Principle

COMPANY LAW — Winding-Up — Inability to Pay Debts — Effect of Bona Fide Dispute of Debt on Winding-Up Petition

Area of law: COMPANY LAW
Court: Supreme Court

A bona fide disputed debt cannot ground winding-up. The principle applies to company law. The creditor must first establish liability. The rule prevents abuse of winding-up proceedings. The court will dismiss the petition. The principle is well-established.

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