H. L. DATTU, J. ( 1 ) THE petitioner-company is common in all these company petitions. The respondent companies are either distilleries or breweries or wineries, having their registered office within the jurisdiction of this court. The facts are more or less similar and the legal issues raised are common. Therefore, all these company petitions are clubbed together, heard and disposed of by this common judgment. ( 2 ) FOR narration of facts and the contentions canvassed, in my judgment, I will be making reference to the pleadings in C. P. No. 32 of 1999. ( 3 ) THE petitioner is a company incorporated under the provisions of the Companies Act, 1956, its registered office is situate at MSIL House, No. 36, Cun-ningham Road, Bangalore. The object of the company is as stated in the memorandum of association. Apart from others, to carry on all kinds of agency business and in particular to act as the manufacturer's representatives, selling agents, distributors, storekeepers, stockists, business agents, organisers, canvassers, or local representatives of all products manufactured by the Government of Karnataka and/or the government of India in their industrial undertakings and also by limited liability companies or other companies, factories, firms, corporations, whatsoever, industrial or otherwise. ( 4 ) THE respondent is a company incorporated under the provisions of the Companies Act, 1956, as a public limited company by shares. The object for which the respondent-company is established is to conduct and carry on business in brewery, winery, distillery, etc. According to the petitioner-company, the nominal capital of the respondent-company is Rs. 100 crores, divided into ten crore shares of Rs. 10 each. ( 5 ) THE petitioner-Mysore Sales International Limited ("msil" for short) by this company petition filed under Section 433 (e) and (f) of the Companies Act, 1956 ("act" for short) has sought for winding up of the respondent--M/s. United Breweries Limited, on the ground, that the respondent-company is unable to pay its "debts due" within the meaning of Section 433 (e) and (f) read with Section 434 of the Act. ( 6 ) BRIEFLY stated the facts are : The State Government in exercise of its powers under Section 71 of the Karnataka Excise Act (Karnataka Act 21 of 1966), has introduced an amendment to the Karnataka Excise (Sale of indian and Foreign Liquors) Rules, 1968. ( 6 ) BRIEFLY stated the facts are : The State Government in exercise of its powers under Section 71 of the Karnataka Excise Act (Karnataka Act 21 of 1966), has introduced an amendment to the Karnataka Excise (Sale of indian and Foreign Liquors) Rules, 1968. The amended Rules are known as the Karnataka excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989. The same is notified by publishing in the Official Gazette dated September 13, 1989. The amended Rules have come into force with effect from the 13th day of September, 1989. By this amendment, Clause (ii) in Rule 3 of the Rules, 1968, is substituted by providing a provision for grant of a licence known as "distributor's licence". Under Sub-clause (b) of Clause (ii) of Rule 3, the State Government is empowered to specify a Government owned or controlled company as sole distributor to deal in the products of all distilleries or breweries or wineries in the State of Karnataka or to import liquor from outside the State for the purpose of distribution or sale within the State or to export liquor outside the State. The amended Rules also make a provision for substitution of Conditions nos. 2 and 3 in Form No. CL -. The substituted provisions read as under : " (a) The licensee may purchase the liquor only from distilleries/breweries/wineries, located within Karnataka or import from outside the State. (b) The licensee shall sell the liquor only to a person, who is holding CL-1 licence in the State or export liquor to a person outside the State, who is holding a valid licence to deal in liquor. " ( 7 ) UNDER Sub-clause (b) of Clause (ii) of Rule 3 of the amended Rules, the Excise Commissioner is authorised to grant distributor's licence. ( 8 ) AFTER publication of the aforesaid Rules, the State Government by its communication dated september 15, 1989, had informed the petitioner-company, that the Government intended to specify the petitioner-company for grant of distributor's licence under the provisions of the karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989, to deal in the products of all distilleries, breweries and wineries in the entire State of Karnataka, including the import and export of liquor with effect from September 30, 1989. In the same communication, the petitioner-company was requested to make suitable preparatory arrangements in that behalf. In the same communication, the petitioner-company was requested to make suitable preparatory arrangements in that behalf. ( 9 ) BEFORE the said Rules could be brought into force with effect from September 30, 1989, some of the manufacturers of liquor filed petitions before this court, inter alia, questioning the validity or otherwise of the amended Rules. A learned single judge of this court while entertaining the petitions by his order dated September 27, 1989, had stayed the operation of the amended Rules. The interim order was a short lived one. After hearing the parties to the lis, a Division Bench of this court by its order dated November 13, 1989, was pleased to dismiss the writ petitions. ( 10 ) THE State Government in exercise of its powers under Sub-clause (ii) (b) of Rule 3 of the karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1989, notified M/s. MSIL (petitioner-company) for the purpose of the Rule as "sole distributor" by publishing the same in the official gazette dated November 13, 1989. The State Government by yet another order dated november 13, 1989, directed the petitioner-company to function as sole distributor to deal in all products of distilleries or breweries or wineries in the State or import liquor from outside the state for the purpose of distribution or sale within the State or export liquor outside the State, and also permitted it to charge a reasonable margin not exceeding 5 per cent, on all sales within the State and 0. 5 per cent, on exports in respect of its operations as distributor. The commissioner of Excise had also issued "distributor's licence" to the petitioner-company on terms and conditions stipulated therein. ( 11 ) SOME of the manufacturers of liquor, aggrieved by the orders made by this court in the case of Jagadale and Sons v. State of Karnataka, AIR1990 Kant 251 , air1990 KAR 251 , ILR1990 KAR 101 , 1990 (1 )Karlj18 disposed of on November 13, 1989, had filed several appeals before the Supreme Court. The court in Khoday Distilleries Limited v. State of Karnataka, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 SCR759 , has upheld the view taken by this court, by holding, that the amended Rules are intra vires the Act. The court in Khoday Distilleries Limited v. State of Karnataka, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 SCR759 , has upheld the view taken by this court, by holding, that the amended Rules are intra vires the Act. The apex court while deciding the lis between the parties before it in its judgment has made specific reference to the contentions canvassed before it. In the words of the Supreme Court (page 913) : "one of the main contentions raised by the appellants was : By compelling the appellants to sell liquor to MSIL and prohibiting them from selling liquor to any one else, the State Government has violated their fundamental right under Article 19 (1) (g) of the Constitution to carry on trade or business. They further contended that the restrictions placed by these amendments on their right to carry on trade were far from reasonable. " ( 12 ) THE other issue that was argued before the apex court was that the Rules as amended in 1989 are ultra vires, because they go beyond the scope of the delegated authority given to the State to formulate rules. Secondly, that there is no legislative policy prescribed by the Karnataka Excise act of 1965 for a distributor's licence and hence the rules prescribing a distributor's licence have travelled beyond the scope of the main Act and are beyond the ambit of the delegated authority. Thirdly, the amended Rules are arbitrary, unreasonable and cause undue hardship and, therefore, are violative of Article 14 of the Constitution. ( 13 ) THE apex court while entertaining the special leave petitions filed by M/s. Khoday distilleries Limited and others, was pleased to grant an order of stay of the judgment of this court subject to certain conditions and one such condition is as under : "in case ultimately the petitioners lose in the final hearing, provision should be made for the payment of compensation in favour of the third respondent namely, M/s. Mysore Sales international. " ( 14 ) THE Supreme Court by its judgment dated December 15, 1995, since reported as Khoday distilleries Limited v. State of Karnataka, 1996 I AD (SC )278 , air1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 scr759 , was pleased to reject all the issues canvassed before it by the parties to the lis and was further pleased to declare that the amended Rules, 1968, as amended on September 13, 1989 are valid, intra vires the Act and do not violate the constitutional provisions, specifically Articles 14 and 19 (1) (g) of the Constitution. The court was further pleased to direct the appellants therein, to pay to MSIL the requisite commission amount on the basis of the dealings conducted by them in view of the interim orders made by the court. The directions issued are as under (page 917) : "in the premises, these appeals have no merit and they are dismissed with costs. Under the interim orders, the appellants are liable to pay compensation to MSIL if they lose in the appeals. This is in view of the commission which is prescribed under the Rules which is to be paid to msil. The appellants were also directed to keep separate accounts of their dealings and supply a copy of the same, inter alia, to MSIL. Some of the appellants have accordingly supplied statements of account to MSIL. Those who have not supplied such statements are directed to supply the same to MSIL within eight weeks from today. The appellants are directed to pay to msil the requisite commission amount on the basis of the dealings conducted by them within twelve weeks from today. " ( 15 ) THE petitioner-company asserts that the respondent-company in spite of declaration of law made by the apex court, has not submitted the statement of accounts from November 13, 1989, up to the date of filing the petition and also has not paid 5 per cent, commission payable in respect of direct sales of Indian made foreign liquor, beer, wine and fenny and 0. 5 per cent, on export sales. 5 per cent, on export sales. The petitioner-company further asserts that after making repeated requests and demands for payment of commission due and since the respondent-company had failed to discharge its liability, it was constrained to issue a legal notice dated January 1, 1997, inter alia, demanding for production of books of account and payment of commission together with interest, within the specified period. It is stated that in spite of receipt of the registered notice since the respondent-company failed to file the statement and pay the commission, the petitioner-company was forced to approach the Department of Excise, Government of karnataka, for securing necessary information to ascertain the total turnover of business carried on by the respondent-company during the relevant period and the amount of commission payable by the respondent-company to the petitioner-company under the amended Rules. The petitioner-company further asserts that after collecting the aforesaid information from the commissioner of Excise Department, it has quantified the commission payable by the respondent-company up to July, 1996, inclusive of interest at the rate of 18 per cent, per annum from November 13, 1989, at Rs. 51,70,49,000 (rupees fifty-one crores seventy lakhs forty-nine thousand only) and accordingly had issued a statutory notice dated November 21, 1998, calling upon the respondent-company to pay the entire arrears of commission with interest with effect from November 13, 1989, together with interest at 22 per cent, per annum within 21 days from the date of receipt of the notice, failing which legal action would be initiated for winding up the respondent-company. ( 16 ) ON December 29, 1998, the respondent-company had replied to the notice denying its liability to pay the amounts demanded in the statutory notice and also the "debt due". It was stated therein, that the claim of the petitioner-company is fanciful and doubtful and therefore, the petitioner-company is not entitled to take any action including filing the winding up petition. ( 17 ) THE petitioner-company asserts that the respondent-company is due and liable to pay a sum of Rs. 51,70,49,000 (rupees fifty-one crores seventy lakhs forty-nine thousand only) with further interest at the rate of 22 per cent, till the date of realisation of the entire amounts due. ( 17 ) THE petitioner-company asserts that the respondent-company is due and liable to pay a sum of Rs. 51,70,49,000 (rupees fifty-one crores seventy lakhs forty-nine thousand only) with further interest at the rate of 22 per cent, till the date of realisation of the entire amounts due. In view of the non-payment of the aforesaid amounts in spite of receipt of statutory notice, it must be presumed that the respondent-company is unable to pay its "debts due" and, therefore, the respondent-company is liable to be wound up under Section 433 (e) and 433 (f) of the Companies act, 1956. ( 18 ) THE notice of the company petition was ordered to be served on the respondent-company before admitting and advertising the company petition, inter alia directing the petitioner-company to show cause why the petition should not be admitted and advertised. After receipt of the notice of the petition, the respondent-company has entered appearance through its learned counsel. It has filed its detailed statement of objections resisting the relief sought for in the company petition. It is stated therein, that the petition is not maintainable ; that the claim made is doubtful and fanciful ; that the claim requires elaborate investigation and therefore it is not a debt due as envisaged under Section 433 (e) of the Act; that the so called debt is disputed and that dispute is a bona fide dispute and the winding up petition cannot be admitted unless the court comes to the conclusion that the defence put up is a moonshine defence ; the petition is filed with the sole intention of coercing and pressurising the respondent-company to pay money which is not legitimately due. ( 19 ) IN opposing the assertion and the relief sought for by the petitioner-company for the winding up of the respondent-company on the ground that the respondent-company is unable to meet the current demands and therefore, the company is commercially insolvent, it is asserted in the objection statement that the respondent-company is one of the leading breweries in the country and is an extremely solvent company. It has reserves and surplus aggregating to over Rs. 543 crores. The company has been consistently making profits for the last several decades. Its total turnover for the year ending March 31, 1998, is Rs. 363 crores and its gross profit is over Rs. 37 crores. It has reserves and surplus aggregating to over Rs. 543 crores. The company has been consistently making profits for the last several decades. Its total turnover for the year ending March 31, 1998, is Rs. 363 crores and its gross profit is over Rs. 37 crores. The company owns and possesses vast immovable properties including 15 acres of prime land in Grant Road, whose market value is over Rs. 400 crores. The total immovable properties owned and possessed by the company is worth over Rs. 454 crores. The company has made investments in various Government securities and in shares and debentures of various companies whose value is over Rs. 132 crores. The total assets owned by the company are over Rs. 586 crores. The company is financially sound and is fully capable of meeting all its present and future obligations and liabilities. The company is commercially solvent and sound and therefore, the company is not liable to be wound up on the ground that it is unable to meet the current demands. Any order of winding up would prejudice and affect the entire body of shareholders and the same would be contrary to public interest. ( 20 ) ON the claim made by the petitioner-company, it is stated that the petition is based upon their alleged right to collect commission/margin at 5 per cent, on the sale of liquor/beer, based on the letter dated September 13, 1989, written by the Under Secretary to the Government of karnataka, Home Department (Excise ). According to the respondent-company, a perusal of the letter bears out that the petitioner-company was not entitled to claim commission/ margin and the letter merely enables the petitioner-company to charge reasonable margin not exceeding 0. 5 per cent, on exports and 5 per cent, on the sale of liquor/beer within the State in respect of its operation as distributor. The petitioner-company is entitled to a reasonable margin and not a commission. Reasonable margin is a margin, which the distributor collects from the person to whom he/it sells. It is further stated that the claim made by the petitioner-company is totally disputed and therefore the company petition is not maintainable, especially as the claim of the petitioner-company is disputed bona fide, the petition based on a disputed claim is liable to be dismissed. It is further stated that the claim made by the petitioner-company is totally disputed and therefore the company petition is not maintainable, especially as the claim of the petitioner-company is disputed bona fide, the petition based on a disputed claim is liable to be dismissed. It further states that in the aforesaid circumstances, it would not be in the interest of shareholders, creditors, employees of the company and the public in general nor will it be just and equitable to order winding up of the respondent-company. ( 21 ) THE petitioner-company has filed a rejoinder to the statement of objections filed by the respondent-company, in that, it contends : "according to the amended Rules and the orders of the Government, every manufacturer of those commodities in the State of Karnataka was bound to supply the quantities to the petitioner-company as a sole distributor as per the indent placed on him by the wholesaler and at the time of supply the manufacturer fixed the sale price and the petitioner-company would purchase the quantity as per the sale price fixed by him. Thereafter the wholesaler who purchases the said quantity from the petitioner-company will pay the margin/commission as fixed by the state Government. In the present case, the respondent-company who was bound to supply all the quantities manufactured by him which were sold during the relevant period only to the petitioner-company and should have processed the sale transactions only through the petitioner-company as a sole distributor and if he had done so, the petitioner-company would have undoubtedly collected the commission/margin from the wholesaler who purchased those quantities. But unfortunately, the respondent-company though supplied small quantities at times, did not supply the entire quantity manufactured by him for the purpose of sale to the wholesalers whenever there was a demand and through the petitioner-company who was the sole distributor. Had only the respondent-company supplied the quantities to the wholesalers through the petitioner-company, the petitioner-company would have undoubtedly collected the margin from the wholesalers. Since he did not do so, the respondent-company is liable to compensate the petitioner-company. " (emphasis supplied by me) ( 22 ) SRI B. G. Sridharan, learned counsel for the petitioner-company has made my job easy by filing the synopsis of the case, list of events and dates, and the legal issues that requires to be considered and decided by this court in these company petitions. " (emphasis supplied by me) ( 22 ) SRI B. G. Sridharan, learned counsel for the petitioner-company has made my job easy by filing the synopsis of the case, list of events and dates, and the legal issues that requires to be considered and decided by this court in these company petitions. The issues raised are as under : (I) That the commission payable to MSIL by the respondent companies amounts to a "debt due" under Section 433 (e) of the Companies Act, 1956. Elaborating on this, learned counsel would contend that the respondent-company has unjustifiably withheld the margin money payable right from August 13, 1989, and has not paid any part of it in spite of repeated requests and demands. Therefore, it should be presumed that the respondent-company is unable to pay its debt. In support of this contention, learned counsel has relied upon the observations made by the Full bench of the Calcutta High Court in the case of Bauchharam Majumdar v. Adyanath bhattacharjee, JCR Cal 936, the decision of this court in the case of Kudremukh Iron Ore Co. Ltd. v. Kooky Roadways Pvt Ltd. [1990] 69 Comp Cas 178, the observations made by the apex court in the case of Kesoram Industries and Cotton Mills Ltd. v. CWT AIR1966 SC 1370 , [1966 ]59 ITR767 (SC ), [1966 ]2 SCR688 , Harinagar Sugar Mills Co. Ltd. v. M. W. Pradhan AIR1966 SC 1707 , [1966 ]36 Compcas426 (SC ), [1966 ]60 ITR508 (SC ), [1966 ]3 SCR948 , the observations made by the Madras High Court in the case of Coimbatore Transport Ltd. v. Governor-General in Council [1948] 16 ITR 169 ; AIR 1949 Mad 73, and in the case of North Bucks Furniture Depositories Ltd. , In re [1939] 9 Comp cas 258 (Ch D) ; [1939] 2 All ER 549. (II) The financial solvency of a company is not an absolute bar to its being wound up. (II) The financial solvency of a company is not an absolute bar to its being wound up. In that, learned counsel would submit that once the court comes to the conclusion that there is a debt due as envisaged under Section 433 (e) of the Act, and the company has failed to pay the same within three weeks from the date of demand, then the deeming provision in Section 434 (1) (a) of the Act comes into operation and the company is deemed to be financially "unable to pay its debt" and an order of winding up follows as a matter of course, irrespective of the real financial position of the company and that the existing and probable assets of the company would be sufficient to meet the existing liabilities. In aid of this contention, learned counsel invites my attention to the observations made by a Division Bench of this court in the case of Kudremukh Iron Ore Co. Ltd. v. Kooky Roadways Pvt Ltd. [1990] 69 Comp Cas 178, Mitsugen Glazes Limited v. Varkey overseas Trading Company Private Ltd. [1999] ILR Karn 3354 ; [2001] 103 Comp Cas 117, the observations made by the Madras High Court in the case of C. Hariprasad v. Amalgamated commercial Traders Pvt. Ltd. AIR1964 Mad 519 , Public Prosecutor v. Abdul Wahab, AIR1964 Mad 367 , 1964 Crilj303 , the observations made by the Delhi High Court in the case of Caprihans India Ltd. v. Mey's Pharmaceuticals (P) ltd. , 1994 I AD (Delhi )349 , AIR1994 Delhi 178 , 53 (1994 )DLT421 ; and that of the Bombay High Court in the case of Seksaria Cotton Mills Ltd. v. A. E. Naik [1967] 37 Comp Cas 656; [1969] 2 Comp LJ 155. (III) That the respondent-company is liable to be wound up under Section 433 (f) of the companies Act, in addition to Section 433 (e) of the Act. In that, learned counsel would argue that the public interest served outweighs the harm that may be caused to the respondent-company, if the company is wound up. (III) That the respondent-company is liable to be wound up under Section 433 (f) of the companies Act, in addition to Section 433 (e) of the Act. In that, learned counsel would argue that the public interest served outweighs the harm that may be caused to the respondent-company, if the company is wound up. In support of this contention, learned counsel had drawn my attention to the observations made by the apex court in the case of Hind Overseas private Ltd. v. Raghunath Prasad Jhunjhunwala [1976] 46 Comp Cas 91 ; AIR1976 SC 565 , [1976 ]46 Compcas91 (SC ), (1976 )3 SCC259 , [1976 ]2 SCR226 , the observations made by the Orissa High Court in the case of State of Orissa v. Mayurbhanj Spinning and Weaving Mills, AIR1963 Ori 1 ; State bank of India v. Hegde and Golay Ltd. [1987] 62 Comp Cas 239 (Karn), the decision of this court in the case of Jagadale and Sons v. State of Karnataka, AIR1990 kant 251 , AIR1990 KAR 251 , ILR1990 KAR 101 , 1990 (1 ) Karlj18. (IV) The debt need not be precisely quantified to maintain a petition under Section 433 (e) of the act. (V) In view of the observations made by the apex court in Khoday Distilleries Limited v. State of karnataka, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 SCR759 , the respondent-company is bound to pay margin/commission to the petitioner-company. Since there is non-payment of debts due to the petitioner-company, the respondent-company requires to be wound up by this court. (VI) The contention of the respondent-company that the petition is barred by limitation is erroneous and untenable, and lastly, (VII) that the contention of the respondent-company that the petitioner-company should approach the civil court is erroneous and untenable. In that, it is stated, where there are no factual issues involved which require the appreciation of evidence and if the questions involved are pure questions of law, the discretion lies with the court to entertain the petition and the discretion vested in the court by statute cannot be taken away by contending that the forum of the civil courts bars the remedy under the provisions of the Companies Act. In aid of this contention, the reliance is placed on the observations made by the apex court in the case of harinagar Sugar Mills Co. Ltd. v. M. W. Pradhan AIR1966 SC 1707 , [1966 ]36 Compcas426 (SC ), [1966 ]60 ITR508 (SC ), [1966 ]3 SCR948 , wherein it is held that "a winding up petition is a perfectly proper remedy for enforcing payment of a just debt. It is the mode of execution which the court gives to a creditor against a company unable to pay its debt". ( 23 ) WITH the aid of the aforesaid issues in mind, learned counsel Sri B. G. Sridharan, contends that the petitioner-company having made out a case under Section 433 (1) (e) and (f) read with section 434 of the Act, it is entitled to seek for winding up of the respondent-company by raising a presumption under Section 434 (1) (a) of the Act, that the company is unable to pay its debts due and, therefore, the petitions require to be admitted and advertised. ( 24 ) LEARNED counsel for the respondent-company, Sri Udaya Holla would contend that the company petition is not maintainable either on law or on facts and the same is filed with the sole intention of coercing and pressurising the respondent-company to pay money which is not legitimately due. Secondly, he would contend that the amended Rules of 1989 or the orders made by the State Government dated November 13, 1989, while appointing the petitioner-company as a sole distributor does not authorise the petitioner-company to claim and collect the margin money from the manufacturers of liquor and since the debt is disputed and that dispute is bona fide, the company petition is not maintainable before this court since the triable issues arise for consideration. Thirdly, it is contended that the claim made by the petitioner-company is barred by limitation, since the claim relates to the period 1989 to 1996 and the company petition is filed in the year 1999,. e. , after a lapse of three years. Thirdly, it is contended that the claim made by the petitioner-company is barred by limitation, since the claim relates to the period 1989 to 1996 and the company petition is filed in the year 1999,. e. , after a lapse of three years. The issue with regard to the claim barred by limitation is a substantial question of law requiring recording of evidence and hearing and as such the company court in its summary jurisdiction is not competent to decide that question and it requires to be decided only by a civil court, if for any reason, the petitioner-company files any suit for the recovery of so called debt due from the respondent-company. Fourthly, the respondent-company is commercially solvent and is able to meet all its liabilities and commitments and therefore it is not just and proper to proceed to wind up the respondent-company, even if it is found that the debt is due and payable by the respondent-company to the petitioner-company. The margin money requires to be collected only from the wholesaler/purchaser and not from the manufacturer as admitted by the petitioner-company in its rejoinder and therefore, the claim with regard to the debt due from the respondent-company has no basis whatsoever. The claim made by the petitioner-company is wholly imaginary, doubtful and fanciful and the claim is not only disputed but also denied. When a company has over 7,000 shareholders and public financial institutions possess shares in the company whose market value is over Rs. 22 crores and the company is paying excise duty, sales tax and other taxes and cess aggregating to over Rs. 80 crores a year, it would be contrary to public interest to wind up the respondent-company even under the provisions of Section 433 (f) of the Act. Further, no winding up petition can be admitted unless the court comes to the conclusion that the defence put up is not in good faith and the same is a moonshine defence. The claim for compensation/damages is not a claim for a debt due and therefore, the company petition is not maintainable. Even otherwise, the claim requires elaborate investigation and therefore, it is not a debt as contemplated under Section 433 (e) of the Act. Any order of winding up would prejudice and affect the entire body of shareholders and the same would be contrary to public interest. Even otherwise, the claim requires elaborate investigation and therefore, it is not a debt as contemplated under Section 433 (e) of the Act. Any order of winding up would prejudice and affect the entire body of shareholders and the same would be contrary to public interest. Lastly, he would contend that the dispute is genuine and in good faith and the settlement of the dispute is possible only in an appropriate civil proceedings and therefore, this court should not entertain the petition for winding up and should direct the parties to settle the lis/dispute between them in appropriate civil proceedings. ( 25 ) IN support of their case, both sides would rely on several decisions of various High Courts and the Supreme Court and I will be making reference to those decisions while considering the legal issues canvassed by learned counsel. ( 26 ) NOW, I am still at the stage, whether this company petition requires to be admitted and advertised on the grounds pleaded by the petitioner-company and the defence canvassed by the respondent-company. At this stage, what requires to be seen and considered by this court is, whether the defence put forward is such that the company court should countenance it as valid, bona fide, and tenable defence. If this court comes to the conclusion with the available material on record and the documentary evidence produced by the parties to the lis at the time of hearing of the petition for admission, that the dispute is bona fide, the defence raised is a substantial one and not a mere moonshine, the defence is possible and tenable defence, this court would not admit the petition and also would not advertise the same. Secondly, if the company is solvent and is a growing concern and has done fairly well as evidenced by the balance-sheet for the period, when these petitions were pending before this court, it would not be just and equitable for this court to wind up the respondent-company or even proceed further with the company petition as the company petition is still at the stage of admission, since the admission and advertisement of the company petition is fraught with serious consequences. ( 27 ) BEFORE a petition is admitted and advertised, the nature of enquiry that requires to be made by this court is explained by a Division Bench of this court in the case of Airwings Pvt. Ltd. v. Viktoria Air Cargo Gmbh [1994] ILR Karn 2560 ; [1995] 84 Comp Cas 688. The court has observed (pages 720-22) : ". When a winding up petition is filed seeking winding up of the company under Section 433 (e) of the Act and from the material available from the petition and any other additional material which the court may require the petitioning-creditor to furnish if it is found that the respondent-company is a going concern and its commercial-cum-manufacturing activities are not suspended or are only temporarily suspended and it is employing number of workmen, then before admitting and advertising the petition, the following procedure is required to be adopted by the court: (a) The court may hold a summary enquiry, after issuing notice to the respondent-company giving it an opportunity to file its objections to the proposal for winding up, for ascertaining the following facts and for arriving at prima facie findings thereon : (i) Whether any debt is due from the respondent-company to the peti-tioning-creditor ; if yes, what is the amount of such debt ? (ii) Whether the said debt due to the petitioning-creditor is within limitation and is payable by the company and its defence is not valid but a mere moonshine and not a substantial one. (iii) Whether the company is unable to pay the said debt and its all other debts. (b) For arriving at prima facie findings on point numbers (a) (i) and (a) (ii), the court while holding a summary enquiry will hear the petitioning-creditor and the respondent-company, and will consider whatever evidence is offered by them in support of their respective cases. Such a summary enquiry need not be a detailed enquiry like a trial but it would be an enquiry for the purpose of finding out whether prima facie case is made out by petitioning-creditor on the aforesaid two aspects. Ordinarily in such summary enquiry whatever documentary evidence is offered by both the sides would be sufficient. But in exceptional cases if the court so feels necessary even oral evidence can be permitted to be led by contesting parties. Ordinarily in such summary enquiry whatever documentary evidence is offered by both the sides would be sufficient. But in exceptional cases if the court so feels necessary even oral evidence can be permitted to be led by contesting parties. The findings arrived at in such summary enquiry would be prima facie and tentative in nature and can be re-examined in greater details at the stage of trial of the petition if required and found necessary. We may, however, add a rider. Even in case of a company which is a going concern, if the court finds after hearing the petitioning creditor and the evidence led by it that there is an ascertained amount of debt which is due by the company to the petitioning creditor and such a debt is not time barred and that presumption arises under Section 434 (1) (a) or (b) that the company is unable to pay its debts, then in such case, the court may admit the petition ex parte without issuing notice to the company. However, as a company is a going concern, before ordering advertisement, a notice has to be issued to such a company for deciding whether the petition deserves to be advertised or not even after the admission order is passed ex parte against the company in the aforesaid circumstances. (c) For arriving at prima facie finding on point No. (a) (iii) in the aforesaid summary enquiry, the court may also go into the question at least prima facie as to whether the respondent-company is deemed to be unable to pay its debts on account of facts that may emerge on the record of such summary enquiry for bringing the company within the fold of deeming fiction envisaged by section 434 (1) (a) and/or Section 434 (1) (b) of the Act. If such deeming fiction is found to arise in the light of the evidence available on record during such preliminary enquiry, then in the light of the tentative findings reached by the court on issues (a) (i) and (a) (ii) and also keeping in view such deeming fiction that may have arisen on record for arriving at prima facie finding on point no. (a) (iii) the court may admit the petition and direct issuance of advertisement of the company petition. (a) (iii) the court may admit the petition and direct issuance of advertisement of the company petition. (d) However for arriving at prima facie finding on point No. (a) (iii) if it is found to be a case where there is no evidence at the stage of such preliminary enquiry about raising of deemed fiction under Section 434 (1) (a) and /or (b), then the court may also enquire, of course, prima facie, as to whether there is scope for raising deeming fiction as contemplated under Section 434 (1) (c ). For that purpose, the court may look into the evidence led on record by the petitioning-creditor as well as by the company and try to assess in a summary way as to whether the company is prima facie shown to be commercially insolvent as contemplated under Section 434 (1) (c ). If the court arrives at the tentative prima facie finding about commercial insolvency of the respondent-company then the respondent-company would be deemed unable to pay its debts including the debt of the petitioning creditor and then, in the light of the tentative findings on points No. (a) (i) and (a) (ii) and keeping in view such a deeming fiction arising under Section 434 (1) (c) the court may admit and advertise the petition. It is made clear that the aforesaid exercise of arriving at prima facie finding on points (a) (i), (a) (ii), and (a) (iii) by the court at preliminary stage before admitting and advertising the petition will be undertaken after considering the rival versions of the petitioning-creditor and the company and they would be purely tentative and prima facie finding which can be re-examined if need arises in greater details at the stage of trial of the company petition before passing the final order of winding up if any, after hearing the rival parties including the parties that might have appeared at the stage of trial pursuant to the advertisement. It is made clear that the prima facie nature of summary enquiry before admission or even after admission and before advertisement would be for arriving at findings on the aforesaid points in a summary manner. It is made clear that the prima facie nature of summary enquiry before admission or even after admission and before advertisement would be for arriving at findings on the aforesaid points in a summary manner. It is also clarified that for arriving at such prima facie findings on the aforesaid points after summary enquiry as indicated above, it is not necessary for the court to write a detailed order like final judgment but the order of the court should be sufficiently speaking so as to enable anyone who reads the order to find out as to what were the reasons which weighed with the court for arriving at said prima facie findings. Such reasoning must at least briefly indicate the view of the learned judge on the concerned evidence led by the respective parties on these points and how the court has weighed the same. " ( 28 ) A learned single judge of this court in the case of Divya Export Enterprises v. Producin Pvt. Ltd. [1990] ILR Karn 1610 ; [1991] 70 Comp Cas 692 had an occasion to consider the scope of section 433 (e) of the Act and the enquiry that requires to be done before admitting and advertising a winding up petition. In that, the court has stated (at pages 702, 703, 704) : "under Section 433 (e) of the Companies Act, a company may be wound up by the court if the company is unable to pay its debts. The provision vests a discretion in the court. But the discretion has to be exercised in the manner any other judicial discretion is to be exercised ; it is a judicial power warranting a proper exercise to grant relief in appropriate cases. If the respondent-company pleads defence in good faith and puts forth a substantial case against the petitioner's claim, the petition for winding up will be rejected. A mere assertion of a debt payable by the respondent-company is not sufficient to attract the discretion of the court in favour of the petitioner. . . If the respondent-company pleads defence in good faith and puts forth a substantial case against the petitioner's claim, the petition for winding up will be rejected. A mere assertion of a debt payable by the respondent-company is not sufficient to attract the discretion of the court in favour of the petitioner. . . Whenever the respondent-company comes forward and sets forth its defence, this court has to examine the nature of the respective cases pleaded by the parties and if a prima facie case is made out by the petitioner, the respondent should shoulder the onus of disproving it, by showing that its defence is in good faith and is one of substance and it is likely to succeed in point of law. The guidance to find out whether the defence is bona fide and one of substance, reference to the principles enunciated under Order 37, Rule 3, of the Civil Procedure Code may not be irrelevant. . . A plea which is frivolous, mere moonshine and which, on the face of it cannot be accepted or is clearly an afterthought, cannot be termed as raising a bona fide dispute. For this purpose, the court may have to examine all the disclosed circumstances. " ( 29 ) IN American Express Bank Ltd. v. Core Health Care Ltd. [1999] 96 Comp Cas 841, the gujarat High Court has observed as under (page 845) : "learned counsel for the petitioner in the first instance submitted that the petitioner having made out a case under Section 433 (1) (e) read with Section 434, he is entitled to an order for winding up ex debito justitiae by raising the presumption under Section 434 that the company is unable to pay its debts, and it is entitled to an order admitting the petition. This is not the stage at which the court should consider whether a winding up order can be made or not as that can only arise after the petition has been admitted and public notice whereof is advertised inviting objections. It is only if an objection to the winding up sought by the petitioner is raised from any quarters that the question of exercising discretion whether to order winding up or not would arise for consideration. On first principles, I am unable to agree with this submission. It is only if an objection to the winding up sought by the petitioner is raised from any quarters that the question of exercising discretion whether to order winding up or not would arise for consideration. On first principles, I am unable to agree with this submission. It is not in dispute and perhaps cannot be disputed in view of the settled law that a claim to an order of winding up is not a matter of right but rests in the discretion of the court on one or more of the grounds having been established as are mentioned in Section 433. However, there is no warrant to assume that the stage for exercise of such discretion arises only after the petition is admitted and the court cannot exercise that discretion even if on considering the totality of the materials as are made available on record by the petitioner it is satisfied that no order of winding up be made at the time of considering admission of the petition. It is at every stage of the proceeding from the time of issuing notice to the company until the winding up order is made, the court has to consider the material placed before it about the desirability of making that particular order to proceed with the matter. If a petition is filed on the ground that the company is unable to pay its debt, by complying with the provisions of Section 434, the issuance of notice is not a matter of course. If from the material disclosed in the petition and reply to the notice, a prima facie case of existence of a bona fide and reasonable dispute is spelt out, the court would be justified in dismissing the petition in limine at the threshold. If from the material disclosed in the petition and reply to the notice, a prima facie case of existence of a bona fide and reasonable dispute is spelt out, the court would be justified in dismissing the petition in limine at the threshold. Likewise, even after notice has been issued to the respondent-company before admitting the petition, it cannot be said that thereafter the court would not be considering the question whether a case is made out for not making a winding up order to proceed further notwithstanding the acknowledgment of debt to the petitioner, and, the court must agree to advertise the public notice thereof, sending a word about the winding up to all concerned, inviting objections and then alone consider the matter of making an order of winding up or not, even though the court on existing material is satisfied that it will not be just and equitable to order winding up. The principle is well-settled by a catena of decisions of different High Courts of the country, that the word "may" used in Sections 433 and 443 is indicative of the fact that even if one or more ground mentioned in Section 433 is made out the company is unable to pay its debt, it is still not mandatory, but rests in the discretion of the court whether to make an order of winding up. The court must in each case exercise its discretion in deciding whether in the circumstances of the case, it would be in the interest of justice to wind up the company. This is also manifest from section 443 of the Act which leaves it in the discretion of the court to make any one of orders envisaged therein. Section 443 also envisages relevant consideration in which winding up order may not be considered just and equitable. In the matter of the petition for winding up on the ground that the company is unable to pay its debt, the court has to bear in mind that winding up petition is not an alternative to the ordinary procedure for realisation of the debts due from the company, and the mechanism of winding up process is not to be used as a pressure tactic for enforcing realisation. For that the appropriate remedy is to seek enforcement under the ordinary law through remedies provided there. For that the appropriate remedy is to seek enforcement under the ordinary law through remedies provided there. At the same time, proceeding with the remedy for realisation of his debt, a creditor is not precluded from seeking remedy under the Companies Act as well by asking for the winding up of the company and realisation of all the assets of the company for the due discharge of all its liabilities. The object of the winding up petition being entirely different, the remedy provided under Section 433 has been held to be discretionary. One well-known Rule is that even in a case where indebtedness to the petitioner is not in dispute or doubt, courts do not order winding up where it is satisfied that it would not be in the interest of justice to wind up the company, or where the majority in value of the creditors do not favour the winding up. It is also well settled that a winding up order will not be made on a creditor's petition if it would not benefit him or the company's creditors generally. " ( 30 ) TO decide the correctness or otherwise of the submissions made by learned counsel for the petitioner-company and whether the defence of the respondent-company is bona fide and in good faith, and whether any arguable issues arise out of the defence pleaded by the respondent-company, and whether the alleged liability is not free from doubt, and with the material placed by the parties to the lis whether the petitioner-company has made out a prima facie case for admission and advertisement of the company petition and whether the respondent-company has a bona fide and a substantial defence against the claim made by the petitioner-company, it is necessary to find out what exactly is the position in relation to the debt on facts pleaded by the petitioner-company. ( 31 ) BY virtue of the amended Sub-clause (b) of Clause (ii) of Rule 3 of the rules, 1989, the State government is empowered to specify a Government owned or controlled company as a sole distributor to deal in all products of all distilleries or breweries or wineries in the State of karnataka or import liquor from outside the State for the purpose of distribution or sale within the State or export liquor outside the State. The Excise Commissioner is the licensing authority. The Excise Commissioner is the licensing authority. The State Government in exercise of the power under the aforesaid rules has notified the petitioner-company--MSIL as the sole distributor. The Excise Commissioner has issued distributor's licence as envisaged under the rules. Under the Government order dated November 13, 1989, the petitioner-company is entitled to charge reasonable margins in respect of its operations as distributor. Even according to the petitioner-company, by virtue of the amended rules and the orders of the State Government, every manufacturer of IMFL, beer, wine and fenny in the State of Karnataka is bound to supply their manufactured products to the petitioner-company as per the indent placed on it by the petitioner-company, which is again based on the indent placed by the wholesaler. At the time of supply, the manufacturer fixes the sale price and the petitioner-company would purchase the intended quantity as per the sale price fixed by the manufacturer. Thereafter, the wholesaler who purchases the said quantity from the petitioner-company will pay the margin/commission fixed by it. Therefore, even according to the petitioner-company, it is entitled to charge reasonable margins not exceeding 0. 5 per cent, on exports and 5 per cent, on sales made within the State and it is the wholesaler, who is liable to pay the margin/commission fixed by the State Government. According to the petitioner-company, the respondent-company, which was bound to supply all the quantities manufactured by it by way of sale did not supply the same, but sold it directly to the wholesaler. The assumption of the petitioner-company is, had the respondent-company processed their sale transaction with the wholesalers through the petitioner-company, it would have collected the margin/commission from the wholesalers. Since that was not done by the respondent-company, it is liable to compensate the petitioner-company. In sum and substance, the claim of the petitioner-company is that the respondent-company has breached the amended rules and thereby has prevented the petitioner-company from collecting its margin money and therefore it is liable to compensate the petitioner-company. The respondent-company not only has denied its liability for payment of margin money but also the so called debt in their reply to the statutory notice and also in the statement of objections filed before this court. The respondent-company not only has denied its liability for payment of margin money but also the so called debt in their reply to the statutory notice and also in the statement of objections filed before this court. ( 32 ) BASED on this factual foundation pleaded by the parties, what requires to be considered and decided is : (i) Whether there is a debt due and the respondent-company has failed, neglected or unable to pay the debt ? (ii) Whether there is prima facie dispute as to the debt and whether the defence raised is bona fide and substantial defence against the petitioner-company's claim ? ( 33 ) TO answer these primary issues, the meaning of the expressions "debt" and "unable to pay the same" used in Section 433 (e) of the Act requires to be considered. I need not have to search for an answer since the apex court in Pradeshiya Industrial and Investment Corporation of U. P. v. North India Petro Chemical Ltd. [1994 ]79 Compcas835 (SC ), (1994 )2 Complj50 (SC ), JT1994 (1 )SC 579 , 1994 (1 )SCALE526 , (1994 )3 SCC348 , [1994 ]1 scr815 , had an occasion to consider the meaning of those expressions while construing the provisions of Section 433 of the Companies Act. In that, the court has observed for the purpose of Section 433 (e) of the Act (page 842) : " (. . .) (1) there must be a debt; and (2) the company must be unable to pay the same ; an order under Clause (e) is discretionary ; a debt under this Section must be a determined or a definite sum of money payable immediately or at a future date. (. . .) 'unable to pay its debts'. . . should be taken in the commercial sense. In that, it is unable to meet the current demands,. . . that is to say, that its assets are such. . . as to make it reasonably certain as to make the court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. . . should be taken in the commercial sense. In that, it is unable to meet the current demands,. . . that is to say, that its assets are such. . . as to make it reasonably certain as to make the court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. " ( 34 ) B. G. Sridharan, learned counsel for the petitioner-company contends that in view of the observations made by the apex court is Khoday Distilleries Ltd's case, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 scc304 , [1995 ]supp6 SCR759 , the respondent-company is liable to pay the margin/ commission to the petitioner-company for having supplied its manufactured products directly to the wholesalers of liquor and that amount is quantified and ascertained and since the same is not paid in spite of repeated demands and within the time stipulated in the statutory notice, by the respondent-company, there is a debt due and the respondent-company is unable to pay the same. In support of this statement, learned counsel invites my attention to the penultimate para, of the judgment, wherein the apex court has observed (page 917) : "that under the interim orders, the appellants are liable to pay compensation to MSIL, if they lose in the appeals. This is in view of the commission, which is prescribed under the rules, which is to be paid to MSIL". Per contra, learned counsel Sri Udaya Holla for the respondent-company contends that the aforesaid observation made by the apex court cannot be construed as the law declared by the apex court to bind all the parties whether they are parties to the proceedings or not and thereby authorising the petitioner-company to collect the margin money from the respondent-company. According to learned counsel, the aforesaid observations made by the apex court was in view of the earlier interim orders made in the appeals filed by the parties before it, wherein the court while entertaining the appeals filed by M/s. Kho-day Distilleries and five others had imposed a condition that in the event the petitioners before them lose in the final hearing, provision should be made for the payment of compensation in favour of the third respondent namely M/s. Mysore sales International. Learned counsel would further contend that the amended rules do not authorise the petitioner-company from collecting any margin money either from the manufacturers or from the wholesalers and by an executive order, the State Government cannot authorise the petitioner-company to collect reasonable margin in respect of its operations as distributor. Learned counsel further states, that, even assuming that the executive order made by the State Government authorises the petitioner-company to collect the margin in respect of its operation as distributor, it cannot collect the maximum margin money, since the language employed in the executive order is that the petitioner-company is entitled to charge reasonable margin not exceeding 5 per cent, on sales made within the State without any rhyme or reason. The defence pleaded and projected seems to be reasonable, bona fide and substantial one and not a defence pleaded for the sake of defence. The issues that may require consideration and decision are whether the amendment rules authorise the petitioner-company to collect any margin money in respect of its operation as a distributor, and whether by an executive order, the State government could have permitted the distributor to collect the margin money without an appropriate statutory provision, and whether the petitioner-company could demand the margin money from distilleries or breweries or wineries for the alleged breach of the amended Rules and whether the petitioner-company could have quantified the maximum margin money payable from the manufacturers of liquor without rhyme or reason and whether the observations and directions issued by the apex court would also bind the respondent-company, which was not a party to those proceedings are triable issues, which require a detailed examination and investigation which is not permissible in a petition filed under Section 433 (e) of the Act, since what is required to be seen at the stage of admission and advertisement of the petition are, whether the petitioner-company has made out a prima facie case for admission and advertisement and whether the respondent-company has bona fide and substantial defence against the petitioner-company's claim. In fact, the claim made by, the petitioner-company in its rejoinder filed before this court shows that the liability pleaded by the petitioner-company against the respondent-company is highly doubtful and even according to them the margin requires to be paid only by the wholesalers under the executive orders issued by the State government to the distributors in its operation as distributor and since the respondent-company has directly conducted its business with the wholesalers without taking the assistance from the petitioner-company, which is appointed as the sole distributor under the amended rules, the respondent-company is liable to pay compensation. The so called payment of margin money, whether requires to be paid by the distilleries or the wholesalers is yet to be decided and whether the compensation amount claimed for the breach of the amended rules requires to be paid by distilleries or the wholesalers is another serious and debatable issue and these are the issues which are projected as defence against the petitioner-company's claim and those defence in my opinion, cannot be said either as frivolous or lacking in good faith. ( 35 ) THE respondent-company further contends that the claim is barred by limitation, since the claim relates to the period 1989 to 1996 and whereas the petition is filed in the year 1999,. e. , after a lapse of three years period. The undisputed facts are, the amended rules and the executives orders issued by the State Government authorising the petitioner-company to charge reasonable margin for inter-State sales and outside the State is dated September 13, 1989, and the final verdict on the legality or otherwise of the amended rules was pronounced by the apex court on December 15, 1995. The petitioner-company claims payment of margin for the period 1989 to 1996 and since that amount is not paid, in spite of repeated demands, the petitioner-company is of the view that the respondent-company is unable to pay its debts and, therefore, the company requires to be wound up. Admittedly, the claim made is for the period 1989 to 1996. The petitioner-company claims payment of margin for the period 1989 to 1996 and since that amount is not paid, in spite of repeated demands, the petitioner-company is of the view that the respondent-company is unable to pay its debts and, therefore, the company requires to be wound up. Admittedly, the claim made is for the period 1989 to 1996. If a suit for recovery of that amount were to be filed, the same was required to be filed within three years as envisaged under Section 72 of the Limitation Act, 1963, and if any claim made is of beyond three years, that would be barred by limitation and the trial court will not pass any decree on such a claim. Therefore, prima facie it looks to me that the claim is barred by limitation. ( 36 ) HOWEVER, Sri B. G. Sridharan, learned counsel for the petitioner-company contends that the provisions of law of the Limitation Act would not apply to proceedings under the provisions of the Companies Act. In my view, this contention of learned counsel may not be correct, in view of the observations made by a Division Bench of this court in Airwings Pvt. Ltd. v. Viktoria Air cargo Gmbh [1994] ILR Karn 2560 ; [1995] 84 Comp Cas 688, 720 wherein the court was pleased to observe that while making enquiry whether a petition for winding up filed under section 433 (e) of the Act requires to be admitted and advertised, one of the enquiries that requires to be made is "whether the said debt due to the petitioning creditor is within the limitation and is payable by the respondent-company". Therefore, this defence of the respondent-company cannot be either termed as frivolous or lacking bona fides. This issue is again based on the factual foundation and requires a detailed investigation. Therefore, the issue that the debt in question is barred by limitation is a substantial question of law requiring recording of evidence and hearing and the company court should not decide that question in its summary jurisdiction and leave it to the civil court to decide the issue, if the petitioner-company files a civil suit. Therefore, the issue that the debt in question is barred by limitation is a substantial question of law requiring recording of evidence and hearing and the company court should not decide that question in its summary jurisdiction and leave it to the civil court to decide the issue, if the petitioner-company files a civil suit. ( 37 ) THE respondent-company in its defence asserts that the "debt due" claimed by the petitioner-company is towards the non-payment of margin money and according to them the claim made is in the nature of compensation/damages for breach of the amended rules and the executive order issued by the State Government and therefore, a company petition is not maintainable for winding up in regard to claim for damages. In aid of this assertion, learned counsel for the respondent-company relies on the observations made by a Division Bench of this court in the case of Greenhills Exports (P.) Ltd. v. Coffee Board [2001] 106 Comp Cas 391; [2001] ILR Karn 2950 wherein the court has observed that the term "due debt" does not include claim for damages and, therefore, petition for winding up is not maintainable in regard to claim for damages. ( 38 ) THE State Government by its order dated November 13, 1989, had permitted the petitioner-company to charge and collect a reasonable margin on exports and internal sales of liquor in respect of its operations as distributor. Even according to the petitioner-company, the same requires to be paid by wholesalers and in the petition and rejoinder filed before this court, they contend that since the respondent-company has transacted business in liquor with the wholesalers contrary to the amended rules and orders made by the State Government and thereby has deprived the petitioner-company from collecting the margin from the wholesalers and, therefore, the respondent-company requires to be compensated that margin money which it would have collected, had the respondent-company supplied all its manufactured products to the wholesalers through the petitioner-company. Prima facie, it appears to me that the claim is for payment of compensation/damages for the alleged breach of the provisions of the amended rules and the orders passed by the State Government dated November 13, 1989, and if the claim is for damages, a petition for winding up is not maintainable, since the term debt does not refer to claim for damages. ( 39 ) NEXTLY, whether the amended Rules 1989 authorise the petitioner-company to collect the margin from the manufacturers of liquor for its operation as a distributor and whether by an executive order in the absence of appropriate amendment to the provisions of the Excise Act and the rules framed, could have permitted the petitioner-company to charge and collect margin is another debatable issue and that cannot be decided in a company petition for winding up. However, Sri B. G. Sridharan, learned counsel for the petitioner-company contends that in view of the observations made by the apex court in Khoday Distilleries Ltd's case, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 )SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 SCR759 , even the manufacturers are liable to pay commission, margin to the petitioner-company for its operation as a distributor. This contention of learned counsel seems to be on mere assumption for the sole reason that the subject matter before the apex court was only with regard to the validity or otherwise of the amended rules 1989, and the rules only provide for grant of a distributor's licence to deal in all products of all distilleries, or breweries or wineries in the State or import of liquor from outside the State for the purpose of distribution or sale within the State or export of liquor outside the State. Even otherwise, whether the directions issued by the apex court in Khoday Distilleries Ltd. 's case, 1996 I AD (SC )278 , AIR1996 SC 911 , JT1995 (9 )SC 449 , 1995 (7 ) SCALE262 , (1996 )10 SCC304 , [1995 ]supp6 SCR759 would bind the respondent-company and whether that direction came to be made in view of the conditions imposed while granting interim order are highly debatable issues. This is another facet of the dispute pleaded by the respondent-company by way of defence and that dispute in my opinion is substantial and not a mere dispute for denying its liability. If the respondent-company pleads a defence in good faith and puts forth a substantial case against the petitioner's claim, the petition for winding up will be rejected. This is another facet of the dispute pleaded by the respondent-company by way of defence and that dispute in my opinion is substantial and not a mere dispute for denying its liability. If the respondent-company pleads a defence in good faith and puts forth a substantial case against the petitioner's claim, the petition for winding up will be rejected. A mere assertion of a debt payable by the respondent-company is not sufficient to attract the discretion of the court in favour of the petitioner-company as observed by this court in divya Export Enterprises v. Producin Pvt. Ltd. [1990] ILR Karn 1610 ; [1991] 70 Comp Cas 692. ( 40 ) THE petitioner-company contends that the respondent-company is liable to be wound up on the ground that substantial amount of money is payable by the respondent-company and since it has failed to pay in spite of repeated demands and even after receipt of the statutory notice, the respondent-company is deemed to have become commercially insolvent and consequently in public interest and on just and equitable grounds, the respondent-company requires to be wound up. The defence pleaded by the respondent-company is that it is a growing concern and commercially solvent as evidenced by its balance-sheets produced before this court, but the reason for non-payment is that the so called debt is not payable by it. ( 41 ) A mere assertion of debt payable by the respondent-company is not sufficient to attract the provisions of Section 433 (e) of the Act, which says that there must be a debt and the company must be unable to pay the same and that expression should be taken in the commercial sense. A perusal of the assertions made in the statement of objections filed and the balance-sheets produced clearly demonstrate that the existing assets and liabilities of the company are more than sufficient to meet the existing liabilities including the so called liability of the petitioner-company and that the respondent-company is commercially solvent. On the facts of the case, the statutory presumption under Section 434 (1) (a) of the Act is replaced by the factual position and the company is solvent and able to pay its debts, if any. This is another redeeming feature in favour of the respondent-company. ( 42 ) IN the present case, the debt is disputed and the defence seems to be substantial and not mere moonshine. This is another redeeming feature in favour of the respondent-company. ( 42 ) IN the present case, the debt is disputed and the defence seems to be substantial and not mere moonshine. Under such circumstances, the apex court, while deeming the scope of Section 433 (e) of the Act in Madhusudan Gord-handas and Co. v. Madhu Woollen Industries P. Ltd. AIR1971 SC 2600 , [1972 ]42 Compcas125 (SC ), (1971 )3 SCC632 , [1972 ]2 SCR201 was pleased to observe (page 131) : "two rules are well settled. First, if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. The court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon and the sum demanded by the creditor was unreasonable. (See London and Paris Banking Corporation, In re [1874] LR 19 Eq. 444 ). Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company contended that the work had not been done properly was not allowed. (See Brighton Club and Norfolk Hotel Co. Ltd. , In re [1865] 35 Beav. 204 ). 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. (See A Company, in re [1894] 94 S. J. 369; [1894] 2 Ch. 349 (Ch. D) ). 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. (See Tweeds Garages Ltd. , In re [1962] Ch. 406 ; [1962] 32 Comp Cas 795 (Ch D ). 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. 406 ; [1962] 32 Comp Cas 795 (Ch D ). 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. Another Rule which the court follows is that if there is opposition to the making of the winding-up order by the creditors the court will consider their wishes and may decline to make the winding-up order. Under Section 557 of the Companies Act, 1956, in all matters relating to the winding-up of the company the court may ascertain the wishes of the creditors, The wishes of the shareholders are also considered, though, perhaps, the court may attach greater weight to the views of the creditors. The law on this point is stated in Palmer's Company Law, 21st edition, page 742, as follows : 'this right to a winding-up order is, however, qualified by another rule, viz. , that the court will regard the wishes of the majority in value of the creditors, and if, for some good reason, they object to a winding-up order, the court in its discretion may refuse the order. ' the wishes of the creditors will however be tested by the court on the grounds as to whether the case of the persons opposing the winding-up is reasonable ; secondly, whether there are matters which should be inquired into and investigated if a winding-up order is made. It is also well settled that a winding-up order will not be made on a creditor's petition if it would not benefit him or the company's creditors generally. The grounds furnished by the creditors opposing the winding-up will have an important bearing on the reasonableness of the case. (See P and ) macrae Ltd. , In re [1961] 31 Comp Cas 424 (CA) ). The grounds furnished by the creditors opposing the winding-up will have an important bearing on the reasonableness of the case. (See P and ) macrae Ltd. , In re [1961] 31 Comp Cas 424 (CA) ). " ( 43 ) THE Orissa High Court in Bichitrananda Panda v. Orissa Construction Corporation Ltd. [1999] 97 Comp Cas 345 was pleased to state (see headnote) : "on a petition for winding up a company under Section 433 (e) of the Companies Act, 1956, the principles on which the court acts are (1) that the defence of the company is in good faith and one of substance ; (2) that the defence is likely to succeed in point of law; and (3) that the company adduces prima facie proof of the facts on which the defence depends. If the debt was bona fide disputed, there cannot be 'neglect to pay' within Section 434 (1) (a) of the Companies Act, 1956. If there is no neglect, the deeming provision does not come into play, and the ground for winding up, namely that the company is unable to pay its debt, is not substantiated. The expression 'neglect to pay the sum demanded' in Section 434 (1) (a) of the Act is not equivalent to the word 'omitted'. Neglect to-pay a debt on demand is omission to pay without reasonable cause. When a debt is bona fide disputed by the alleged debtor, there is no neglect to pay". ( 44 ) IN Smt. Vijayalakshmi v. Hari Hara Ginning and Pressing (P.) Ltd. [2001] 103 Comp Cas 195, the Andhra Pradesh High Court was pleased to observe (page 198) : "the disputed questions of fact cannot be decided in the company petition. It is well-settled that the procedure under Section 433 of the Indian Companies Act is summary. When the company produces prima facie proof of facts on which the defence depends and which is probable, and there is likelihood to succeed in point of law, it cannot be said that the company has neglected to pay within the meaning of Section 434 (1) (a) of the Companies Act. Bona fide dispute implies the existence of substantial ground for the dispute raised. Bona fide dispute implies the existence of substantial ground for the dispute raised. " ( 45 ) THE observations made by the apex court and this court would amply demonstrate that if the debt is bona fide disputed, there cannot be neglect to pay within the meaning of Section 434 (1) (a) of the Act. If there is no neglect, the deeming provision does not come into play and the ground for winding up namely, that the company is unable to pay its debts is not substantiated. Section 434 (1) (a) of the Act enacted only a Rule of presumption and no more. The apex court in Amalgamated Commercial Traders (P.) Ltd. v. A. C. K. Krishnaswami [1965] 35 comp Cas 456 was pleased to state (headnote) : "it is well-settled that a winding up petition is not a legtimate means of seeking to enforce payment of a debt which is bona fide disputed by the company. A petition presented ostensibly for 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. " ( 46 ) IN Kamadenu Enterprises v. Vivek Textile Mills Pvt. Ltd. [1982] 1 KLJ 296 ; [1984] 55 comp Cas 68, this court was pleased to observe : "this court having jurisdiction under Section 433 of the Companies Act is not a court which is essentially meant for settling money disputes between parties. This jurisdiction is to subserve the object of winding up the companies which have not paid their debts or which are unable to pay their debts. Therefore, the first prerequisite must be to establish prima facie a debt against the company. But when a claim or debt is disputed, the proper forum for that is a civil court. " ( 47 ) THE claim for payment of debt due by the petitioner-company is seriously disputed. Such disputes cannot possibly be decided in the winding up proceedings. That requires to be decided in a properly framed suit. Secondly, in my view, the defence raised by the respondent-company on the face of it appears to be bona fide and such defence is likely to succeed. Therefore, it is not a fit case either to admit or permit the petitioner-company to take out advertisement of this company petition. Accordingly, this company petition is rejected. Secondly, in my view, the defence raised by the respondent-company on the face of it appears to be bona fide and such defence is likely to succeed. Therefore, it is not a fit case either to admit or permit the petitioner-company to take out advertisement of this company petition. Accordingly, this company petition is rejected. ( 48 ) THE facts and issues raised in the other company petitions are not only similar but also identical as in Co. P. No. 32 of 1999. The reasoning which I have stated in that petition, requires to be applied in these cases also. Therefore, adopting the reasons stated in the company petition, these company petitions also require to be rejected. Accordingly, they are rejected. In the facts and circumstances of the case, parties are directed to bear their own costs. Ordered accordingly.