debt as claimed by the appellant firm has been rightly disputed bona fide by the company. 5. We have already referred to the important ingredients which ought to be pleaded and proved in a company petition for winding up of an incorporated company on the ground that it is unable to pay its debts. The existence of the debt alone may not be sufficient as in the instant case the defence was one of discharge. If a plea of discharge is set up as already stated by us and if it is prima facie established it implies that the debt as claimed is disputed. The jurisdiction to wind up a company incorporated under the Companies Act is discretionary and all the circumstances have to be considered by the company Court before it exercises its judicial discretion to efface the existence of a corporate body. The jurisdiction to wind up a company incorporated under the Companies Act is discretionary and all the circumstances have to be considered by the company Court before it exercises its judicial discretion to efface the existence of a corporate body. We are not satisfied that the debt as claimed by the petitioning-creditor and on the foot of which this petition for winding up was filed under section 433 (e) of the Companies Act is sustainable. This is because there is a bona fide dispute about the existence of the debt and its quantum. The learned Judge rightly dismissed the application for winding up. The appeal fails and is dismissed. No costs.