JUDGMENT : I.P. MUKERJI, J. 1. The petitioning creditor in a winding up application, appeals to this court against the judgment and order dated 15th September, 2015 passed by a learned single judge of this court permanently staying the winding up proceedings. 2. The question before this court is whether the appellant petitioning creditor ("the appellant") was able to make out a case for admission of the winding up application. They had to prove that there was a debt payable by the respondent company (the respondent) to them and that they were unable to discharge it. 3. The facts are these. 4. The parties, on 13th May, 2013 entered into a development agreement. The respondent was the owner of a parcel of land numbered as premises No.35, 36 and 36/1, Circular Garden Reach Road, P.S-Watgunge, Kolkata-700023 having an area of 19 cottahs, 9 chittaks and 43 sq. ft. In the agreement the appellant was described as the developer. By this agreement the respondent permitted the appellant to build upon this land, exploit it commercially and after raising a building on it, to let out or transfer a part of it allotted to them. It is difficult to understand the exact nature and scope of this agreement. There was no transfer of any portion of the property to the appellant. Yet, they had the right to transfer the land. It was registered. The agreement provided that the respondent would have to deposit Rs.3 crores with them. A sum of Rs.2 crores was paid in terms of it. 5. On 27th November, 2014 the parties executed a document called "the deed of cancellation." This agreement recorded that the parties had jointly agreed to cancel the said agreement and that by it they were only reducing the terms to writing. The parties would execute and register a formal deed of cancellation on fulfillment of the conditions, mentioned there. By it, the development agreement would be put to an end by 31st March, 2015. The sum of Rs.2 crores received by the respondent would be returned by them by that date. On receiving this amount the appellant would deliver up the original development agreement dated 13th May, 2013 along with the power of attorney in his favour executed by the respondent, to the latter. Thereupon, a formal deed of cancellation would be drawn up. The sum of Rs.2 crores received by the respondent would be returned by them by that date. On receiving this amount the appellant would deliver up the original development agreement dated 13th May, 2013 along with the power of attorney in his favour executed by the respondent, to the latter. Thereupon, a formal deed of cancellation would be drawn up. Clause 4 of this agreement is not very clear but it appears that the respondent had to return the money by 25th March, 2015. The other obligations like execution and registration of the deed of cancellation and the power of attorney would be made by 31st March, 2015. 6. Two cheques both dated 25th March, 2015 for Rs.1 crore each were handed over by the respondent to the appellant on 25th March, 2015. But they were not encashed by them before 31st March, 2015. Neither was any formal cancellation agreement executed. Nor was the power of attorney or the original development agreement cancelled. This is the background against which the alleged disputes between the parties have arisen. 7. Nothing significant happened till 19th June, 2015, at least on record. On that day, the respondent wrote to Mr. Shiv Ratan Kakrania advocate stating that in November, 2014 the appellant allegedly complained about a defect in the title of the property and for cancellation of the development agreement. The earnest of Rs.2 crores received by them was sought to be returned by post dated cheques to be held in escrow by the said advocate giving an opportunity to the respondent to make out a good marketable title. They had made out such title and that these cheques should be returned. 8. The advocate replied through his firm S. Kakrania & Co. on 20th June, 2015 that the firm was acting for both the parties and that the letter should have been addressed to the appellant. On 22nd June, 2015 by a letter, the respondent withdrew the 19th June, 2015 letter. They wrote another letter on 22nd June, 2015 to the appellant stating that although they executed the agreement to cancel the development agreement on 27th November, 2014, allegedly an oral agreement was made between the parties not to give effect to it. That is why the appellant did not present the cheque by 31st March, 2015. 9. These cheques had a validity period of three months. That is why the appellant did not present the cheque by 31st March, 2015. 9. These cheques had a validity period of three months. They were valid till or about 25th June, 2015. 10. Just before the end of the validity period these two cheques were presented to their bank by the appellant. Their banker, ICICI Bank, New Alipore branch, wrote to them on 23rd June, 2015 stating that both the cheques "presented in clearing by you is returned unrealised on 23rd June, 2015 with the reason-account closed." 11. We are not told whether there was any balance to honour these cheques in the account of the respondent at the time of the closure of their account. 12. On 30th June, 2015 the appellant caused to be issued a winding up notice under Section 434 of the old Companies Act, 1956. This notice was very simply worded, narrating the essential facts mentioned above and calling upon the respondent to pay the principal sum of rupees two crores and interest on it @18 per annum from 1st April, 2015 till 30th June, 2015 amounting to Rs.8,97,534/-, aggregating to Rs.2,08,97,534. In their reply the company reiterated their case as sought to be made out from or about 19th June, 2015 onwards, as stated above. 13. Mr. Bose assisting Mr. Chowdhury appearing for the appellant narrated the above facts very simplistically. He submitted that his client had the right to present the cheques for encashment at any time within their validity period. They had done so legitimately. He said that there was no oral or written arrangement by which the terms of the agreement to cancel had been changed. The parties according to him had put an end to the development agreement earlier, orally and had recorded it by execution of the cancellation agreement. It also contained some consequential formalities that had to be carried out to discharge the parties fully from the development agreement. The cheques had to be tendered by 31st March, 2015. Thereafter, the development agreement and the power of attorney would be delivered up and cancelled, learned counsel argued. A formal agreement would then be executed and registered. In other words, according to Mr. Bose there could be no revival of the relationship between the parties which had come to an end. 14. Thereafter, the development agreement and the power of attorney would be delivered up and cancelled, learned counsel argued. A formal agreement would then be executed and registered. In other words, according to Mr. Bose there could be no revival of the relationship between the parties which had come to an end. 14. When the validity period of the cheques was coming to an end and the respondent realised that the appellant might now encash the cheques, they closed their bank account on which these cheques were drawn, he argued. According to him the cheques represented a debt which was payable by the respondent to the appellant. They were unable to pay it and hence liable to be wound up. 15. Mr. Banerjee, learned Senior Advocate appearing for the respondent said that there was a substantial dispute between the parties. The winding up application ought not to be entertained and the parties should be related to a civil remedy. 16. First, he took a technical point. The development agreement was compulsorily registrable and therefore registered. It could not be varied by the unregistered agreement for cancellation. A right to property had been created by the development agreement which was sought to be extinguished by the cancellation agreement. It needed registration. He also submitted that by mutual agreement the appellant had agreed not to encash the two cheques upto June, 2015. The appellant had raised some dispute which was being investigated by them with regard to the respondent's title to the property. Furthermore, some talks of settlement were also ongoing. That is why the cheques were kept in escrow with Mr. Kakrania. Subsequently, the respondent was able to make out a good title and that is why the cheques were not encashed. The parties by conduct had kept the cancellation agreement in abeyance. 17. His client wanted specific performance of the agreement which the appellant was unwilling to do. 18. There was an arbitration clause in the agreement. The development agreement did not come to an end and was subsisting. The above disputes arising therefrom ought to be resolved in arbitration or in a civil forum. The winding up court should not exercise jurisdiction, it was submitted. 19. First of all, let me deal with the argument that the document described as a deed of cancellation was compulsorily registrable as it sought to rescind or vary the registered development agreement. 20. The winding up court should not exercise jurisdiction, it was submitted. 19. First of all, let me deal with the argument that the document described as a deed of cancellation was compulsorily registrable as it sought to rescind or vary the registered development agreement. 20. Did the development agreement create any right, title and interest in the immovable property? If it did and since it was registered, rescission or variation of that right, title and interest by the Deed of Cancellation would be required to be made by a registered document under Section 17 of the Registration Act, 1908 read with Section 92 of the Indian Evidence Act, 1872. 21. In S. Saktivel (Dead) By Lrs. Vs. M. Venugopal Pillai and Ors., (2000) 7 SCC 104 the Supreme Court reiterated the well-known principle embodied in Section 92 of the Evidence Act. The terms of a registered document can only be altered or rescinded by a registered document. The same principle was reiterated in Chandrakant Shankarrao Machale Vs. Parubai Bhairu Mohite (Dead) through Lrs., (2008) 6 SCC 745 . 22. Let us, for the sake of argument assume that the development agreement did create such a right. 23. What was the nature of the "deed of cancellation"? 24. It was an executory contract. It was an agreement to put an end to the development agreement upon fulfillment of certain terms and conditions. Upon fulfillment of these terms a formal document would be executed. If the Deed of Cancellation by itself changed the terms of the registered development agreement, then, being unregistered it would be hit by Section 92. 25. There is a fine distinction between changing the terms and conditions of a registered document by an unregistered deed and entering into a wholly new agreement which has the effect of putting an end to the obligations created by the registered document. 26. Let me give you an example. 27. Suppose there is an agreement for sale between two individuals. It is duly executed and registered under the Registration Act, 1908. After a period of time the parties execute an agreement extending the time to execute the formal conveyance. This document is not registered. Could it be said that since it sought to extend the time period to execute the conveyance it was compulsorily registrable? The answer is 'No' as it is an independent, separate subsequent agreement. After a period of time the parties execute an agreement extending the time to execute the formal conveyance. This document is not registered. Could it be said that since it sought to extend the time period to execute the conveyance it was compulsorily registrable? The answer is 'No' as it is an independent, separate subsequent agreement. It cannot be said that it rescinded or varied the terms of the sale deed. 28. Take another example. There is a registered agreement for sale of a property between two parties. At a future point of time they enter into another agreement, a new one, discharging the parties from their obligations, by mutual consent. This is not compulsorily registrable, although the agreement for sale was. 29. In fact, the 4th proviso to Section 92 of the Evidence Act conceptualizes this situation. It is in the following terms:- "S. 92....... Proviso (4).- The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents." 30. Sarkar in his "Treatise on Evidence" has given the following example:- "A receipt which says: "I release you from the liability to pay compound interest as written in the said mortgage bond" is admissible though the receipt is not registered and it operates as a full acquittance for the money already paid [ Kailash v. Sheikh, 42 C 546]." 31. He has also opined quoting from an English decision:- "A contract required by law to be in writing may, whether before or after breach, be wholly rescinded by an oral agreement, even though the latter be not itself enforceable [Morris v. Baron, (1918) AC 1]" 32. He has also opined quoting from an English decision:- "A contract required by law to be in writing may, whether before or after breach, be wholly rescinded by an oral agreement, even though the latter be not itself enforceable [Morris v. Baron, (1918) AC 1]" 32. In the treatise Sarkar has quoted a passage from an English decision "Goss v. Nugent, 2 B&AD 58, where Lord Denman pronounced the following dictum: "By the general rules of the common law, if there be a contract which has been reduced into writing verbal evidence is not allowed to be given of what passed between the parties either before the written instrument was made, or during the time that it was in a state of preparation, so as to add to or substract from, or in any manner to vary or qualify the written contract; but after the agreement has been reduced into writing, it is competent to the parties, at any time before breach of it, by a new contract not in writing, either altogether to waive, dissolve, or annul the former agreements, or in any manner to add to, or substract from, or vary or qualify the terms of it, and thus to make a new contract; which is to be proved, partly by the written agreement, and partly by the subsequent verbal terms, engrafted upon what will be thus left of the written agreement." 33. In those circumstances, the argument made by Mr. Banerjee that the deed of cancellation needed registration is not sound at all. 34. It was an executory contract, a new contract which would have the effect of discharging the obligations of the earlier contract by performance of specified obligations. It was certainly not registrable in our opinion. Therefore, all the terms and conditions in this document can be relied upon by the appellant. 35. Now, we shall endeavour to determine whether there is at all any bonafide dispute between the parties. 36. First, let me discuss the authorities. 37. Madhusudan Gordhandas & Co vs. Madhu Woollen Industries (P) Ltd., (1971) AIR SC 2600 = (1971) 3 SCC 632 is a leading case on the subject. 35. Now, we shall endeavour to determine whether there is at all any bonafide dispute between the parties. 36. First, let me discuss the authorities. 37. Madhusudan Gordhandas & Co vs. Madhu Woollen Industries (P) Ltd., (1971) AIR SC 2600 = (1971) 3 SCC 632 is a leading case on the subject. Justice A.N. Ray pronounced the following dictum: The debt must be bonafide disputed; the defence must be substantial and in good faith; the defence is likely to succeed in point of law; the company adduces prima facie proof of the facts constituting the defence. 38. In an earlier case, Amalgamated Commercial Traders (P) Ltd. vs. A.C.K. Krishnaswami and Anr., (1965) 35 CompCas 456 (SC), the same court had approved a passage from Buckley (13th Edition) that winding up proceedings are not to be seen as a means to enforce payment of a debt which was bonafide disputed by the respondent. 39. In Mediquip Systems (P) Ltd. vs. Proxima Medical Systems (GMBH), (2005) 7 SCC 42 , the Supreme Court reiterated the ratio in the above decisions. 40. Mr. Banerjee, showed us IBA Health (India) Private Limited Vs. InfoDrive Systems SDN. BHD., (2010) 10 SCC 553 The Supreme Court opined that a dispute has to be "substantial and genuine", "bona fide" and not "spurious, speculative, illusory or misconceived". It also said the dispute should not an "ingenious mask invented to deprive creditor of a just and honest entitlement." It also opined "An examination of the company's solvency may be a useful aid in determining whether the refusal to pay debt is a result of a bona fide dispute as to the liability or whether it reflects an inability to pay. Of course, if there is no dispute as to the company's liability, it is difficult to hold that the company should be able to pay the debt merely by proving that it is able to pay the debts. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterized as a stand alone ground.............The Company Court is expected to ascertain that the company's refusal is supported by a reasonable cause or a bona fide dispute........." 41. Had the appellant tendered the cheque for encashment within reasonable time, the cancellation agreement would have been almost completely performed. All that would remain to be performed would be the consequential formalities like cancellation of the power of attorney and delivery up and cancellation of the development agreement. If that would have happened we do not think there could have been any real dispute between the parties. That did not happen. The appellant did not retain the cheques. They handed them over to Mr. Kakrania who was the common advocate for the parties. Why did they do so? That is unanswered. 42. It is true that the appellant took back the cheques from this advocate. But they waited for almost three months from the date of their issue to deposit it with their banker for encashment almost at the end of the validity period of the cheques. Why did they do so? That is also unanswered. 43. There is nothing on record to suggest any oral or written negotiation or arrangement between the parties by which the performance of the cancellation agreement was kept in abeyance. Yet the cheques were not tendered for encashment. 44. So far, so good. If the respondent had the requisite balance in the account and instructed their banker not to honour the cheques we would tend to apply the ratio laid down by the Supreme Court that there might be a bona fide and genuine dispute between the parties that ought to be resolved at a civil trial. 45. But that is not the case here. 46. 45. But that is not the case here. 46. That the parties had decided to back out of the agreement because the respondent could not make out a marketable title and that subsequently they were able to make it out and demanded that their cheques refunding the part payment should not be encashed was raised just three or four days before the expiry of the validity period of the cheques. To add to this sensing the move of the appellant to deposit the cheques with their banker for encashment the respondent promptly closed their bank account. This was an ingenious move. We do not know whether at all they had the required balance in their account. 47. I am of the view that this court would only consider the disputes raised by the respondent as bona fide and referable to trial if they can show to the court that they have a balance of Rs 2 crores in any bank account. Otherwise the dispute raised by them is deemed to be speculative, unreal and without any substance. 48. We dispose of this appeal by directing the respondent to file before the learned single judge within three weeks from today an application, duly served upon the appellant stating the bank account where they are maintaining this balance of Rs 2 crores, with documentary evidence. If this evidence is produced the learned single judge will dismiss the company petition and relegate the parties to a civil forum. 49. If an application is made by the respondent without sufficient evidence an order of admission of the company petition shall be made by the learned single judge. 50. If such an application is not made the appellant will file an application before the learned single judge for admission of the winding up application and consequential orders. The learned single judge may if the situation so demands extend the time limit prescribed by this order. 51. Certified photocopy of this judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities. I agree