A company petition for winding up will not be admitted if the defence of the respondent is bona fide and one of substance, the defence is likely to succeed in point of law, and the company adduces prima facie proof of the facts on which the defence depends.

DASARADHA RAMA REDDY, J.

( 1 ) IN this petition, filed on 15/12/1989, under section 433 (e) and (f) read with section 439 (1) (b) of the Companies Act, 1956, for the winding up of the respondent-company, the petitioner alleges that in the course of business the respondent had purchased M. S. ingots and billets and other materials worth Rs. 28,14,658. 50 from it during the period from July, 1984, to December, 1986, and that the respondent is due as on November 30, 1989, in a sum of Rs. 20,74,531. 83 inclusive of interest at 24 per cent. per annum. The respondent failed to pay the amount in spite of repeated reminders. The petitioner issued statutory notice under section 434 (1) (a) and (c) of the Companies Act on 11/11/1989, and the company in its reply denied the liability. The respondent filed a counter denying its liability to pay any amount and averring that the petitioner has waived its claim, that in any event, the claim is barred by limitation, that in order to overcome the bar of limitation the petitioner has filed this petition and that the financial condition of the respondent-company is sound. It is also stated in the additional counter that there were differences between the families of the managing director of the petitioner-company and of the director of the respondent-company, who are related to each other, that the director of the respondent was kidnapped by the managing director of the petitioner-company on September 29, 1988, and that C. C. No. 214 of 1989 on the file of the IXth Metropolitan Magistrate, Hyderabad, was pending. It is further stated that the company petition was filed in order to wreak vengeance against the director of the respondent-company.

( 2 ) THE question that arises for consideration is whether the defence of the respondent denying its liability on the ground inter alia that it is barred by time is bona fide?

( 3 ) MR. Vinod Poddar, managing director, and Mr. V. C. Jain, accounts officer, were examined as PWs 1 and 2, while Mr. Nirmal Kumar Gupta, the director of the respondent-company gave deposition as RW 1.

( 4 ) PW-1 says that as per the statement of account, exhibit A-7, sent to the respondent along with the statutory notice an amount of Rs. 20,74,531. 33 is due, which claim the petitioner has never waived and that the respondent has admitted its liability by its letter dated 13/09/1986, exhibit A-5. He has also stated that the criminal case ended in acquittal. PW-2, accounts officer, says that the petitioner has not sent any debit note to the respondent for interest and that the outstanding amount relates to Bills Nos. 2, 3, 4 and 5 dated 2/07/1984 (exhibits A-11, 19, 27 and 35), for Rs. 2,56,041, Rs. 2,42,959. 50, Rs. 2,32,227 and Rs. 2,45,794. 50, totalling to Rs. 9,77,022. The balance represents the interest after deducting Rs. 1,50,000 paid by the respondent from March, 1986, to December, 1986, which has been adjusted towards interest. Though there is no trade practice to charge interest on delayed payment, condition No. 9 in the bills stipulates payment of interest.

( 5 ) MR. C. Malla Reddy, learned council for petitioner, has contented that as per the letter dated 13/09/1986 (exhibit A-5) written by the respondent, in reply to the demand made by the petitioner, the respondent has admitted its liability and requested the petitioner to accept payments at the rate of Rs. 15,000 per month as the respondent is facing some liquidity problem and acute shortage of working expense. He further submitted that as the account is mutual, current and open, the debts is not barred by limitation under article 1 of the Schedule to the Limitation Act as the last payment of Rs. 15,000 was made on 27/12/1986, while the company petition was filed on 15/12/1989. On the other hand, Mr. A. V. Krishna Koundinya, learned counsel for the respondent, submitted that even assuming that the petitioner has not waived its right to claim the amount and even assuming that the petitioner is entitled to charge int

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