This Court in Madhusudan Gordhandas v. Madhu Woollen Industries Pvt. Ltd., (1971) 3 SCC 632 observed:

If the debt is bona fide disputed and the defence is a substantial one, Court will not wind-up the Company [London and Paris Banking Corporation, (1874) LR 19 Eq 444; Brighton Club and Horfold Hotel Co. Ltd., (1865) 35 Beav 204]. Where the debt is undisputed, Court will not act upon a defence that the Company has the ability to pay the debt but the Company chooses not to pay that particular debt. Where, there is no doubt, the Company owes the Creditor a debt entitling him to a winding-up Order but the exact amount of the debt is disputed, Court will make a winding-up Order without requiring the Creditor to quantify the debt precisely [Tweeds Garages Ltd., 1962 Ch 406]. The principles on which Court acts are first, the defence of the Company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly, the Company adduces ‘prima facie’ proof of the facts on which the defence depends.

As to whether the defence of a Company is in good faith or as to whether it is of substance and as to whether it is likely to succeed in point of law and as to whether the Company adduces ‘prima facie’ proof of the facts on which defence depends, would depend upon the facts of each case.

– Hon’ble Justice B.R. Gavai, Shital Fibres Ltd. v. Indian Acrylics Limited, [Civil Appeal No. 1105 of 2021].