The central legal point established in the judgment is the requirement for a bonafide dispute and prima facie proof in disputed debt cases under the Companies Act, emphasizing the need for substantial and genuine disputes, and not allowing speculative or unreal disputes to avoid statutory demands.

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. 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