This company petition has been filed for winding of the respondent No.1 Mohijuli Tea Company due to its failure to pay dues. The first petitioner is a company incorporated under the Companies Act, 1956 with its registered office at Gmvahati. The 1st respondent is also a company incorporated under the Companies Act. 2. According to the petitioners this company was incorporated in the month of March/April, 1993. Mrs. Rumena Rahman, Mr. Adilur Rahman, Miss Nilofer Rahman and Atikul -Rahman are the subscribers. As per clause III (A) (1) of the Memorandum of Association of the respondent No. 1, the main object is to acquire and take over as a going concern of the proprietorship business carried under the name and style of Mahaluxmi Tea Estate at Sootia, Assam with all its assets and liabilities of the concern at agreed value. 3. On 26.2.91'the said Mahaluxmi Tea Estate entered into an agreement with the petitioner corporation regarding/die purchase of green tea leaves produced in one of its tea gardens, viz. Bnolaguri Tea Estate. As per the said agreement Mahaluxmi Tea Estate respondent No.2 would purchase approximately 8 lakh Kgs of green tea leaves from the said Bholaguri Tea Estate in the year 1991 at the rate agreed upon. It was also stipulated that the petitioner corporation would submit bills to Mahaluxmi Tea Estate accompanied by receipted challans for green leaves as delivered to the said tea estate. Mahaluxmi Tea Estate would then make payment within 7 days in favour of the United Bank of India, Guwahati A/c Assam Tea Corporation Ltd to which the crops of Bholaguri Tea Estate was hypothecated. If the payment was not made within 7 days an interest @ 18.5% would be charged. 4. Pursuant to the said agreement, the petitioner corporation supplied green tea leaves to Mahaluxmi Tea Estate from time to time and the said tea estate accepted the green tea leaves by signing receipted challans. The petitioner, thereafter, raised bills from time to time and the amount of bills so made came upto Rs. 13,94,771.92. Although as per the terms of the contract the petitioner corporation submitted bills, but the said Mahaluxmi Tea Estate failed/neglected to pay its dues. Besides, two cheques were issued in favour of the petitioner corporation on 1.10.91 and 12.11.91. The cheques were, however, bounced and no payment was received by the corporation. 13,94,771.92. Although as per the terms of the contract the petitioner corporation submitted bills, but the said Mahaluxmi Tea Estate failed/neglected to pay its dues. Besides, two cheques were issued in favour of the petitioner corporation on 1.10.91 and 12.11.91. The cheques were, however, bounced and no payment was received by the corporation. Thereafter, the said garden showed complete indifference towards payment of its dues to the petitioner corporation. There was no response to the numerous correspondence including lawyers notice from the side of the respondents. This had created considerable difficulties for the petitioner. The total principal dues against the supply of green leaves payable by the respondents to the petitioner corporation was Rs. 16,99,771.92. Out of the aforesaid amount, the respondents paid Rs.3 lakhs. There was also a sum of Rs.5,000/- as earnest money paid by the respondents to the petitioner. Taking both together the respondents had paid a sum of Rs.3,05,000/-. The total amount thus due by the garden to the petitioner was Rs. 13,94,771.92. This amount was not paid by the garden in spite of reminders. As per the agreement, the garden was also liable to pay cess on green tea leaves @ Rs.0.50 paisa. Calculating the said cess @ Rs.0.50 paisa per Kg on the 6,53,807 Kgs of green leaves the total amounts of cess comes to Rs.3,26,903.60. Besides, according to the petitioner the garden was also liable to pay interest at the rate of Rs. 18.5% per annum for the delayed payment or non-payment of the bills as per the terms of the agreement. Calculating interest @ 18.5% the amount comes to Rs.4,67.764.01. In all Rs.21,89,439.53 became due. In spite of several reminders the garden failed to pay the amount. Situated thus the petitioner corporation through its lawyer issued Annexure 6 notice dated 25.1.93 to the proprietress of the said tea estate demanding payment of the amount. It was also informed-by the said notice that in case the garden failed to pay. appropriate action would be taken. Ms. Rumena Rahman, the proprietress of the garden was also one of the Directors of the respondent No. 1 company. As the said garden still failed or neglected to pay the amount another notice was issued by the corporation through its Advocate to respondent No. 1 company as well as Rumena Rahman. appropriate action would be taken. Ms. Rumena Rahman, the proprietress of the garden was also one of the Directors of the respondent No. 1 company. As the said garden still failed or neglected to pay the amount another notice was issued by the corporation through its Advocate to respondent No. 1 company as well as Rumena Rahman. In that notice also it was clearly mentioned that in case of failure to pay the amount the petitioner corporation would take necessary steps in this Court for winding up of respondent No. 1 company. In spite of that respondents failed or neglected to pay the amount due. At no point of time the respondents disputed the amount when the notice were served. Having failed to get the money the petitioner corporation has filed the present petition for winding up the respondent No.1 company. 5. An affidavit-in-opposition has been filed by the respondents. In the said affidavit, however, the respondents have denied the averments made by the petitioner. In their affidavit-in-opposition respondents have stated that the quality of green leaves was not upto the standard and such supply of sub-standard green tea leaves was from the very beginning of the arrangement. The garden authority had pointed out the same from the very beginning. The garden paid the amount only due to-the assurance given by the petitioner corporation that they would look into the matter. But the petitioner corporation in spite of such assurance was preparing bills at their own ways and demanded exorbitant amount. All the amounts shown in paragraph 6 of the petition were not the correct amounts and so the respondents were not liable to pay any amount. As there was no delay in making the payment, the question of payment of interest would not arise at all. Bills were prepared contrary to the agreement and so the respondents were not liable to pay the amount as claimed. The respondents have denied and repudiated the claim. They have also stated that Mahaluxmi Tea Estate and petitioner corporation entered into an agreement on 26.2.91 for plucking of green tea leaves. Pursuant to the said agreement taking of green tea leaves commenced from March, 1991 in Bholaguri Tea Estate and during 1.3.91 to 15.3.91 about 6,371 Kgs. of green tea leaves were delivered to said Mahaluxmi Tea Estate. Accordingly bill for Rs.42,058 was sent to Mahaluxmi Tea Estate on 15.3.91. Pursuant to the said agreement taking of green tea leaves commenced from March, 1991 in Bholaguri Tea Estate and during 1.3.91 to 15.3.91 about 6,371 Kgs. of green tea leaves were delivered to said Mahaluxmi Tea Estate. Accordingly bill for Rs.42,058 was sent to Mahaluxmi Tea Estate on 15.3.91. After receiving the bill Mahaluxmi Tea Estate immediately paid the amount deducting a sum of Rs.3,085.50 paisa for Assam Tax. Thereafter, from 16.3.91 to 31.3.91 the petitioner company delivered green tea leaves to the respondent No.2 about 22,206 Kgs of green tea and accordingly a bill for Rs. 1,48,336.08 was sent on 31.3.91. After receiving the aforesaid bill the payment was also made by a cheque dated 11.4.91 for Rs. 1,37,233.08 after deducting 0.50 per Kg against taxation. The respondents have also stated that after receipt of the aforesaid green leaves and after processing, it was found that the green tea leaves supplied by the petitioner corporation was not of standard quality and so the respondent No.2 reminded the petitioner to supply standard green leaves and for the same the representative of the garden went to petitioner No.2 tea garden but in spite of that they could not improve the quality of the green tea leaves and only assured that the quality would be improved. From the affidavit-in-opposition it will appear that the respondents now say that the quality of the tea leaves was sub-standard and therefore, every time when the inferior tea leaves were received, the respondents informed the petitioner corporation about it. There were Various correspondences between the parties. Every time as per the affidavit-in-opposition, the petitioner corporation assured to supply quality tea, this was, however, not actually complied with. Annexure 2 letter dated 23rd of May, 1991 by which the proprietress Mrs. R. Rahman wrote to the General Manager, Assam Tea Corporation Ltd regarding the quality. I quote relevant portion of the said letter: "... We would request you to let us know what your observations are about the quality of Green Leaf being supplied to us after your personal visit to the Garden, in the meantime if you require we could also send you a sample of the type of leaf being supplied to us for your observation and assessment." Annexure III letter was also issued to the Managing Director of the petitioner corporation. This letter is dated 2.8.91. This letter is dated 2.8.91. Relevant portion of the said letter is quoted below: "We regret to inform you that we have been receiving very bad quality of green leave from your Bholaguri Tea Estate from the date of purchasing, although we have brought this to your notice on several occasions requesting you to take up this matter with your garden concerned and advise them to supply us quality leaf. But no action so far has been taken from your end till date. In this connection we have already sent you some samples of green leaf for your ready reference and you were also agreeable to take proper action in this matter. It is very important to mention here that the recovery percentage is 18.25% and we could hardly manufacture only 1 Kg made tea from 5 Kgs Bholaguri green leaf. The made tea quality is also very dull and containing high percentage of fiber resulting in very low standard of manufacture and realising very low prices in comparison to our standard of manufacturing. Unless the quality of green leaf is improved we will not be in a position to manufacture good quality tea covering the manufacturing cost." 6. Reply affidavit has also been filed by the corporation. In the said reply affidavit, petitioner corporation has stated that the allegation that the representative of the respondent company pointed out about the supply of sub-standard quality from the very beginning was entirely incorrect as would appear from the challans annexed to the company petition. It would be apparent from the said challans that no objection was raised by the garden authorities who took delivery of the green tea leaves. Further, the petitioner corporation also denied that sub-standard green tea leaves were supplied to the garden and that bills with exorbitant amount were raised. 7. I heard both sides. 8. Mr. Yadav, learned counsel for the respondent submitted that the green leaves were not supplied in accordance with the terms of the agreement. Those leaves were sub-standard. Mr. Yadav submitted that the company raised a bonafide dispute from the very beginning by writing letters that the goods supplied were not as per the specifications and, therefore, the present application was not maintainable. While arguing Mr. Yadav, however, could not show anything from record that the green leaves were sub-standard. Those leaves were sub-standard. Mr. Yadav submitted that the company raised a bonafide dispute from the very beginning by writing letters that the goods supplied were not as per the specifications and, therefore, the present application was not maintainable. While arguing Mr. Yadav, however, could not show anything from record that the green leaves were sub-standard. The learned counsel also submitted that there was no proper advertisement within the meaning of Companies (Court) Rule 25. 9. Mr. SN Sarma, learned counsel appearing on behalf of the petitioner corporation, on the other hand, submitted that this was a fit case for winding up the company as the company failed to pay the money due to the petitioner corporation. The learned counsel also had drawn my attention to a letter written by the Managing Director of the petitioner corporation to the garden. In the said letter it was specifically mentioned mat if the company was not satisfied with the standard, the company could discontinue the arrangement for supply of tea leaves. In spite of that the garden continued to receive tea leaves supplied by the corporation from its Bholaguri TE thereafter. According to him this itself was sufficient to indicate that the quality of goods supplied by the corporation was to the satisfaction of the garden authority. Learned counsel also emphasised that there was no dispute whatsoever regarding the quality of the tea leaves supplied and, therefore, failure to make the payment was a good ground for winding up of the respondent No. 1 company. 10. Regarding defective advertisement contrary to Companies (Court) Rule 25 as submitted by Mr. Yadav, Mr. Sarma submitted that the Companies (Court) Rule 25 was not applicable in the present case. He further submitted that in a winding up proceeding provisions of Chapter III of the Companies (Court) Rules are applicable and more specifically Companies (Court) Rule 95 and, therefore, according to Mr. Sarma, the submissions of Mr. Yadav were not tenable at all so far the advertisement was concerned. 11. On the rival contentions of the parties it is to be seen whether respondent company can be wound up under the provisions of section 43 5 read with section 437. 12. Sarma, the submissions of Mr. Yadav were not tenable at all so far the advertisement was concerned. 11. On the rival contentions of the parties it is to be seen whether respondent company can be wound up under the provisions of section 43 5 read with section 437. 12. Section 434 of the Companies Act provides that a company shall be deemed to be unable to pay its debt if a creditor for a sum exceeding Rs.500/- I makes a demand for payment and the company neglects to pay for three weeks thereafter or the company neglects to secure the same or the company neglects to compound the same to the reasonable satisfaction of the creditor. The demand must be in writing signed by the creditor or his agent. The word 'neglect' means an omission without any reasonable cause. However, non-payment of bonafide disputed debts does not amount to neglect within the meaning of the said section. Existence of a prima facie valid counter claim of the company would constitute a reasonable excuse for non-payment and such non-payment will not amount to neglect. Neglect to pay must be for a minimum period of three weeks from the date of receipt of the demand notice by the company. Before passing an order for winding up the Court must be satisfied that the company is actually unable to pay the debt. In deciding the question as to whether the company is unable to pay or not, the Court is required to take into account the existing, contingent and the existing and prospective assets. 'Bonafide dispute' means that the dispute is based on some substantial ground. Where a debt is bonafide disputed and substantial questions are raised, the Court will decline to pass any order for winding up. It is now well settled that when a debt is bonafide disputed, no petition for winding up lie even if there is an admitted debt. The expression "unable to pay its debt" is to be taken in the commercial sense of being unable to meet the current demands though the company may be otherwise solvent. The fact that the liability exceeds the assets does not necessarily show that the company is unable to pay debts. The expression "unable to pay its debt" is to be taken in the commercial sense of being unable to meet the current demands though the company may be otherwise solvent. The fact that the liability exceeds the assets does not necessarily show that the company is unable to pay debts. Proper test would be whether the company's existing liabilities are such as to make the Court feel satisfied that the existing or probable assets would be insufficient to meet the existing liabilities. Where a company fails to comply with the statutory notice but subsequently denied liabilities to pay the petitioners, creditor made their counter claim in respect of the loss on account of negligence of the petitioner petitioning credit which appears to be legally tenable no winding up order should be made and the petitioner and the petitioning creditor should be asked to seek its remedy in civil Court. 13. The admitted fact in the present petition is that the petitioner corporation supplied green tea leaves to Mahaluxmi Tea Estate, a proprietorial concern as per 'agreement dated 26.2.91 entered into by and between the petitioner corporation and the said Mahaluxmi Tea Estate. Under the agreement, tea leaves of Bholaguri Tea Estate of the petitioner corporation were to be supplied to said Mahaluxmi Tea Estate and the corporation was to submit bills to said tea estate with receipted challans and the tea estate was to pay the amount within 7 days. Pursuant to the said agreement the garden of the corporation supplied green tea leaves worth Rs. 13,94,771.92. However, payments were not made as agreed upon. The respondents thus neglected and failed to pay the dues to the petitioner corporation. One of the objects of the 1st respondent company was to acquire and take over Mahaluxmi Tea Estate as a going proprietorial concern. The agreement was entered into by the petitioner corporation with the aforesaid tea estate for supply of green tea leaves at a rate agreed upon under the terms and conditions. 14. Now the question is if the 1st respondent company which took over the garden from its erstwhile owners with liabilities of said Mahaluxmi Tea Estate would be liable to pay the debt and whether petitioner corporation can insist on payment. Admittedly the liability to make the payment was with the said Mahaluxmi Tea Estate and in the said agreement the 1st respondent company was not a party. Admittedly the liability to make the payment was with the said Mahaluxmi Tea Estate and in the said agreement the 1st respondent company was not a party. 15. One of the objects of the Memorandum of Association of respondent No.1 company was to acquire the property of Mahaluxmi Tea Estate with liabilities and in fact the 1st respondent company acquired the said tea estate. That by itself is not sufficient to make the 1st respondent responsible for payment under the said agreement. If the property of the said tea estate was acquired by the company on some arrangements which were not known to the Court, this can at best be said to be the arrangements between the 1st respondent company and the erstwhile owners of the tea estate. Any breach of the conditions, can be taken either by the 1st respondent company or by the erstwhile owners. Petitioner corporation does not get any right to insist upon payment of the due by the aforesaid tea estate which at the material time belonged to the erstwhile owners of the said tea estate. Attempt was made to show that the erstwhile owners of the said tea estate became the subscribers of the company. But, in my opinion, that will not change the position and the petitioner corporation cannot insist on payment of the amount due by the aforesaid Mahaluxmi Tea Estate. Therefore, the amount due by the said tea estate cannot be said to be debt against the respondent No. 1. In view of the above, I am of opinion that the 1st respondent company is not in debt of the petitioner corporation. That being so, the question of the 1st respondent company being unable to pay debt does not arise at all. In that view of the matter, the application for winding up is not maintainable. 16. The contention of Mr. Yadav that there was no proper advertisement in terms of the Companies (Court) Rule 25, in my opinion, has no substance inasmuch as the provisions of Companies (Court) Rule 95 is applicable in the present case. 17. Even assuming that because of the arrangement the liability to pay the amount by the said tea estate for supply of tea leaves actually transferred to the respondent, whether the respondent company is liable to be wound up for failure to make payment. 17. Even assuming that because of the arrangement the liability to pay the amount by the said tea estate for supply of tea leaves actually transferred to the respondent, whether the respondent company is liable to be wound up for failure to make payment. In the affidavit-in-opposition filed by the respondents, respondents have categorically stated that the aforesaid Bholaguri Tea Estate of the petitioner corporation supplied sub-standard tea leaves. In this respect there were several correspondences by which the erstwhile owners of Mahaluxmi Tea Estate informed the petitioner corporation. Letter dated 23.5.91 issued for and on behalf of the proprietress and the letters dated 2.9.91 and 7.10.91 are some of the correspondences. These correspondences indicate that the tea garden raised dispute regarding the quality of the tea leaves supplied. 18. From all these it only indicates that there was a dispute regarding the standard and quality of tea leaves and this dispute appears to me to be bonafide dispute raised by the garden authority from the very beginning of the arrangement. Whether these are actually correct or not cannot be determined in this application for winding up. 19. In view of this, in my opinion, there is no case on merit also. Accordingly, I dismiss this petition.