Judgment P. K. Deb, J. 1. The petitioner is a private Limited Company incorporated under the Companies Act, 1956 , having its Head Office at Dr. Annie Besant road, Worli, Bombay, and has been represented by the constituted attorney Sri indranil Sengupta of Calcutta. The opposite party is also a Government enterprise and a Company incorporated under the Indian Companies Act, 1956 , having its registered office at Dhurwa, ranchi. 2. The opposite party-Company carries on business relating to supply of entire equipments required for Steel plants, Mines, Fertilizer factories and other Industrial Projects. Their main object is to take up contracts of India and abroad for designing, manufacturing, inspection, supply, erection, and commissioning of all kinds of equipments for the purpose. The objects and the workings and pattern of business of the opposite party-Company have been stated elaborately in para 5 of this Company petition. 3. On the other hand, the petitioner is a small scale industrial unit doing business of manufacturing and supply of bulk Material Handling System including Shuttle Conveyors for raw material handling system. The opposite party being a Public Limited company cloated tender and requested the petitioner vide their letter dated 5-4-91, as contained in Annexure-3, to send offer as per the terms and conditions attached to the tender enquiry for supply of shuttle conveyors for Raw material Handling Systems Project at rourkela Steel Plant. On being satisfied with the offer being made from the side of the opposite party, the petitioner accepted the same and hence order was placed on 5-12-91 with the petitioner Company for purchase of the above Machinery and also commissioning for it and total purchase value was fixed at rs.92,50,000/-. The petitioner procured the raw materials and manufactured the items as per the approved design and technical specifications and it was duly inspected by M. N. Dastoor and Company Limited, the Inspecting agency appointed by the opposite party as per the terms and conditions of the purchase order. When on inspection also, machineries were found to be alright, then the same were despatched to the opposite party by road on various dates through road transport companies. The opposite party took delivery of the goods from the petitioner but did not pay the entire amounts and admittedly, rs.20,90,902/-. break-up of which is rs.19,43,902/- against supply bills plus rs.1,47,000/- against supervision charges, remained outstanding. The opposite party took delivery of the goods from the petitioner but did not pay the entire amounts and admittedly, rs.20,90,902/-. break-up of which is rs.19,43,902/- against supply bills plus rs.1,47,000/- against supervision charges, remained outstanding. Against the above amount, the Opposite party deducted a sum of Rs.1,500/- towards demand draft charges and those outstanding amounts remained as per the petition to the tune of Rs.20,89,402.00. The petitioner being a Small Scale Industrial Company had to borrow amounts from other agencies for the purpose of manufacturing of goods delivered to the Opposite party and the interest on the outstanding dues were calculated at the rate of 5% above the floor rate for comparable lending compounded with monthly rests as per sections 4 and 5 of the "interest on Delayed payments to Small Scale and Ancillary industrial Undertakings Act, 1993 (Act 32 of 1993 ). Various provisions of Sections 3 and 4 and other Sections of the said Act have been elaborately stated and quoted under para 15 of the Company Petition. Clause of the purchase order of the Opposite party were also stated in para 16 of the Company Petition and according to the said clause, the outstanding dues have been calculated from the side of the petitioner. It deals, the Opposite party gave an amount of Rs.9,25,000/- in two instalments to the petitioner and the same had been deducted while calculating the outstanding dues together with deductions of further payment being made from the side of the Opposite party. Delivery of goods were completed within a span from May, 1993 to november, 1993. The petitioner made repeated reminders and sent letters after letters to the Opposite party to pay the aforesaid amount which was outstanding. When those have not been paid heed to, then a legal notice was given on 21-4-94, which is contained in annexure-7. Before that, there was a joint meeting between the parties and after that joint meeting, outstanding dues to the tune of Rs.32,00,000/- was settled and the Opposite party by letter dated 7-3-94, as contained in Annexure 8/1, had promised to release the payment of Rs.32,00,000/-, but when the same had not been paid, then notice was sent as stated above. Before that, there was a joint meeting between the parties and after that joint meeting, outstanding dues to the tune of Rs.32,00,000/- was settled and the Opposite party by letter dated 7-3-94, as contained in Annexure 8/1, had promised to release the payment of Rs.32,00,000/-, but when the same had not been paid, then notice was sent as stated above. Details of calculation of dues have been shown in the statement as contained in Annexure-9 and then some amount were paid and again a fresh legal notice was issued on 7-4-95, as contained in Annexure-10, deducting the amount paid by the Opposite party after the earlier notice was given on 21-4-94 vide Annexure-7. Now, according to the petitioner, all disputes regarding the outstanding dues were settled between the parties in the joint discussion held on 7-3-94 and the Opposite party by letter dated 7-3-94, as contained in Annexure-8/1, confirmed payments to be released amounting to rs.32,00,000/-. After the legal notice was issued vide Annexure-7, then the opposite party made payment of Rs.10,00,000/- by two demand drafts of Rs.5,00,000/- each, as contained in Annexure-15 and 16, and by deducting that amounts, second legal notice dated 7-4-95 (Annexure-10) was served upon the opposite party. After the first legal notice was served on the Opposite party, for obvious reasons of inability to make payment, the Opposite party started taking frivolous objections and disputes regarding the outstanding dues, although by Annexure-8/1, the Opposite party had already admitted the outstanding dues to the tune of Rs.32,00,000 (thirty two lakhs) after joint discussion made between the parties. When all disputes have been settled now, according to the petitioner, only for frustrating the payment order and the cause for filing of Company Petition for the purpose of winding up of the company, these frivolous disputes regarding the outstanding dues have been raised by the Opposite party, 4. When the Company Petition for winding up was filed under Sections 433, 434 and 439 of the Companies Act, 1956, then notices were served on the opposite party and on appearance they took time. Then the petition was admitted for hearing, when it could be found that the outstanding dues, as claimed by the petitioner, have been admitted vide Annexure 8/1. After admission also, fresh notices were served as per the law. 5. Mr. Then the petition was admitted for hearing, when it could be found that the outstanding dues, as claimed by the petitioner, have been admitted vide Annexure 8/1. After admission also, fresh notices were served as per the law. 5. Mr. V Shivnath, appearing for and on behalf of the Opposite party submitted that he was going to file stay petition in this Company Petition for invoking Arbitration clause of the agreement regarding payment of the dues of the petition or under Sec.442 of the companies Act. But Mr. Poddar, appearing for and on behalf of the petitioner, vehemently opposed it on the ground that there was no scope of arbitration when the outstanding dues of the petitioner have been admitted from the side of the Opposite party vide annexure-8/1. 6. After hearing the counsel for both the parties on the matter of Arbitration clause, this Court passed order on 16-7-96. It could be found that on admission as per Annexure-8/1, Rs.32,00,000/- was outstanding to be paid to the petitioner and after the first legal notice was served vide Annexure-7, Rs.10,00,000/- have been paid. It was stated by Mr. V Shivnath in the Bar that out of rs.32 lakhs, Rs.13 lakhs and odd were disputed, which should go for arbitration as per the agreement. Then even if taking the objection of Mr. V Shivnath regarding Rs.13 lakhs being disputed one on its face value then also Rs.9 lakhs remained outstanding on admission itself and, as such, following order was passed on 16-7-96. "in view of the such position, even if taking into consideration that arbitration clause is there and 13 lakhs and odd is the disputed amount, although the same is not being admitted from the side of the petitioner then also for the purpose of stay petition to be moved from the side of the respondent, the same can only be entertained after Rs.9 lakhs of the original amount of dues are being deposited or paid to the petitioner. " Two weeks time was allowed to enable the Opposite party to make payment of Rs.9 lakhs, but no such amount was paid rather the Opposite party preferred a Letter Patent Appeal against the order dated 16-7-96 being l. P. A. No.191 of 1996 (R), but at the admission stage, the said L. P. A. was dismissed and it remained to the position that the Opposite party became unable to pay its debts even to the nomial exteat of Rs.9 lakhs, which was admitted from the side of the Opposite party. 7. After the petition was admitted then the Opposite party filed a detailed written statement and it was contended inter-alia that although the inspection was made by M/s. M. N. Dastoor and company, but the petitioner did not supply the complete materials as per the purchase order and, as such, by a detailed letter dated 19-5-94, as contained in Annexures-B and C, the petitioner was informed about the number of items which were found to be short in the supply. Various other pleas have also been taken regarding non installation of the materials in proper time and also some damages caused to the materials at the time of supply which were not being rectified and, as such, the Opposite party was making always demands that the petitioner should comply with the different clauses of the agreement/purchase order but the same had not been done. The main contention of the Opposite party in the written statement is that the petition for winding up is not maintainable as the Op-posite party has got grievances of not getting the materials and Instruments as per the purchase order and, as such, payment demanded by the petitioner could not be made available to them for such disputes and when there is a clause of arbitration for referring the dispute in respect of the purchase order/contract, then until and unless the matter is resolved through arbitration, no winding up petition is maintainable. 8. At the time of argument, Mr. V. Shivnath, appearing for and on behalf of the Opposite party has produced a copy of the written statement filed by the Opposite party in an original suit filed by the petitioner being Suit No.415 of 19% before the original jurisdiction of the Bombay High Court relating to the same contract order. 8. At the time of argument, Mr. V. Shivnath, appearing for and on behalf of the Opposite party has produced a copy of the written statement filed by the Opposite party in an original suit filed by the petitioner being Suit No.415 of 19% before the original jurisdiction of the Bombay High Court relating to the same contract order. There also, in the written statement, the Opposite party as defendant raised the plea of arbitration clause regarding the dispute in relation to the contract order. 9. The present petition has been filed for winding up as per Sec.433 (c) of the Companies Act. Under Sec.433, different circumstances are there wherein a company can be wound up, out of which, sub-section (e) relates to the circumstances when the Company is unable to pay its debts. For coming up with the four corners of this provision, petitioner while filing the winding up petition must prove that the debt is a bona fide one and the Opposite party is unable to pay the same, but if there is dispute regarding the debt and there is sustainable defence, then the Court is slow in passing orders of winding up a company. The said view has been expressed by the Apex Court as reported in the case of Madhusudan Gordhandas and Co. V/s. Madhu Woolen Industries Pvt. Ltd. (A. I. R.19/1 SC 2600 ). Further observation of the Apex Court is that where the debt is undisputed the Court will not act upon a defence that the company has the ability to pay the debt but chooses not to pay that particular debt. Where, however, there is no doubt that the company owes the creditor a debt entitling him to a winding up order but the exact amount of debt is disputed, the Court will make a winding up order without requiring the creditor to quantify the debt precisely. In passing winding up order, the wishes of the creditors are also required to be considered. If the wishes are tenable then the Court may decline to make winding up order. On such principles, Mr. In passing winding up order, the wishes of the creditors are also required to be considered. If the wishes are tenable then the Court may decline to make winding up order. On such principles, Mr. Poddar, appearing for and on behalf of the petitioner has relied on the said decision of the Apex Court and refers to section 434-A of the Companies Act, wherein it could be found that if the company is indebted to a sum exceeding five hundred repees then if the said amount is presumed from the circumstances the inability of the creditor to pay then the winding up order is a natural consequence to be passed. 10. On the other hand, Mr. V. Shivnath, appearing for and on behalf of the opposite party by referring to a decision as reported in All England law Reports, namely, 1972 (2) All ER page 385 submitted that when the debt is disputed and the Company is bonafidety raising such dispute from very initiation and when the Opposite party has got substantial grounds to dispute the said debt then the petition for winding up is not maintainable and there cannot be any compulsory winding up of the Company. Similar view has been expressed in another case as reported in 1968 (2) All England Law Reports page 769 (Mann and another V/s. Goldstein and another ). In the first reported case as mentioned above, a demand on the company was made for repayment of a debt. The debt was not repaid within the time frame on the notice as required under the Companies Act. The debtor presented a petition for the compulsory winding-up of the Company on the ground that the Company was unable to pay its debts, but the company contended that at the time when the petitioner was presented, it had not neglected to pay the sum in a question for the period on which it was demanded, as it had the defence case that they were keeping the amount as a trust for shares in another company. In that circumstances, it was held that when the Company has a sustainable defence then the compulsory winding up petition is not maintainable. In that circumstances, it was held that when the Company has a sustainable defence then the compulsory winding up petition is not maintainable. In the second case also, as soon as the petitioner raised the demand then the company disputed the same on some substantial grounds as there was confusion whether the order was placed by the Company in its proper form and, as such, the very raising of the demand was questioned regarding the foundation of the claim itself. Then it was held that the compulsory winding up order cannot be passed when there is a substantial ground of challenging the debt, which required further investigation. So, the point of law remains that the compulsory winding up order cannot be passed even if the debt is above rupees five hundred as per Sec.433 (e) of the Companies Act, if the debt in question is not a definite one rather a disputed one at the very outset and required to be investigated, which the court under the winding up proceeding is not empowered or authorised to do. 11. Let us now consider the present case keeping in mind the above principle of law. The order of purchase was admittedly, made by the Opposite party to the petitioner and there is also admitted position that supply was made by the petitioner to the Opposite party and some payments against the said order have been made available to the petitioner but the balance remained outstanding. There was some dispute about the quantum of payment as demanded by the petitioner and then there was a joint discussion, as a result of which, it was settled down to the tune of rupees thirty two lakhs and by annexure-8/1 the Opposite Party had admitted that the said amount was goung to be paid on a recent date. The wordings of Annexure-8/1 may be quoted for the purpose of proper appreciation. The letter was dated 7th March, 1994, signed by the Project Manager of the Opposite Party addressed to the petitioner. The wordings are in the following manner:- "dear Sir, Please refer to the discussion you had with us on 7-3-94 regarding release of your outstanding payment of approx. Rs.32 lacs. In this connection, please be informed that your outstandings payment of approx. Rs.32 lacs shall be released shortly. Please bear with us till such time. . . . . . . . . . Rs.32 lacs. In this connection, please be informed that your outstandings payment of approx. Rs.32 lacs shall be released shortly. Please bear with us till such time. . . . . . . . . . " Thus, from the wordings of that very letter and the subject quoted in the letter very well reveal that the Opposite party had admitted the dues of the petitioner regarding the purchase order and then the petitioner had to serve a legal notice as contained in Annexure-7 dated 21st April, 1994, under Sections 433 and 434 of the Companies Act, placing the demand. At that time, according to the petitioner, the amount had gone higher because of accrual of interest under Rules of Interest on Delayed Payments to Small Scale and Ancillary industrial Undertakings Act, 1993 (Act 32 of 1993 ). After that notice was served, the Opposite Party made payment of rs. ten lakhs by two demand drafts. So, the Opposite party had admitted the dues and a part payment was made while sending those two drafts of rupees ten lakhs. It has never been contended by the O. P. Company or stated in the written statement that by sending those two drafts, they have immuned themselves from any further liability. But it appears that after notice was served as per annexure-7, the Opposite party started raising some dispute regarding the quantum of debt. When no further payment was made then again legal notice was served as contained in Annexure-10 dated April 7,1995, and then this company petition was filed for compulsory winding-up of the Opposite party-Company. A plea was taken on receipt of the notice from this court by the Opposite party for filing stay petition on the ground that they were contemplating to refer the dispute regarding the quantum of debt as raised by the petitioner to an arbitrator, as per the Arbitration clause in the purchase order. When such petition was contemplating to be moved, then this Court asked about the details of the quantum of compensation of debt and it could be revealed from the submissions made by the learned counsel for the Opposite party that still there were outstanding dues and even to the extent of Rs. nine lakhs, there was no dispute at all. About Rs. nine lakhs, there was no dispute at all. About Rs. thirteen lakhs, there was dispute as they had admitted although the petitioner vehemently opposed to such dispute in view of the admission made from the side of the opposite party as per Annexure-8/1. 12 Without going into that aspect of dispute or admittance, when there was a clear admission on the side of the opposite party that Rs. nine lakhs was not in dispute then an opportunity was given to the Opposite party to pay the same, but that was not paid rather the opposite party preferred a Letters patent Appeal against the order passed by this Court which was again dismissed. So, the admitted dues of Rs. nine lakhs remained outstanding and the Opposite party had neglected to pay the same which infers of inability on the part of the Opposite party to pay the same. 13. Mr. V. Shivnath, appearing for and on behalf of the Opposite party has again referred to a recent decision of andhra Pradesh High Court as reported in AIR 199/ Andhra Pradesh page 13 (Mis. Mulimetals Limited V/s. M/s suryatronics Private Limited) to the effect that the debt must be ascertained, definite and undisputed one until and unless the debt is undisputed one and definite no winding up petition is maintainable under Sections 433 and 434 of the Companies Act. His further contention with reference to this judgment of the Andhra Pradesh High Court is that the interest being a discretionary one and non-payment of interest part cannot invoke the jurisdiction of winding up proceedings. Mr. Shivnaths submission is that the petitioner has calculated his demands on the basis of interest but that interest was not payable from the side of the Opposite party and if the interest part is deleted then there cannot be any definite debt against the Opposite party. The quantum of interest which has been claimed under Interest on Delayed Payment to Small Scale and ancillary Industrial Undertakings Act, 1993 (Act No.32 of 1993) may be a disputed one but then also there is definite debt as this court has already held on the submissions being made from the side of the Opposite party vide order dated 16-7-96. Now, this question cannot be raised regarding unascertainment or undisputed claim of debt, at least Rs. nine lakhs was definitely an undisputed debt and when the said amount is above rs. Now, this question cannot be raised regarding unascertainment or undisputed claim of debt, at least Rs. nine lakhs was definitely an undisputed debt and when the said amount is above rs. five hundred then compulsory winding up order can be passed by this court. 14. Mr. V. Shivnath, for and on behalf of the Opposite party has strenuously argued that when the payment was in respect of Rs. thirty two lakhs, it was always mentioned as approximately which means that the Opposite party had never admitted all the dues to the tune of Rs. thirty two lakhs exactly but an approximation to that amount was only being admitted. So, according to Mr. Shivnath, amount of debt was always being disputed. I am not convinced with such submission of Mr. Shivnath. It may be that exact amount of rs.32 lakhs was not being admitted although according to the petitioner, the same was admitted after all disputes were being settled at a joint discussion, but then also out of that amount of Rs.32 lakhs, Rs.10 lakhs had been paid and the Opposite party never made any correspondence to the effect that after such payments they have immuned themselves from the liability, which infers that more liability is there with the Opposite party and that could be revealed in the order passed by this Court on 16-7-96, and taking it for granted that Rs.13 lakhs were disputed as is submitted from the side of the Opposite party and rs. nine lakhs not being disputed was asked to be paid by the debtor but still then the Opposite party did not pay it. Hence, there is no other alternative but to hold that the Opposite party had neglected to pay the same because of their inability and the dispute regarding the amount was started only after the legal notice was served vide Annexure-7 and then in the written statement. The dispute was already settled when An-nexure-8/1 was issued from the side of the Opposite party. 15. Taking the worst view of the case of the petitioner that the whole of the debt of Rs.32 lakhs was not an admitted one rather a part of it was disputed then also Rs. nine lakhs was never a disputed one and when time was granted to the Opposite party to pay that undisputed amount of Rs. 15. Taking the worst view of the case of the petitioner that the whole of the debt of Rs.32 lakhs was not an admitted one rather a part of it was disputed then also Rs. nine lakhs was never a disputed one and when time was granted to the Opposite party to pay that undisputed amount of Rs. nine lakhs, the Opposite party failed to pay the same inferring thereby that they are unable to pay the debt. 16. Regarding filing of the suit by the petitioner in the original jurisdiction of the Bombay High Court does not take away the factum that the Opposite party neglected to pay the same. Filing of suit cannot debar compulsory winding up, if it could be proved from the side of the petitioner that because of inability, the Opposite party could not pay the admitted dues. Dispute regarding quantum is not the matter of dispute or a substantial dispute raising sustainable defence on the part of the Opposite party. If the debt is above Rs. five hundred and the same is admitted and the said amount is not paid with the time frame as made by the Court and also not within the periods of the legal notice served twice from the side of the petitioner then inevitable conclusion is that the Opposite party is unable to pay the admitted debt of the petitioner. On consideration of factual aspects and the legal aspects of this case, I can find that the petitioner could be able to prove a good case for the purpose of winding up. It further appears that several other cases are also pending before the Court by several other creditors for winding up which also shows the circumstances that the Opposite party is unable to pay the debts of its different creditors. 17. In the result, the petition is hereby allowed and it is ordered that the company-Opposite party be wound up. The Registrar shall forthwith intimate to the Official Liquidator and the registrar of the Companies at Patna. In terms of Sec.445 of the Companies act, the petitioner shall file a certified copy of the order with the Registrar within thirty days from today. The Official Liquidator shall forthwith take up the administration of the Company. The statement as required under Sec.454 of the Companies Act shall be submitted within the time limited therein to the Official Liquidator. In terms of Sec.445 of the Companies act, the petitioner shall file a certified copy of the order with the Registrar within thirty days from today. The Official Liquidator shall forthwith take up the administration of the Company. The statement as required under Sec.454 of the Companies Act shall be submitted within the time limited therein to the Official Liquidator. The petitioner shall deposit a sum of Rs.5,000/- (five thousand) within four weeks next from today to be paid to the official Liquidator. Petition Allowed.