A winding up order should not be made if the company has bona fide disputed the amount claimed, and the proceedings should not be a substitute for a civil suit.

1. - The respondent, Indo Continental Hotels and Resorts Ltd. (for short, "the company"), was earlier known as S.B. Properties and Enterprises Ltd. All the properties of the erstwhile S.B. Properties arid Enterprises Ltd. have been taken over by the company. New Era Furnishers (P.) Ltd. (for short, "Era Furnishers"), is a private limited company. Tenders were invited by S.B. Properties and Enterprises Ltd., as it then stood, for furniture, furnishing and interior decoration of roof-top restaurant 'Shivir' and 'Rana Sanga Bar' in Hotel Mansingh at Jaipur. Anil Verma were the interior designers and all instructions were taken from them. Later on, the work order was revised and a fresh letter dated August 16, 1987, revising the previous letter dated July 9, 1987, was issued. It was done by Shri Kamal Bajaj, Chief Engineer of Mansingh Hotel, Era Furnishers started the work and completed the same within time and according to the terms and conditions of the work order, the company had been releasing payments to Era Furnishers on submitting their bills from time to time and as such a sum of Rs. 2,13,000 up to October 12, 1987, was remitted. Era Furnishers submitted its final bill on October 12, 1987, for the balance of Rs. 98, 313. Some defects were pointed out by the company arid the same were duly rectified by Era Furnishers. Era Furnishers had done some extra work also to the satisfaction of the Chief Engineer and Anil Verma, Interior Designer. The Chief Engineer, Shri Kamal Baijal, who settled the final bill of Era Furnishers including for the extra work done at Rs. 3,07,861 leaving a balance of Rs. 94,861 as due to the petitioner. A further sum of Rs. 44,000 was received by Era Furnishers on October 30, 1987, and thus a balance of Rs. 50,861 was still due and the said amount has been admitted by the company but has not been paid. Era Furnishers gave a statutory notice for payment of Rs. 50,861 as principal and interest thereon at the rate of 18% per annum, but still the amount has not been paid. It is the case of Era Furnishers that the respondent-company is unable to pay its debt within the meaning of Section 433 of the Companies Act, 1956 (for short, "the Act").

2. The petition is contested on behalf of the company on the ground that the amount due is not admitted and it is disputed and the work order remains incomplete till date and the defects pointed out have not yet been removed by Era Furnishers. The defects were pointed out in writing, vide letter dated October 17, 1987. Further communication was also sent. Thus, the case of the company is that a dispute existed between the parties all along of which Era Furnishers was aware but has deliberately tried to hide this fact from the court. It is said that the bills submitted on October 12, 1987, could not be final and the amount of Rs. 98,313 is not determined and does not fall within the four corners of clause of Section 433 of the Act. It is also the case of the respondent-company that, as per its last annual report, the respondent-company is commercially extremely well-off, with huge reserves which are now being utilised for expansion programmes. On being ordered by the court, the respondent-company also filed its latest balance-sheet to show its real financial status.

3. From a bare perusal of the latest balance-sheet of the company, it will appear that it is financially sound and there can be no dispute that, on the ground that it has no liquid assets with it, it is unable to pay the debts due to Era Furnishers. According to learned counsel for Era Furnishers, the respondent-company shall be deemed unable to pay its debts because despite a statutory notice under Section 434(1)(a) of the Act, it has failed to pay the undisputed amount. A winding -up petition will lie and a company may be wound up by the court in case the case falls under any of the Clauses (a) to (f) of Section 433 of the Act At best, the case of Era Furnishers can fall under Section 433 read with