JUDGMENT 1. - This petition for winding-up is by the creditor under section 439(b) of the Companies Act, 1956 ('the Act') on the ground that the company is unable to pay its debts, as set out under section 433(e) read with section 434 of the Act. 2. The factual aspect of the case is thus : The respondent-company Indo Caps (P.) Ltd. ('the company') is incorporated under the Act having its registered office at Old Industrial Area, Alwar, in the State of Rajasthan. Its authorised share capital is Rs. 10 lakhs, while issued and subscribed capital is Rs. 6,10,000. The petitioner is also a company, incorporated under the Act. According to the petitioner, they supplied tin plates valuing Rs. 33,09,673 to the respondent-company on credit basis in the year 1994. Photostat copies of the invoices have been placed on record as part of winding-up petition. Supply of goods was made as per oral agreement between representatives of the parties at Alwar wherein it was decided that goods shall be supplied on credit and the respondent-company shall make payment within seven days on receiving the goods. In case of default in payment, the petitioner shall be entitled to get interest at the rate of 24 per cent per annum. 3. Before filing winding-up petition, a registered notice, dated 18-7-1995, was given to the company detailing out the above factual aspect. The said notice was replied by the company vide registered letter dated 4-8-1995 through its advocate Shri Babu Lal Goyal. In reply supply of tin-plates was admitted. Value of the goods was also not disputed. However, other conditions regarding payment of price of the goods within seven days from the date of receiving goods and in case of default liability of the company to pay interest at the rate of 24 per cent per annum were denied. The plea for non-payment taken, inter alia, is that the goods were not of proper quality and the same could not be used by the company. Thereafter, another notice, dated 18-8-1996, was given by the petitioner through its advocate Shri Alok Sharma in which the same facts were reiterated and it was further stated that the plea taken by the respondent-company that the goods supplied to them were of sub-standard quality is not correct and if it had been so, the goods would have been returned to the petitioner. That in fact, the goods were used by them for commercial purpose. This notice was also replied by the company through its advocate Shri Sudhansu Kasliwal. The reply is in general way merely denying averments of the notice. 4. Reply to the winding-up petition has been filed by the respondent-company. In its reply the company has taken an altogether different and inconsistent plea about supply of the goods. For the sake of convenience, para. 3 of the reply may be reproduced, which is as under : "That the petition has been filed for recovery of the amount alleged to be a sum of Rs. 33,09,673. The aforesaid claim is admittedly a part of long drawn feud between the two groups of Shri M.C. Gupta and Shri N.L. Data both of which groups are the partners in R.S. Industries (Rolling Mills), a duly registered partnership firm and which partnership firm is the predecessor-in-interest of the petitioner-company. In fact, the petitioner has no title to the rolling mills which belongs to the firm. The fact of the matter is that the petitioner company had entered into an agreement to sell with the said partnership firm in respect of entire business and assets of the partnership firm but no consideration has been paid till date to the said firm. As such petitioner company could not have sold the goods which it claimed to have sold to the answering respondent." 5. The learned counsel appearing for the respondent-company had vehemently contended that the alleged debt due and payable to the petitioner is disputed and the present winding-up petition is intended to be exploited to pressurise and force the company to pay the amount claimed by it, regardless that the claim is disputed. The learned counsel contended that a winding-up petition cannot be allowed as a mode of debt realisation and looking to the long standing dispute between the parties, they should be left to get their disputes resolved in a civil suit or in any other appropriate forum, but in no case the present winding-up petition is maintainable. On the other hand, contention on behalf of the petitioner is that the company has failed and neglected to make payment deliberately while there is no dispute about the amount due. On the other hand, contention on behalf of the petitioner is that the company has failed and neglected to make payment deliberately while there is no dispute about the amount due. It is also contended that the plea abou supply of sub-standard goods has been taken by the company first time ii its reply to the legal notice given by the petitioner which is without an3 basis and an after-thought. The learned counsel contended that the company has taken a different stand in its reply to the petition. The plea taken about some other disputes has no relevance with the present matter. 6. Before I turn to merits of the case, it would be proper to examine legal position in such matters. Section 433 states the circumstances in which a company may be wound-up by the Court. Under clause (e) a company may be wound-up by the Court if the company is unable to pay its debts. Section 434 details out the circumstances when a company is deemed unable to pay its debts. Under clause (a) of section 434(1) a company shall be deemed to be unable to pay its debts if it has neglected to pay a sum exceeding Rs. 500 to the creditor for three weeks after getting notice by registered post from the creditor demanding to pay the sum so due. 7. Law is well settled now by various judicial pronouncements on the question. The settled legal position is that if a creditor establishes his credit as clear and undisputed and the company fails to pay such debt without reasonable and valid excuse, such creditor is entitled to ex-debito justitiae to an order winding-up the company. It is also well settled that a winding up petition should not be allowed to be taken as recourse of as means to recover debts from a company. It is not a legitimate way to enforce payment of debts which are bona fide disputed by a company. In other words, the Company Court follows a summary procedure and will not investigate facts and evidence in depth and a winding-up petition cannot be used as weapon to pressurise or coerce a company to make payment. Whether the dispute with regard to the debt is bona fide or not is a question depending upon the facts of each case. The expression 'bona fide' in common English parlance means 'genuine', `good faith'. Whether the dispute with regard to the debt is bona fide or not is a question depending upon the facts of each case. The expression 'bona fide' in common English parlance means 'genuine', `good faith'. A bona fide dispute must be based on substantial ground. If a debt is bona fide disputed there cannot be a 'neglect to pay' within the meaning of section 434(l)(a). Whenever a dispute is raised by the company, the Company Court should normally examine the plea applying following principles: (i) that the defence of the company is in good faith and is one of some substance; (ii) the defence is likely to succeed in point of law; (iii) the company produces prima facie proof of the facts on which the defence depends. See : Kirpal Singh v. Sutlej Land Finance (P.) Ltd [1989] 66 Comp. Cas. 841, (Punj. & Har.) ; Surindra Packers v. Punjab Land Development & Reclamation Corpn. Ltd [1989] 66 Comp. Cas. 883 (Punj. & Har.) ,For deciding whether a dispute is bona fide or not, the nature of the dispute raised, conduct of the parties and the stage when a dispute is raised may be relevant factors to be taken into consideration. In the case of Amalgamated Commercial Traders (P.) Ltd v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 , the Supreme Court has clearly laid down that an order of winding-up will not be made where a debt is bona f idely disputed by the company and the Court is satisfied with the company's defence. The Supreme Court, with approval quoted the following passage from Buckley on the Companies Act, 13th edn., p. 451 : "It is well settled that a winding-up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding-up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatised as a scandalous abuse of the process of the Court. At one time petition founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petition. At one time petition founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petition. But, of course, if the debt is not disputed on some substantial ground, the Court may decide it on the petition and make the order... If the debt was bona fide disputed, as we hold it was, there cannot be 'neglect to pay' within section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the ground of winding-up, namely, that the company is unable to pay its debts is not substantiated." 8. The above principle has been reiterated by the Supreme Court in Madhusudan Gordhandas & Co. v. Madhu Woollen Industries (P.) Ltd [1972] 42 Comp. Cas. 125 , observing as under : "Where the debt is undisputed the Court will not act upon a defence that the Company has the ability to pay the debt but the company 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 the debt is disputed, the Court will make a winding up order without requiring the creditor to quantify the debt precisely. The principles on which the Court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law, and, thirdly, the company adduces prima facie proof of the facts on which the defence depends." (p. 131) 9. In Wastinghouse Saxby Farmer Ltd, In re [1982] 52 Comp. Cas. 479 (Cal.) , the Court held that a defence raised by a company should be bona fide but should not be allowed to be taken up without concrete material, on which such allegation is made, being produced. "Similarly, in United Western Bank Ltd.'s case [1978] 48 Comp. Cas. In Wastinghouse Saxby Farmer Ltd, In re [1982] 52 Comp. Cas. 479 (Cal.) , the Court held that a defence raised by a company should be bona fide but should not be allowed to be taken up without concrete material, on which such allegation is made, being produced. "Similarly, in United Western Bank Ltd.'s case [1978] 48 Comp. Cas. 378 (Bom.) Kania J. (as he then was) observed that when the defence is that the debt is disputed, the Court has to see first whether the dispute on the face of it is genuine or merely a cloak to cover the company's real inability to pay the debts. The inability is indicated by its neglect to pay the debt, within three weeks, after proper demand was made. He added that neglect is to be assessed on the facts of each case. In Goel Bros. & Co. (P.) Ltd's case [1980] 50 Comp. Cas. 356 (Bom.) Aggarwal J. held the view that after a creditor establishes that the debt is clear, valid in law, unimpeachable and undisputable, the creditor is entitled to a winding up order ex-debito justitiae. But, if the debt is disputed and the dispute is bona fide and genuine, no winding-up order can be made. He clarified that neglect to pay is not equivalent to omission to pay for it requires that such omission is without reasonable cause or valid excuse." In background of the legal position as aforesaid, the question is as to whether the defence raised by the company is bona fide and genuine having some concrete basis or it has been taken for the mere purpose of avoiding payment and order of winding-up of the company. 10. Having given by anxious consideration to the facts of the case I am of the confirmed view that the plea/defence for non-payment of debttaken by the company is wholly frivolous having no genuine and concrete basis. The facts clearly indicate that goods were supplied to the company in the year 1994 but still payment of the same has not been made. In reply, dated 4-8-1995, to the first notice, the company has admitted in unequivocal term to have purchased and received goods from the petitioner. Value of the goods (tin-plates) amounting to Rs. . 33,09,673 was also not disputed. In reply, dated 4-8-1995, to the first notice, the company has admitted in unequivocal term to have purchased and received goods from the petitioner. Value of the goods (tin-plates) amounting to Rs. . 33,09,673 was also not disputed. The dispute raised was with regard to payment within seven days from the date of receiving of the goods and liability to pay interest at the rate of 24 per cent per annum in case of default. Liability to make payment of the price of goods was disputed on the ground of supply of sub-standard goods without pointing out the defects. The plea of supplying defective or sub-standard goods was taken first time by the company in its reply dated 4-8-1995, i.e., after more than nine months from the date of its supply and that too when a legal notice was given demanding payment. It is also note-worthy that prior to this the company never intimated the petitioner making complaint about supply of defective/sub-standard goods, nor the company made any attempt to return the goods. After getting notice also no attempt was made to return the goods. 11. Under the Sale of Goods Act it is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale. Section 32 of the Act says that payment and delivery of goods are concurrent conditions, unless otherwise agreed. Section 37, no doubt, gives right to the buyer to reject the goods of a different description not included in contract. The buyer has also a right to have a reasonable opportunity of examining the goods before accepting the same as per section 41 of the Act. Section 37, no doubt, gives right to the buyer to reject the goods of a different description not included in contract. The buyer has also a right to have a reasonable opportunity of examining the goods before accepting the same as per section 41 of the Act. Then, section 42 provides "the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of reasonable time, he retains the goods without intimating to the seller that he has rejected them." Applying the aforesaid principles in the instant case and having regard to the fact that the company, after receiving the goods, did not intimate to the petitioner, within reasonable time, that it has rejected the goods, the company shall be deemed to have accepted the goods and be liable to make its payment. 12. The reply of the company to second notice is also vague. However, from the replies to the notices two things are clearly established, i.e., the goods worth Rs. 33,09,673 were purchased and received by it and no payment towards its price was made. The company did not dispute the invoices which contain condition of interest at the rate of 24 per cent per annum after three days. Then, in reply to the winding-up petition the company has taken an altogether different and inconsistent plea. The defence taken by the company earlier in its replies to the notices has been given a complete go-by. Even supply of the goods has not been admitted and a plea of some dispute between the two families, having no connection whatsoever with the present litigation which is between the two companies, has been taken. Thus, having regard to all the facts I find that the plea/defence taken by the company for non-payment is not legitimate and bona fide. Inconsistent stand taken by it and that, too without any concrete material completely falsifies the plea/defence of the respondent-company. The plea taken by it appears to be merely to halt legitimate payment of the amount to the petitioner and to avoid a winding-up order which is natural consequence on non-payment of debts in absence of any reasonable and sufficient cause. 13. The plea taken by it appears to be merely to halt legitimate payment of the amount to the petitioner and to avoid a winding-up order which is natural consequence on non-payment of debts in absence of any reasonable and sufficient cause. 13. The petitioner's claim appears to be bona fide and I am, prima facie, satisfied that the company is unable to pay its debt and, thus, making out a prima facie case of winding-up. 14. The technical objection about non-maintainability of winding-up petition, taken by the learned counsel for the company for describing wrong address of the registered office of the petitioner-company can be rejected conveniently as address of administrative office was wrongly stated to be that of registered office. In rejoinder the petitioner-company has explained and corrected this mistake by giving correct address of its registered office as "Plot No. 241-242 (b), Road No. 6-D, V.K.I., Area, Jaipur". 15. The petition is, therefore, admitted. The petitioner shall take necessary steps to advertise the petition for hearing on 26-2-1998 in prescribed form in one issue of English newspaper 'Times of India' (New Delhi Edition) and one issue of `Denik Bhaskar' Jaipur Edition. On the facts and circumstances, I also think it just and proper to appoint Official Liquidator attached to this Court as provisional liquidator of the respondent-company. He shall take into his custody and control all the properties, effects and actionable claims to which the company is or appears to be entitled. He shall also take in his possession or control all books of account and other documents of the company in accordance with law. *******