1990 (10) TMI 260 - HC - Companies Law

Summary

Issues:
- Petition for winding up under section 433(c) and (e) read with section 439(b) of the Companies Act, 1956.
- Default in repayment of loans by the company to the bank.
- Appointment of provisional liquidator.
- Consideration for winding up based on the absence of assets and business viability.

Analysis:
The petition was filed by Syndicate Bank seeking the winding up of a company, Printersall (P.) Ltd., for defaulting on loans granted by the bank. The company had ceased its operations, leading to financial troubles and non-payment of dues to the bank. The bank claimed outstanding amounts along with future interest, prompting the petition for winding up under the relevant sections of the Companies Act, 1956.

The court issued notices to the respondents, and upon their non-appearance, they were placed ex parte. Subsequently, the official liquidator was appointed as the provisional liquidator of the company. The court directed the bank to deposit a sum towards the expenses of the provisional liquidator, and it was later revealed that one of the directors had passed away.

The official liquidator reported that the company had no assets, making the winding up process futile as there were no funds to pay creditors. The bank argued that with the absence of assets and business operations, winding up was necessary in the public interest. The court considered the bank's submissions and the legal precedent that supports winding up a company when its business viability is compromised.

Relying on legal principles and precedents, the court concluded that the company should be wound up, appointing the provisional liquidator as the official liquidator. The court directed the bank to advertise the winding up order, serve a copy to the Registrar of Companies, and ordered the directors to file a statement of affairs. The official liquidator was tasked with debt recovery and other duties as per the Companies Act, emphasizing the need to serve a copy of the order to the company or its directors.

In summary, the judgment granted the petition for winding up based on the company's financial default, lack of assets, and the absence of a viable business, appointing the official liquidator to oversee the liquidation process and debt recovery.