N. K. SODHI, C. J. ,, J. ( 1 ) THIS order will dispose of a bunch of 34 Company appeals filed by mysore Sales International Limited - a Government Company (for short, 'msil'), under Section 483 of the Companies Act, 1956 (hereinafter called as the 'act'), read with Section 4 of the Karnataka high Court Act, 1961 challenging the common order passed by the learned Single Judge dismissing the Company petitions filed by it seeking winding up of the respondent-companies on the ground that they are unable to pay their debts. Since identical questions of law and fact arise in all the appeals, these are being disposed of by a common order. For the sake of convenience the facts are being taken from OSA no. 18 of 2002 which arises out of Company Petition No. 32 of 1999 filed under Section 433 (e) read with Section 434 of the Act for the winding up of United Breweries Limited (hereinafter referred to as the 'company' ). Learned Counsels for the parties are agreed that the decision in this case will govern the other cases as well. ( 2 ) BEFORE we deal with the claim of MSIL, it is necessary to refer to the background in which it is made. The State of Karnataka noticed that tax evaded liquors called 'seconds' had found their way in the market in plenty. It thought that it would be better and advantageous to have an exclusive distributor which is a Government Company through which entire liquor flow in the State could be channelised. The Government was of the view that this system would be easier and convenient to locate and prevent spurious and tax evaded liquors to come in the market. With a view to achieve this object the Government in its wisdom decided to amend the Karnataka Excise (Sale of Indian and Foreign liquors) Rules, 1968 (hereinafter referred to as the 'rules'), which have been framed under sub-section (1) of Section 71 of the Karnataka Excise act, 1965. Rule 3 of the Rules, amongst others, was amended on 13-9-1989 by the Karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989. Since we are concerned with this amendment the same is reproduced hereunder for facility of reference.-"2. Rule 3 of the Rules, amongst others, was amended on 13-9-1989 by the Karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989. Since we are concerned with this amendment the same is reproduced hereunder for facility of reference.-"2. Amendment of Rule 3.-In Rule 3 of the Karnataka excise (Sale of Indian and Foreign Liquors) Rules, 1968 (hereinafter referred to as the 'said Rules'), for clause (11), the following clause shall be substituted, namely.- " (11) Distributor Licence.- (a) A licence shall be granted by the Excise Commissioner for the whole of the state or any part thereof to deal in the products of all distilleries or breweries or wineries in the State or to import liquor from outside the State for the purpose of distribution or sale within the State or as the case may be or part thereof or to export liquor outside the State. The licensee shall establish not less than one depot in each district within the state or, as the case may be, within the part of the State, as the Excise Commissioner may specify in this behalf. (b) The licence under this clause shall be issued only to such Company owned or controlled by the State Government as the State Government may specify. (c) The licence shall be in Form CL-11 and shall be subject to renewal each year at the discretion of the Excise commissioner. (d) The Excise Commissioner may also permit the licensee to sell foreign liquor. Notwithstanding anything contained in this clause, the licences under this clause granted for the year 1989-90 shall be valid until the licence is surrendered or cancelled or withdrawn under Sections 29, 30 and 31 of the Act and with same terms and conditions already prescribed". ( 3 ) AMENDMENT of Rule 8.-In Rule 8 of the said Rules, for item 13, the following shall be substituted, namely.-"13. Distributor licence Rs. 5,00,000/- (fee for licence or renewal) plus Rs. 10,000/- per depot, per annum". ( 4 ) INSERTION of new Rule 9-A.-After Rule 9 of the said rules, the following rule shall be inserted, namely.-"9-A. Affixture of excise label.-No licensee under these rules shall with effect from such date as the State government may notify in this behalf store or sell any bottle of liquor which is not affixed with the excise label specified by the Commissioner". ( 5 ) AMENDMENT of Form CL-1.-In condition No. 3 of Form cl-1 appended to the said rules, the words "from licensed distillery/brewery/winery located within the State and or" shall be deleted. ( 6 ) AMENDMENT of Form CL-11.-In Form CL-11 appended to the said rules.- (a) for condition No. 2, the following shall be substituted, namely.- "the licensee may purchase the liquor only from distilleries/breweries/wineries located within Karnataka or import from outside the State". (b) for condition No. 3, the following shall be substituted, namely.- "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" ". A communication dated 15-9-1989 was sent by the Commissioner and secretary to Government, Home Department, to MSIL informing the latter that the State Government intended to specify it for the grant of a licence under the Rules as the sole distributor and that it should make suitable preparatory arrangements in this behalf. By order dated 13-11-1989, the State Government specified MSIL for the purpose ol sub-clause (b) of clause (11) of Rule 3 of the Rules. A reading of this order along with the Rules as amended in the year 1989 would make it clear that MSIL was made the sole distributor to deal in the products of all distilleries or breweries or wineries in entire State of Karnataka including the import and export of liquor. Since the conditions of the licence were also amended by the Rules, the sole distributor had to purchase liquor only from distilleries/breweries/wineries located within the State of Karnataka or could import liquor from outside the State. It had to sell liquor only to a person who was holding CL-1 licence in the state or export liquor to a person outside the State who was holding a valid licence to deal in liquor. Some other set of Rules had also been amended and it had been made obligatory for all manufacturers of liquor within the State of Karnataka to sell their liquor only to MSIL the sole distributor in the State. In other words, MSIL as the sole distributor of liquor had to purchase the same only from the manufacturers from within the State and sell it to the wholesalers. 3. In other words, MSIL as the sole distributor of liquor had to purchase the same only from the manufacturers from within the State and sell it to the wholesalers. 3. By a letter dated 13-11-1989, the Commissioner and Secretary to the Government, Home Department communicated to MSIL that it had been specified as the Company wholly owned and controlled by the government for purposes of issue of distributor's licence under the powers vested with the State Government under sub-clause (b) of clause (11) of Rule 3 of the Rules. MSIL had also been informed that it will deal in all products of all 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 with immediate effect and until further orders. Para 4 of this communication on which msil has based its claim reads as under: "msil shall be entitled to charge reasonable margins not exceeding 0. 5% on exports and 5% on sales within the State in respect of its operations as distributor". As already observed, one of the conditions of the distributor's licence granted to MSIL was that it would purchase liquor only from distilleries/breweries/wineries from within the State and sell the same to a person who is holding CL-1 licence in the State or export it to persons outside the State holding a valid licence to deal in liquor. 4. Even before the amended Rules could be brought into force their constitutional validity as amended in the year 1989 came to be challenged in this Court by the manufacturers and others and the main attack was against the provisions which enabled the State Government to make a Government Company like MSIL as the sole distributor of liquor in the State. A large number of writ petitions were filed which came up for hearing before a learned Single Judge who by his order dated 28-9-1989 admitted the same and referred them to be heard by a division Bench. In the meantime, the operation of the amended Rules was stayed. The Division Bench by its order dated 13-11-1989 dismissed the writ petitions and upheld the validity of the Rules. The judgment of the Division Bench is reported in M/s. Jagadale and Sons v State of karnataka and Others. 5. Feeling aggrieved by the. In the meantime, the operation of the amended Rules was stayed. The Division Bench by its order dated 13-11-1989 dismissed the writ petitions and upheld the validity of the Rules. The judgment of the Division Bench is reported in M/s. Jagadale and Sons v State of karnataka and Others. 5. Feeling aggrieved by the. order of this Court in Jagdale's case, some of the manufacturers' and wholesalers of liquor in the State of karnataka filed special, leave petitions in the Supreme Court challenging the vires of the Rules as amended in the year 1989. When this matter came up for hearing before the learned Judges of the Apex court on 20-11-1989 leave was granted and the appeals were ordered to be heard by a Bench of 3 Judges and during the pendency of the appeals the operation of the amended Rules was ordered to be stayed on certain conditions specified in the order. Since MSIL is basing its claim not only on the communication dated 13-11-1989 (Annexure-F with the Company petition) but also on the interim order granted by the Supreme Court it is necessary to reproduce the same for facility of reference. It reads as under: "order special leave granted. List these matters for final hearing on 15-2-1990 before Bench of three Hon'ble Judges. In the meantime there will be stay in terms of the prayer (b) (i)', (ii) and (iii) of the stay petition subject to the following.- (1) This will not operate-as a stay of licence granted in favour of M/s. Mysore Sales International Limited; (2) Manufacturers and wholesalers will be free, if they want, to deal with M/s. Mysore Sales International limited;. (3) By virtue of this order the exis ting licence holders will be free to operate their licences upto the end of June 1990; (4) Mysore Sales International Limited may appoint its officers at the Distilleries for the purpose of labelling and supervising the verification of stock. The said officers posted will be supervising the labelling of excise adhesive; (5) For the purpose aforesaid M/s. Mysore Sales international may appoint such officers as may be necessary. The said officers posted will be supervising the labelling of excise adhesive; (5) For the purpose aforesaid M/s. Mysore Sales international may appoint such officers as may be necessary. The cost of establishment, leave salary, g. P. Fund, Pension Contribution of such officers shall be paid by the distilleries in advance quarterly; (6) In case ultimately the petitioners lose in the final hearing provision should be made for the payment of compensation in favour of third respondent namely m/s. Mysore Sales International; (7) Importers will furnish all the particulars to respondent 3, viz. , M/s. Mysore Sales International; (8) The petitioner will keep separate account of all the dealers pursuant to the interim orders of the High court and this Court, and supply the same to respondents 1, 2 and 3". (emphasis supplied) a reading of the aforesaid order of the Supreme Court makes it abundantly clear that the stay of operation of the amended Rules did not operate as a stay of the distributor's licence granted in favouir of MSIL. Manufacturers like the Company were free to sell their liquor to MSIL but they could also sell it to other distributors. Distributors who were holding a valid licence on the date of coming into force of the amended rules were allowed to operate their licence upto the end of June 1990. Their Lordships further directed that if the petitioners before them were to lose at the final hearing, provision should be made for the payment of compensation to MSIL. All the petitioners before the Supreme Court were required to keep separate accounts of their operations in pursuance to the interim order and those were to be supplied to respondents 1, 2 and 3 therein inchiding MSIL. It may be mentioned that some of the respondent-Companies who are now sought to be wound up before us were the appellants in the Supreme Court challenging the order of this court in Jagadale's case, but they withdrew their appeals before the cases were finally disposed of. The appeals were heard and finally dismissed on 15-12-1995 and the case of M/s. Khoday Distilleries limited v State of Karnataka and Others. , paragraph 21 of this judgment on which MSIL is basing its claim read as under:"21. In the premises, these appeals have no merit and they are dismissed with costs. The appeals were heard and finally dismissed on 15-12-1995 and the case of M/s. Khoday Distilleries limited v State of Karnataka and Others. , paragraph 21 of this judgment on which MSIL is basing its claim read as under:"21. 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". It appears that M/s. Khoday Distilleries Limited which was one of the appellants before the Supreme Court did not pay the amount which, according to MSIL, had become due to it on the basis of the interim order and also in terms of the directions issued in para 21 of Khoday distilleries case. A contempt petition was moved in the Supreme Court by MSIL alleging violation of the Court order by Khoday Distilleries and in that petition the Supreme Court directed the alleged contemnor to make payment of the entire amount claimed by MSIL within four weeks from the date of the order. It is admitted before us that Khoday distilleries made the payment to MSIL in pursuance to that direction. 6. It is admitted before us that Khoday distilleries made the payment to MSIL in pursuance to that direction. 6. MSIL claims that respondent-companies even though not parties to the decision of the Supreme Court in Khoday Distilleries case are similarly situated like Khoday Distilleries and since they took the benefit of the interim order passed by the Supreme Court and sold their products to their distributors and wholesalers, they were bound by the conditions imposed by the Supreme Court and like Khoday Distilleries they were liable to pay the amount due to MSIL as margin money in terms of the interim order and also in terms of the communication dated 13-11-1989 addressed by the State of Karnataka to MSIL entitling it to charge reasonable margin while operating as the sole distributor in the state. The argument, indeed, is that but for the interim order passed by the Supreme Court, the respondent-companies could not have sold their products to any other distributor or wholesaler and that if they had sold their products to MSIL, the latter would have become entitled to claim margin money of 5% on the sales which it would have made, to the distributors/wholesalers in the State. Shri V. A. Mohta, learned Senior counsel appearing for MSIL in all the cases strenuously urged that the orders of the Supreme Court both interim and final were orders in rem which bind not only the parties before the Supreme Court but also other manufacturers like the respondent-Companies and wholesalers who took advantage of the said order and carried on their operations with other distributors and wholesalers which they could not have continued if the operation of the amended Rules had not been stayed by the supreme Court. He goes on to contend that all the respondent-companies were required to maintain the accounts of their operations with their distributors and wholesalers and that they are liable to pay the margin money which MSIL would have charged had they sold their products through MSIL. Reliance in this regard is placed on the interim order passed by the Supreme Court on 20-11-1989 read with para 21 of the final direction issued in Khoday Distilleries case. The letter dated 13-11-1989 from the-State Government to MSIL entitling it to charge margin money has also been relied upon. Reliance in this regard is placed on the interim order passed by the Supreme Court on 20-11-1989 read with para 21 of the final direction issued in Khoday Distilleries case. The letter dated 13-11-1989 from the-State Government to MSIL entitling it to charge margin money has also been relied upon. Reference has also been made to the order of the Supreme Court passed in the contempt petition filed against Khoday Distilleries. This claim of MSIL is seriously contested and disputed by the Company. Since the amount claimed had not been paid to MSIL it served a legal notice dated 1-1-1997 on the Company M/s. United Breweries Limited informing the latter that it was bound to sell its liquor only to the former and in that event MSIL would have sold the same to the wholesalers holding CL-1 licence and in the process it would have received the margin money. MSIL called upon the Company to submit true and correct statement of accounts regarding direct transactions carried on by it with effect from 13-11-1989 upto the date of receipt of notice and pay 5% on the basis of the dealings it had with other distributors and wholesalers within the state of Karnataka and 0. 5% on exports and interest at 18% on that amount had also been claimed. The Company did not bother to send a reply to this notice. It appears that MSIL approached the Department of excise, Government of Karnataka and collected some information from the department regarding the transactions of sale effected by the company with effect from 13-11-1989 till the final decision of the case by the Supreme Court on 15-12-1995 and after calculating the 5% margin money on the sales effected within the State of Karnataka called upon the Company by a registered notice dated 21-11-1998 to pay a sum of Rs. 2,853. 83 lacs together with interest at the rate of 18% per annum from 13-11-1989 to October 19, 1998 failing which MSIL would take steps to seek the winding up of the Company under Section 439 of the Act. This notice was sent under Section 434 of the Act. 2,853. 83 lacs together with interest at the rate of 18% per annum from 13-11-1989 to October 19, 1998 failing which MSIL would take steps to seek the winding up of the Company under Section 439 of the Act. This notice was sent under Section 434 of the Act. The Company sent a reply dated December 29, 1998 denying its liability to pay any amount to msil on the basis of sales effected by it during the period when the operation of the amended Rules remained stayed under the interim order of the Supreme Court. The stand taken by the Company was that no amount was payable by it to MSIL in respect of beer manufactured by it which had not been distributed by MSIL. It was further pointed that MSIL could, at the most, collect the commission from the wholesalers or retailers. MSIL had also been informed that the claim made by it was wholly untenable and that it was under a mistaken notion about its rights under the Excise Rules and the interpretation of the judgment of the Supreme Court and that these did not permit it to claim any commission from the Company. ( 7 ) SINCE the claim had been denied by the Company, MSIL filed a company petition under Section 433 (e) read with Section 434 of the Act alleging that the Company had failed to pay the debt due from it despite a statutory notice having been served under Section 434 of the Act and therefore it was unable to pay its debts and was liable to be wound up. ( 8 ) IN response to the notice issued by this Court the Company filed a detailed written statement controverting the averments made in the company petition. It was pleaded that the Company was one of the leading breweries in the country and was solvent and cash rich having reserves and surplus aggregating over Rs. 543 crores and that it had been consistently making profits for the last several decades. It was further pleaded that MSIL had based its claim on the letter dated 13-11-1989 to collect commission/margin at 5% on the sale of liquor within the State and 0. 5% on its export and that on the basis of that letter MSIL was not entitled to claim the commission/margin money. It was further pleaded that MSIL had based its claim on the letter dated 13-11-1989 to collect commission/margin at 5% on the sale of liquor within the State and 0. 5% on its export and that on the basis of that letter MSIL was not entitled to claim the commission/margin money. According to the Company MSIL is not entitled to recover margin money from the manufacturers like the Company and if at all it could recover the amount on the basis of the said letter, it could do so from the distributors/wholesalers/retailers to whom liquor is sold. Reference has been made to instances where MSIL acted as a distributor for many manufacturers but it did not collect any commission/margin from the manufacturer. Reference has also been made to the correspondence exchanged between MSIL and the Company to contend that the former had clearly understood that 5% margin money was recoverable only from the wholesaler to whom liquor was sold. The Company in its reply has also referred to the prevalent trade practice constantly followed according to which the manufacturer sells liquor to the distributor/wholesaler at a fixed price and the distributor/wholesaler in turn sells it to the retailer/consumer after adding its margin thereto. The retailer in turn adds his margin to the price and sells liquor to the consumer. It is the case of the Company that according to the trade practice the manufacturer does not pay any margin money. It is also averred that the petition is based on a totally fanciful claim made by msil against the Company and that no amount is due. The claim is said to be based on a misreading of the Government letter. As regards the orders of the Supreme Court it is stated that the Company was not a party in any of the appeals in the Supreme Court and therefore the interim order dated 20-11-1989 and the final order dated 15-12-1995 do not bind the Company and that no amount is due to MSIL on the basis of these orders. ( 9 ) MSIL filed a rejoinder reiterating that the amount as claimed by it was due from the Company on the basis of the Government letter dated 13-11-1989, the Rules as amended and also on the basis of the orders passed by the Supreme Court. ( 9 ) MSIL filed a rejoinder reiterating that the amount as claimed by it was due from the Company on the basis of the Government letter dated 13-11-1989, the Rules as amended and also on the basis of the orders passed by the Supreme Court. ( 10 ) ON a consideration of the submissions made by both the parties the learned Single Judge formulated the issues involved in the case and came to the conclusion that the debt due as claimed by MSIL is seriously disputed by the Company and that such disputes could not possibly be decided in winding up proceedings. The learned Company Judge was also of the view that the defence raised by the Company on the face of it appears to be bona fide and that the defence is likely to succeed and therefore he did not admit the Company petitions and dismissed the same. Hence these appeals by MSIL. ( 11 ) WE have heard the learned Senior Counsel on both sides and find no ground to take a view different from the one taken by the learned company Judge. There is no gainsaying the fact that after the Rules were amended in the year 1989 MSIL had been specified on 13-11-1989 by the Government of Karnataka under sub-clause (b) of clause (11) of rule 3 of the Rules as the sole distributor to deal in all products of all 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 of liquor outside the State. The Government permitted MSIL to charge reasonable margins not exceeding 0. 5% on exports and 5% on sales within the State in respect of its operations as a distributor. All manufacturers of liquor in the State including the Company were required to sell their products to MSIL which in turn could sell to the wholesalers by charging reasonable margins not exceeding 5% on such sales. The operation of the amended Rules was first stayed by this Court and later by the Supreme Court. The writ petitions filed in this Court were dismissed and so were the appeals in the Supreme Court and therefore the stay order came to an end. The dispute herein is for the period during which the operation of the Rules remained stayed. The writ petitions filed in this Court were dismissed and so were the appeals in the Supreme Court and therefore the stay order came to an end. The dispute herein is for the period during which the operation of the Rules remained stayed. During the said period the manufacturers were free to sell their liquor to other distributors though they could sell the same to MSIL as well. The case set up by MSIL is that the Company was required to process its sale transactions only through MSIL and had it done so, MSIL would have undoubtedly collected the margin money of 5% from the wholesalers and since it did not do so it was liable to compensate MSIL in this regard for the loss suffered by it (MSIL) Reliance is placed on the judgment of the supreme Court in Khoday Distilleries case. The precise plea taken by msil in its rejoinder may be reproduced hereunder: "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 in this behalf and this point is fully covered by the decision of the Hon'ble Supreme Court in the case of M/s. Khoday Distilleries Limited v State of Karnataka, AIR 1996 SC 911 : (1996)10 SCC 304 . . . . . . . . . . However, the fact remains that the respondent-Company has failed to supply the quantities of liquor to petitioner-Company whenever the said quantity was required to be sold to wholesalers, with the result, the respondent-Company is liable to compensate the losses sustained by the petitioner-Company by way of margin/commission in respect of those sales. The distinction sought to be made by the respondent with regard to payment of margin/commission is not correct". A reading of the aforesaid plea makes it abundantly clear that MSIL in the winding up petition is making a claim for compensation for the loss allegedly suffered by it which cannot be equated with a debt due from the Company so as to entitle it to maintain a petition to wind up the company under Section 433 (e) of the Act. Under this clause a Company can be wound up if it is unable to pay its debts. Under this clause a Company can be wound up if it is unable to pay its debts. A debt is a sum of money which becomes payable by the Company or may become payable in future on the basis of an existing obligation. It must be a determined or definite sum of money payable immediately or at a future date but would not include any claim for unliquidated damages or a sum of money which is capable of being ascertained. When the alleged creditor makes a claim for compensation it remains a claim and does not become a debt due till it is adjudicated either by a Court or in any other manner known to law. In the case before us the claim made by MSIL has not been determined by any Court or Competent Authority. A notice had been issued to the Company to produce its statements of account and on its refusal/failure to do so MSIL approached the Excise Department to find out the sale transactions of the Company and on that basis it has worked out its commission/margin money at the rate of 5% on the sales made within the State which according to MSIL is payable by the company. This is obviously a disputed amount and a claim for compensation and cannot be said to be a debt due from the Company. According to MSIL, it has suffered a loss because the Company did not process its sale transactions through it and had it done so MSIL would have collected the margin money from the wholesalers. Such claims cannot form the basis of a winding up petition and the learned Single judge was, therefore, right in not entertaining the petition. ( 12 ) THERE is yet another reason why MSIL could not maintain a winding up petition against the Company for the recovery of the amount allegedly due under the letter dated 13-11-1989. All that the letter said was MSIL was entitled to charge reasonable margins not exceeding 0. 5% on exports and 5% on sales within the State in respect of its operations as a distributor. The letter only prescribes the maximum that could be charged but it did not prescribe the amount that was actually to be charged. Some person or authority had to decide how much was to be charged. 5% on exports and 5% on sales within the State in respect of its operations as a distributor. The letter only prescribes the maximum that could be charged but it did not prescribe the amount that was actually to be charged. Some person or authority had to decide how much was to be charged. Assuming MSIL decides to charge the maximum of 5% as margin money, it is open to the Company to dispute the same and contend that something lesser was payable. It is thus clear that whatever amount MSIL is seeking to recover on the basis of this letter is a disputed amount and cannot be said to be a debt due from the company. ( 13 ) THE learned Senior Counsel appearing for the Company strenuously urged that the State Government while appointing MSIL as the sole distributor did not authorise it to claim and collect the margin money from the manufacturers of liquor and that the amount that is sought to be recovered on the basis of the letter dated 13-11-1989 is disputed and that the dispute is bona fide. According to the learned senior Counsel the Company petition raised triable issues for consideration and therefore, it was not maintainable. What is emphasised by the learned Senior Counsel is that the margin money could be recovered only from the wholesalers or retailers to whom liquor was sold by MSIL and that it could not be recovered from the Company which is a manufacturer. There is considerable merit in this contention. We have already referred to the letter dated 13-11-1989 by which MSIL had heen declared as the sole distributor of liquor in the State and it is clearly stipulated therein "that MSIL shall be entitled to charge reasonable margins not exceeding. . . . 5% on sales within the State". Reasonable margin is a margin which the distributor collects from the person to whom he sells. It is thus clear that MSIL could collect margin money from the wholesalers and retailers to whom liquor was sold. The company is a manufacturer of liquor and MSIL was not selling liquor to it. MSIL itself clearly understood the Government letter to mean that margin money was payable to it by the wholesalers. It is thus clear that MSIL could collect margin money from the wholesalers and retailers to whom liquor was sold. The company is a manufacturer of liquor and MSIL was not selling liquor to it. MSIL itself clearly understood the Government letter to mean that margin money was payable to it by the wholesalers. MSIL in its letter dated 4-5-1993 addressed to the Company made a grievance that the latter was giving direct supplies of liquor to the wholesalers which acted as a deterrent on the wholesalers from purchasing liquor from MSIL because they had to pay 5% more. This is what MSIL stated in its letter (copy of which is Annexure-R7 with the written statement filed by the company):"since U. B. Limited is also giving direct supplies to the wholesalers and when the wholesalers buy from MSIL they have to pay 5% more and this is acting as deterrent on the wholesalers from approaching MSI1". The claim made by MSIL against the Company on the basis of the government letter dated 13-11-1989 is clearly misconceived and not bona fide. We are therefore satisfied that no amount could be recovered from the Company on the basis of this letter. If at all any amount could be recovered on the basis of that letter it could be only from the wholesalers and retailers to whom liquor had been sold. ( 14 ) THE amount claimed by MSIL is also disputed on the ground that as per the trade practice which is followed consistently, the margin money is payable by the wholesalers/retailers to whom liquor is sold and it is never paid by the manufacturer. If such a practice is prevalent, no amount is payable by the Company. Whether such a practice is prevalent or not is a matter of evidence and in the very nature of things such issues could not be decided on summary proceedings in a winding up petition and the learned Company Judge was right in dismissing the company petition. If such a practice is prevalent, no amount is payable by the Company. Whether such a practice is prevalent or not is a matter of evidence and in the very nature of things such issues could not be decided on summary proceedings in a winding up petition and the learned Company Judge was right in dismissing the company petition. ( 15 ) SRI V. A. Mohta, learned Senior Counsel appearing for MSIL laid great stress on the interim order passed by the Supreme Court and also on the final order dated 15-12-1995 in Khoday Distilleries case and urged that these orders were orders in rem and were binding on all those who took benefit thereunder including the Company even though it was not a party in the appeal before the Supreme Court and therefore it was not only required to maintain its accounts as directed by the supreme Court but on the dismissal of the appeals on 15-12-1995 it became liable to pay compensation to MSIL in terms of the direction contained in para 21 of the judgment. We are not impressed with this contention. The interim order passed by the Supreme Court was not an order in rem but it was an order in personam. It is true that when the operation of the Rules was ordered to be stayed during the pendency of the appeals in the Supreme Court the Company and several others took advantage of the same even though they were not parties before the supreme Court because the authorities had been restrained from giving effect to the Rules and not because the order was passed in rem. When the authorities did not implement the Rules, the benefit accrued to all and sundry but the conditions which were imposed by the Supreme court while granting the interim order were operative only between the parties and not on others. Only Khoday Distilleries Limited and others who were parties before the Supreme Court were bound by those conditions and may be they were required to pay margin money/commission to MSIL in terms of the directions contained in para 21 of the judgment in Khoday Distilleries case. Only Khoday Distilleries Limited and others who were parties before the Supreme Court were bound by those conditions and may be they were required to pay margin money/commission to MSIL in terms of the directions contained in para 21 of the judgment in Khoday Distilleries case. The Company which was not a party before the Supreme Court was neither required to maintain its accounts nor was it required to supply a copy of the same to MSIL and nor was it required to pay any amount thereunder to MSIL. We are, therefore, satisfied that MSIL could not make a claim for the payment of any money from the Company on the basis of the interim order or the final order passed by the Supreme Court in the aforesaid cases. ( 16 ) WE are also of the view that the amount sought to be recovered by msil from the Company appears to be barred by time and the stand of the Company in this regard is not without any basis. The Rules were amended in the year 1989 and MSIL had been specified as the sole distributor of liquor in the State of Kamataka in November 1989. The validity of the Rules had been challenged and the final verdict of the apex Court was pronounced on 15-12-1995 upholding the Rules. MSIL is claiming the amount from the Company for the period from 1989 to 1996 for the non-payment'of which it filed the Company petition for winding up. The Company petition was filed in the year 1999. If a suit for the recovery of the amount were to be filed in the year 1999, the same would have been barred by limitation because such a suit could be filed only within three years from the date when the amount became due. The company is therefore right in contending that the claim as made by msil is barred by time. It is well-settled that in a winding up petition, it is a good defence for a Company that the amount claimed from it for the non-payment of which it is sought to be wound up is barred by limitation. The Company petition deserves to be dismissed on this ground as well and the learned Company Judge was right in doing so. The Company petition deserves to be dismissed on this ground as well and the learned Company Judge was right in doing so. ( 17 ) A winding up petition is not a legitimate means of seeking to enforce payment of an amount which is bona fide disputed by the company. A petition which is presented ostensibly for a winding up order but is really meant to exert pressure on the Company to pay a debt which is disputed, has to be dismissed. In Amalgamated commercial Traders (Private) Limited v A. C. K. Krishnaswami, the supreme Court quoted with approval the following passage from1. (1965)35 Comp. Cas. 456 (SC) buckley on the Companies Act (13th Edition, page 451), which sums up the law aptly: "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 stigmatized as a scandalous abuse of the process of the Court. At one time petitions 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 petitions. 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 (l) (a) of the Companies Act. If there is no neglect, the deeming provisions does not come into pay and the ground of winding up, namely, that the Company is unable to pay its debts is not substantiated". Again, in M/s. Madhusudan Gordhandas and Company v Madhu woollen Industries Private Limited, their Lordships summed up the law relating to winding up of companies when they are unable to pay their debts within the meaning of Section 433 (e) of the Act in the following words.- "20. 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. 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 In Re: London and Paris Banking Corporation, (1874)19 Eq. 444 : 23 WR 643 ). 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 In Re: Brighton Club and Norfolk Hotel Company Limited, (1865)35 Beav. 204: 55 ER 873 ). 21. 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 Re: A company, 94 SJ 369 ). 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 In Re: Tweeds Garages Limited, (1962) Ch. 406 : 1962-2 WLR 38 ). 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". In view of our aforesaid discussion we hold that in the case before us the company is bona fide disputing the amount claimed by MSIL and that the denial of its liability is not a pretext to hide its inability to pay. The company is in fact a solvent one having reserves and is cash rich. The defence taken by it is one of substance and in good faith which is likely to succeed in point of law. We are, therefore, of the view that the winding up petition filed by MSIL was misconceived and the same has been rightly dismissed. The company is in fact a solvent one having reserves and is cash rich. The defence taken by it is one of substance and in good faith which is likely to succeed in point of law. We are, therefore, of the view that the winding up petition filed by MSIL was misconceived and the same has been rightly dismissed. ( 18 ) LASTLY, it was urged by the learned Senior Counsel appearing for msil that it was just and equitable to wind up the Company under clause (f) of Section 433 of the Act. Elaborating the argument it was contended that the Company owns huge sum of money to MSIL which is a Public Sector undertaking and in view of the fact that the Company is not making payment of public dues it should be wound up. We cannot accept this contention for at least two reasons. Firstly, no such plea has been raised in the Company petition and therefore MSIL cannot be allowed to urge this ground. Secondly, even if it were to be assumed that the Company is withholding public money that by itself is no ground to wind it up under the just and equitable clause. We have already held that the amount is being bona fide disputed by the Company on valid grounds. Be that as it may, it is fairly established in law that the relief under Section 433 (f) based as it is on the just and equitable clause is in the nature of a remedy of last resort. The power under this clause has to be exercised only when a very strong case is made out. The words 'just and equitable' are not to be read ejusdem generis with the preceding clauses and they enable the Court to exercise its jurisdiction on equitable considerations having regard to the facts and circumstances of each case. The decisive question must be whether on the date of presentation of the winding up petition there was any reasonable hope that the object of running a Company at a profit for which it was formed could be attained. In the present case no facts have been pleaded which could justify the winding up of the Company under this clause. It is not just and equitable to wind up the Company which is making profits for the last several decades. We have therefore no hesitation in rejecting this contention. In the present case no facts have been pleaded which could justify the winding up of the Company under this clause. It is not just and equitable to wind up the Company which is making profits for the last several decades. We have therefore no hesitation in rejecting this contention. ( 19 ) NO other point was raised. In the result, the Company appeals fail and they stand dismissed with costs. --- *** --- .