JUDGMENT : I.M. Quddusi, J. - This company petition has been filed for winding up of the opposite party-company, namely, M/s. Neelachal Ispat Nigam Ltd., under Sections 433, 434 and 439 of the Companies Act, 1956. 2. The opposite party-company M/s. Neelachal Ispat Nigam Ltd., which was incorporated in March, 1982 entered into a contract with the petitioner-company, namely, M/s. Lloyds Metals and Engineers Ltd., having its registered office at Plot Nos. A9 and 10, M.I.D.C. Phase II, Dombivili (East) district, Thane in the State of Maharashtra for supply of pipes worth Rs. 60 lakhs approximately required for the integrated steel plant of the opposite parry-company at Kalinga Nagar, Industrial Complex, Duburi in the district of Jaipur, Orissa. According to the petitioner-company, materials (pipes) worth Rs. 59,25,001 were supplied to the opposite party-company against which the said company paid a total sum of Rs. 54,48,493 leaving a balance of Rs. 4,76,508. As per Clause 8.1 of the letter of the award, 10 per cent, of the contract price was to be paid within 30 days of the expiry of the warranty period. Further, as per Clause 10 of the said award, the warranty period was determined as 12 months from the date of commissioning or 18 months from the date of delivery, whichever was earlier. A sum of Rs. 4,76,508 which was payable on July 20, 2001, was withheld but the opposite party-company did not pay the same in spite of expiry of the warranty period. The agreement contained an arbitration clause which reads as under: 22.0 Arbitration: 22.1 Should any dispute or difference arise in the performance of the work by the contractor or in relation to or in connection with the order, or breach thereof, the purchaser shall discuss the same with them and settle the issue amicably. If the difference and the dispute cannot be resolved, the same shall be referred to arbitration and settled in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the decision so arrived shall be final and binding on both the parties. If the difference and the dispute cannot be resolved, the same shall be referred to arbitration and settled in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the decision so arrived shall be final and binding on both the parties. Work under the contract shall be continued by the contractor during the arbitration proceedings unless otherwise directed in writing by the purchaser or unless the matter is such that the works cannot possibly be continued until the decision of the arbitrators or of the umpire, as the case may be, is obtained and save as those which are otherwise expressly provided in the contract, no payment due or payable by the purchaser shall be withheld on arbitration proceeding unless it is the subject-matter or one of the subject-matter thereof. 3. According to the opposite party, admittedly the delivery was to be completed by July 19, 1999, but due to non-completion of the deliveries within the schedule time, the delivery period was extended till November 30, 1999, with the right to levy liquidated damages. The deliveries were completed by December 28, 1999. Therefore, while considering the request of the petitioner for making the final payment claimed vide invoice dated December 17, 2004, during the pendency of this company petition, the opposite party released final payment of Rs. 2,01,328 after deducting the liquidated damages against the delayed deliveries in terms of the clauses of the purchase order. 4. In the counter affidavit filed by the opposite party, it is stated that from the conduct of the petitioner it appears that efforts are being made for claiming the amount deducted by the opposite party by way of liquidated damages which is not possible under the present company petition. Till date neither a notice disputing the final payment dated January 18, 2005, nor a notice of arbitration claiming the disputed deduction of liquidated damages amount has been received by the opposite party. Therefore, by no stretch of imagination, the present application is legally maintainable or factually there remains any outstanding dues after release of the final payment of Rs. 2,01,328 on January 18, 2005, in favour of the petitioner. 5. It may be stated here that in the case of Madhusudan Gordhandas and Co. Vs. Madhu Wollen Industries Pvt. Ltd. it has been held by the hon'ble apex court that two rules are well-settled. 2,01,328 on January 18, 2005, in favour of the petitioner. 5. It may be stated here that in the case of Madhusudan Gordhandas and Co. Vs. Madhu Wollen Industries Pvt. Ltd. it has been held by the hon'ble apex court that 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] L. R. 19 444). 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). Secondly, 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 (A Company, In re [1894] 94 S J. 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 Tweeds Garages Ltd., In re [1962] 32 Comp Cas 795 (Ch. D); [1962] Ch. 406). 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. This Court had occasion to consider identical question in the Bengal Builders and Traders P. Ltd. v. Orissa Textile Mills [1977] 44 CLT 619, in which the company disputed the claim of the creditor and contended that since the agreement contained an arbitration clause as in the case in hand, the matter may be referred to arbitration. This Court had occasion to consider identical question in the Bengal Builders and Traders P. Ltd. v. Orissa Textile Mills [1977] 44 CLT 619, in which the company disputed the claim of the creditor and contended that since the agreement contained an arbitration clause as in the case in hand, the matter may be referred to arbitration. Though the court asked the parties that the matter may be referred to arbitration, the creditor was not inclined that the dispute should be referred to arbitration. This Court after hearing observed as under: It is long settled in law that a winding up petition is not an appropriate mode of enforcing payment of a debt which is bona fide disputed and is an abuse of the process of court (see Gold Hill Mines, In re [1883] 23 Ch. D 210 (CA)). To the same effect is the decision of the Calcutta High Court in the case of Bukhtiarpur Bihar Light Railway Co. Ltd. Vs. Union of India (UOI) and Another. In the case of Amalgamated Commercial Traders P. Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp Cas 456, the Supreme Court pointed out that it is well-settled that a winding up petition is not a legitimate mode of seeking to enforce payment of a debt which is bona fide disputed by the company. The 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. If the debt was bona fide disputed, there cannot be neglect to pay within the meaning of Section 434(1)(a) of the Act. If there was no neglect, the deeming provision does not come into play and the ground of winding up, namely, that the company was unable to pay its debt was not substantiated. 6. If the debt was bona fide disputed, there cannot be neglect to pay within the meaning of Section 434(1)(a) of the Act. If there was no neglect, the deeming provision does not come into play and the ground of winding up, namely, that the company was unable to pay its debt was not substantiated. 6. So observing, this Court did not entertain the company petition holding that there was bona fide dispute regarding the playability of the sum of money said to be due to the creditor and until the debt is established, it cannot be said that the company has neglected to pay the debt. 7. From the averments made by the parties in this case, it appears that there is a bona fide dispute with regard to the payment of the amount involved in the matter and under the agreement there is a clause for settlement of the dispute through arbitration. 8. In view of the above mentioned facts and circumstances, I am of the opinion that this is not a fit case for admission. 9. Therefore, the company petition is dismissed. However, this will not debar the petitioner to avail of any available remedy for the adjudication of the matter in accordance with law. Final Result : Dismissed