Judgment ASHIM KUMAR BANERJEE, ACJ. This appeal would relate to an order refusing to admit a winding up petition filed on behalf of the appellant as against the respondents. The parties had commercial relationship under which the appellant acted as a carrier of the respondent’s products over a long period of time. The parties would say, it would be for 6-7 years. According to the appellant, they were carrying goods on behalf of the respondents hence, they were entitled to have the freight charges that the respondent company kept outstanding for a long time. The company would say, the transaction was carried on for years together. As per the agreement, the rate was to be fixed by Mr. D.P. Jajodia. The carrier did not adhere to the terms and billed at a rate far above the settled rate. Hence, the dispute. The appellant made a claim by issuing notice of demand initially by themselves through letters dated June 28, 2013, July 17, 2013, July 29, 2013 and August 26, 2013. None of the said letters were replied to. However, we find from the letter dated July 29, 2013 there had been meetings between the respective representatives of two companies on July 9, 2013 and July 11, 2013. Despite assurance being given the dues were not forthcoming. From the said letter, we also understand, initially the appellant stopped carrying their goods on credit basis and was charging the ultimate consignee on “freight to pay” basis. Subsequently, it was also discontinued, presumably for huge outstanding. The appellant then issued a statutory notice of demand through their Advocate-On-Record vide letter dated September 2, 2013, inter alia, claiming a sum of Rs. 6.43 crores on August 24, 2013. The statutory notice of demand was also not replied to. The appellant filed winding up petition that the company opposed by filing affidavit in opposition. The company also filed supplementary affidavit as the appellant disclosed various documents in their affidavit in reply. On a combined reading of the pleadings, we find, the appellant would base their claim on the Statement of Accounts for the period of April 1, 2013 to August 31, 2013 appearing at pages 19-23, 2013, that would have an opening debit balance of Rs. 6,53,70,890 and closing balance of Rs. 6,37,60,841. From the statement, we find, there had been diverse payments made in between lump sum basis as well as also billed basis. 6,53,70,890 and closing balance of Rs. 6,37,60,841. From the statement, we find, there had been diverse payments made in between lump sum basis as well as also billed basis. However, the balance as on April 1, 2013 would almost remain the same at the end of the financial year. On the issue of fixation of rate, the appellant themselves annexed the circular dated November 23, 2009 wherein Mr. D.P. Jajodia was supposed to fix the rate. According to the appellant, the circular, although issued, was not strictly followed. The signatory to the said circular, Vedang Jajodia, also used to fix the rate as would be appearing from pages 303, 324, 361 and 368. The respondent company would say, those four e-mails referred to above, would have due approval of D.P. Jajodia and the bills pertaining to those four e-mails had already been paid. The company would dispute the outstanding, as according to them, although the appellant billed the respondent at an exorbitant rate the respondent company had verified those bills and had duly paid whatever had been found due and payable. When the winding up petition was initially heard by the learned Single Judge, His Lordship passed an order on February 10, 2014 when His Lordship observed, the dispute would be on limited issue of fixation of rate as the factum of carriage of goods by the appellant was an admitted fact. His Lordship observed, the parties should be reconcile the accounts and submit their respective statements in Court. On a querry made by this Court, we came to know, neither of the parties preferred any appeal from the said order and acted upon the same. However, once the issue could not be finally resolved, they were permitted to take back their respective accounts. We asked Mr. Abhrajit Mitra, learned Counsel appearing for the respondent what according to them, was due and payable. Mr. Mitra replied, Rs. 1.84 crores. In deference to the desire of this Court, he also offered to pay off the same in installment. However, the appellant did not agree. We heard the parties at length, Mr. Shaunak Mitra, learned Counsel appearing for the appellant would take us to the pleadings as well as the correspondence that the appellant exchanged with the respondent. Mr. 1.84 crores. In deference to the desire of this Court, he also offered to pay off the same in installment. However, the appellant did not agree. We heard the parties at length, Mr. Shaunak Mitra, learned Counsel appearing for the appellant would take us to the pleadings as well as the correspondence that the appellant exchanged with the respondent. Mr. Mitra would contend, once the appellant demanded the sum followed by reminders and ultimately the statutory notice of demand the respondent company was bound to react to the same, if they had any reason to react. None of the letters were replied to that would have a statutory presumption as against the respondent in terms of Section 434 of the Companies Act 1956. According to Mr. Mitra, the respondent miserably failed to rebut such presumption. On merits, Mr. Mitra would contend, he was the sole carrier hence, question of any competitive rate would not arise at all. Had there been any genuine dispute, there should have been contemporaneous reaction on the part of the respondent. Dealing with the contention of the respondent, D.P. Jadodia did not approve the rate, Mr. Mitra would rely upon e-mails referred to above, to show, other officers were also responsible to fix the rate. According to him, the company miserably failed to cite a singular instance where the appellant had deviated from the rates fixed by the respondent. According to him, the defence was nothing but moonshine and colourable and should have been rejected. Also appearing for the appellant, Mr. S.N. Mookherjee, learned Senior Counsel would rely upon two decisions of the Apex Court and the one of this Court: 1. M/S Madhusudan Gordhandas and Co. vs. Madhu Woollen Industries Private limited reported in 1971 volume-III Supreme Court cases page- 632. 2. Harinagar Sugar Mills Co. Limited vs. M.W. Pradhan (now G.V. Dalvi) Court Receiver, High Court reported in All India Reporter 1996 Supreme Court page1707. 3. Bangasri Ice and cold Storage Limited vs. Kali Charan Banerjee reported in All India Reporter 1962 Calcutta page- 613, to explain, what should be the correct approach of a company Judge while dealing with a winding up petition at the instance of an unsecured creditor. Mr. Mookherjee would submit, although winding up proceeding could not be used as a debt collecting mechanism, it was an equitable mode of execution, so recognized by the precedents referred to above. Mr. Mookherjee would submit, although winding up proceeding could not be used as a debt collecting mechanism, it was an equitable mode of execution, so recognized by the precedents referred to above. Per contra, Mr. Abhrajit Mitra, learned Senior Counsel appearing for the respondent would submit, the defence that the company took in the pleadings, was sufficient enough to raise a bona fide dispute. Merely because the respondent failed to reply to the statutory notice of demand, would not make the situation worse for him. The learned Judge rightly approached the situation and thus, declined to admit the winding up proceeding that would not deserve any interference by this Court. Mr. Mitra would further say, the four e-mails that Mr. Mookherjee relied, would relate to past transactions for which bills had already been paid. He would also refer to the Statement of Account to show, there had been payments corresponding to the current supplies. The dispute would thus relate to past transactions that would require thorough reconciliation for the entire period. The winding up Court would not be the proper forum for the same. While giving reply, Mr. Shaunak Mitra would reiterate what he had submitted earlier. He would contend, the respondent company miserably failed to raise any dispute whatsoever on merits that would itself lead to admission of the winding up proceeding. Before we deal with the subject controversy, may we discuss the law on the subject. In a winding up proceeding, the learned company Judge has wide discretion to exercise. Even if the learned Judge was satisfied on the claim of the creditor, it could be refused considering various other aspects. In a civil suit, where creditor seeks a debtor and the debtor has successfully proved his claim decree would be a natural course. In a petition for winding up, it would depend upon various other factors irrespective of proof of claim. At the pre admission stage, the company Court would examine the claim and if it was a just debt that would have no defence from the company, the admission would be inevitable. Section 434 of the Companies Act 1956 would give handle to an unsecured creditor to sue the debtor company for winding up on the strength of the presumption of the insolvency. Section 434 of the Companies Act 1956 would give handle to an unsecured creditor to sue the debtor company for winding up on the strength of the presumption of the insolvency. The provision would provide, when the creditor would raise a demand on the company, the company would have two courses left open, either to secure the claim to the satisfaction of the creditor or dispute the claim with plausible cause. Mr. Mookherjee would rely upon three age old celebrated decisions on the issue, i.e Madhusudan Gordhandas (supra), Bangasri Ice and Cold Storage (Supra), Harinagar Suger Mills co. Limited (Supra) that would deal with the provisions for winding up. On a combined reading of these three decisions, we would find, although the winding up process is not a normal alternative for debt collection, it is also used as a forum of “equitable execution.” The Division Bench of our Court in a recent decision in the case of Kotak Mahindra Bank Limited Vs. Eastern Spinning Mills and Industries Limited reported in Company Cases 2013 Volume-177 page-15, dealt with all the relevant cases on the issue as to what would mean as presumption of insolvency and bona fide dispute. It would be apt if we set out few paragraphs from the said decision: “His Lordship mainly considered the issue of deemed insolvency as per the notice, the learned Judge, observed, in our view erroneously: since the present assessment is as to whether this petition made by a secured creditor, relying exclusively on section 434(1)(a) of the Act for the court to presume the inability of the company to pay its debts, should be admitted for being advertised in the absence of the petitioning-creditor having asserted or established the inefficacy or the inadequacy of the securities that it enjoys. His Lordships was of the view, that in view of the provisions of section 434(1)(a) the creditor could maintain the petition upon service of notice of demand and the company’s inability to pay or secure or compound to the reasonable satisfaction of the creditor. His Lordship was of the view, to claim deemed insolvency the creditor would have to show, securities were insufficient. Even if we accept the said view, the petition could not be held to be not maintainable due to mere absence of such fiction. In our view, His Lordship erred in holding, the petitioner maintain the petition exclusively under this provision. His Lordship was of the view, to claim deemed insolvency the creditor would have to show, securities were insufficient. Even if we accept the said view, the petition could not be held to be not maintainable due to mere absence of such fiction. In our view, His Lordship erred in holding, the petitioner maintain the petition exclusively under this provision. There were enough material to hold, the company was commercially insolvent. We asked Mr. Mookherjee in vain, how he would propose to clear off the dues. He was unable to give any suitable reply. The entire fixed assets were mortgaged. The company did not have sufficient funds to pay off the dues. The balance-sheet would clearly demonstrate such insolvency. Even if we hold, their fixed assets were sufficient enough to pay of the dues, that would only be possible upon sale of those assets and the company would hardly have anything left to carry out the day to day business. The learned Judge possibly overlooked his aspect. A creditor who has unpaid dues could only be reasonably satisfied if company has the means to pay. When the creditor serves the notice upon the company asking them to pay off the dues the company has option either to pay off or dispute the same. Even if the company has means to pay and does not pay without any reasonable cause it would be liable to be wound up. However, this question may not be relevant here as the record shows, the company was involved in circumstances due to its precarious financial condition. In our view, his Lordship should have admitted the winding up petition and directed advertisement of notice making the said proceeding a representative action. Emphasis was placed on the advertisement of notice of demand. The petitioning-creditor claimed, they did not receive back the acknowledgment due card. It would have been proper, if the appellant would enquire from the postal authorities about the fate of such undelivered packet, or the acknowledgment due card. They took no step in this regard. However, this ground alone would not be sufficient to deny admission of the petition. This irregularity could not be presumed as mala fide as erroneously held by his Lordship. If we go by his Lordship’s views per se on Section 434(a) we might agree with the ultimate result. They took no step in this regard. However, this ground alone would not be sufficient to deny admission of the petition. This irregularity could not be presumed as mala fide as erroneously held by his Lordship. If we go by his Lordship’s views per se on Section 434(a) we might agree with the ultimate result. However, the right of a creditor, secured or unsecured, to maintain the winding up petition would lie both under Section 434(1)(a) as well as Section 433(e) and (f). Mr. Mookherjee contended, it was not argued. The learned Judge however mentioned about the other aspect particularly the issue of commercial insolvency and such recording unless confronted before his Lordship, must be taken as sacrosanct. We thus conclude, the petition by a creditor would be maintainable on both counts. Once the creditor established his right to claim the amount more than Rs.500 the onus would shift on the company to rebut such claim by raising bona fide dispute. Once the bona fide dispute is raised it would weaken the chance to have admission of the winding up petition, otherwise admission is an obvious consequence. Even if we accept the view of his Lordship on the interpretation of Section 434(1)(a) we would not be in a position to agree with the ultimate finding as we find enough material to hold, the petition was maintainable in terms of Section 433(e) and (f) read with Section 439(1)(b) and (2).” We thus conclude, an unsecured creditor would maintain a winding up proceeding with a just claim upon service of statutory notice of demand that either remains unreplied or is dealt with without any plausible defence. For the company, once it faces a winding up proceeding followed by a statutory notice of demand it has to rebut the presumption of insolvency that would arise on service of the statutory notice. The presumption could only be rebutted on raising a bona fide dispute. Merely raising a dispute having no support from reality, would be moonshine, sham, colourable and would not be regarded as a good defence to resist a winding up proceeding. The presumption could only be rebutted on raising a bona fide dispute. Merely raising a dispute having no support from reality, would be moonshine, sham, colourable and would not be regarded as a good defence to resist a winding up proceeding. In this regard, we would be failing in our duty if we do not mention and rely upon a decision in the case of M/s Mechalec Engineers and Manufacturers vs. M/s Basic Equipment Corporation reported in All India Reporter 1977 Supreme Court Page 577 which quoted the celebrated decision of this Court in the case of Kiranmoyee Dassi vs. Dr. J. Charterjee reported in Calcutta Weekly Notes 1945 volume-49 Page-246, five criteria stipulated therein, to deal with summary proceeding that would also be available for consideration by a Company Judgr dealing with a winding up proceeding, would be apt in the present case and are quoted below: “a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign and the defendant is entitled to unconditional leave to defend. c) if the defendant discloses such facts as may be deemed sufficient to entitle him to defend that is to say although the affidavit does not positively and immediately make it clear that he had a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintif’s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security. d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition and thereby show mercy to the defendant by enabling him to try to prove a defence.” If we consider the 3rd and/or the 5th eventuality quoted above, we would find great similarity with the present case in hand. With this mind set, may we proceed to decide the present lis. The appellant would contend, they had a commercial relationship for years together. The appellant would carry goods for the respondent on credit. The appellant did not disclose the earlier transactions. They started from April 1, 2013 that would have a debit balance of 6.53 crores where as the closing balance as on August 31, 2013 would be 6.37 crores that would mean, there was a constant flow of fund as there were contemporaneous bills also raised that would find place in the statement. Hence, it is not a case where there would be outstanding pending for a long time. From the statement disclosed by the appellant, we find debit and credit entries on regular basis. Hence, it could not be said, there had been dues kept pending long. This is our prima facie view on examination of the Statement of Account that was disclosed in the pleading. However, unless we examine the entire transaction, it would not be proper for the Court to come to a conclusion on the issue. Hence, winding up may not be the right approach. On the other way, we find, as many as four letters would remain unreplied. It is not a fact, the company was silent. The letters would show, there had been at least two meetings on the issue yet, the company did not confront the creditor by replying to their letters. Those four letters were followed by the statutory notice of demand that would also remain unreplied. Mr. It is not a fact, the company was silent. The letters would show, there had been at least two meetings on the issue yet, the company did not confront the creditor by replying to their letters. Those four letters were followed by the statutory notice of demand that would also remain unreplied. Mr. Abhrajit Mitra, Learned Senior Counsel could not give any plausible explanation why the letters were not dealt with. This would definitely lead to statutory presumption of insolvency. To rebut such statutory presumption, the company would have to raise a bone fide dispute that they failed to raise prior to the initiation of the winding up proceeding by replying to the letters as referred to above. They came out with their defence for the first time in the affidavit in opposition. The defence is not clear to us. It is somewhat confusing. Whatever we could understand, the bills would remain outstanding as those were not as per the settled rate fixed for such purpose. Whether D.P. Jajodia settled it or Vedang, as the case may be, the company would not say, what would be the actual sum as per the settled rate as recorded earlier. Mr. Mitra would quote a figure of Rs. 1,84 crores that would be nowhere near the claim of the appellant. Why there would be so much of difference, was not explained to us. It was the duty of the company to remove all doubts from the mind of the Court, specially when they already suffered a statutory presumption by not replying to any of the correspondence. At the same time, we could not find a definite stand from the appellant to support their claim being just and proper and strictly as per the approved rate. We can not overlook the circular that the appellant annexed in their winding up proceeding mentioning about D.P. Jajodia settling the rate. Four e-mails referred to by Mr. Mookherjee were for the period of February 2013, March 2013 and May 2013. The first two e-mails would relate to a period that the appellant did not make an issue in the winding up proceeding as we find from the Statement of Account. The next two e-mails could not be used as a support to the entire claim. Moreover, we do not find any co-relation at least, not shown to us to dispel the doubt in our mind. The next two e-mails could not be used as a support to the entire claim. Moreover, we do not find any co-relation at least, not shown to us to dispel the doubt in our mind. Hence, considering the state of fact that we discuss herein before, we can not convincingly come to a conclusion as to the exact amount of debt. At the same time, we cannot leave the respondent scot-free as their defence is doubtful. This would squarely come within the third and/or fifth eventuality quoted above. The appeal thus succeeds and is allowed. The judgment and order of the learned Single Judge is set aside. The company admitted Rs. 1,84 crores. We permit the company to pay the same in the following manner: i)Rs. 50 lacs by August 1, 2014 ii)Rs. 50 lacs by September 1, 2014 iii) BalanceRs.1crorebytenequalmonthly installments. iv) Interest at the rate of 9 per cent per annum on the said sum of Rs.1.84 crores on reducing balance be paid as and by way of thirteenth installment payable on and from October 1, 2014 and thereafter on the first day of each succeeding month. In case of default of making payment of any of the aforesaid sum, the winding up petition would stand admitted for the said sum of Rs. 1.84 crores together with interest @ 9 per cent per annum, in such case, the entire sum of Rs.1.84 crores or any part thereof together with interest thereof as aforesaid, would become due and payable and the winding up petition would stand admitted and be proceeded with accordingly. For the balance claim the parties are relegated the suit subject to the respondent disposing the balance sum with the Registrar Original Side, by September 15, 2014. In case the above sum is deposited, the Registrar would invest the said sum in any nationalized Bank of his choice and keep the same renewed till the disposal of the suit. In default of deposit, the balance sum would immediately become due and payable and the appellant would proceed with the winding up proceeding. In default of filing any suit by the appellant within six weeks from the date of communication of such deposit, the respondent would be entitled to refund of the same. The appeal is disposed of accordingly without any order as to costs.