1994 (11) TMI 308 - HC - Companies Law

Summary

Issues:
- Petition under section 433(e) of the Companies Act, 1956 for debt payment.
- Failure of company to pay debt leading to winding up petition.
- Allegation of illegal transfer of company assets.
- Appointment of provisional official liquidator and property possession.
- Contention on legality of sale deeds and debt acknowledgment.
- Consideration of multiple company petitions and responses.
- Lack of appearance by company representatives.
- Appointment of provisional official liquidator and petition advertisement.

Analysis:
The judgment pertains to a petition filed under section 433(e) of the Companies Act, 1956 by the petitioner, alleging a debt of Rs. 5,75,000 owed by the company, Ashoka Oil Products Pvt. Ltd. Despite service of notice and the company's acknowledgment of debt, the company failed to pay, leading to the petitioner seeking winding up. The court directed the official liquidator to identify and take possession of the company's property. Concerns were raised about the illegal transfer of assets to non-petitioners, prompting the court to authorize property seizure and factory sealing, with police assistance, to prevent further transfer or sale.

In response to the petition, the respondent's counsel contended that a separate petition challenged the legality of sale deeds and debt acknowledgment, suggesting a conspiracy and lack of proper service. The court acknowledged the pending petition but emphasized the need to address the current petition independently. Despite the respondent's arguments, the court found the service of notice valid and the lack of appearance by company representatives significant. The court highlighted that even if collusion existed between the petitioner and the company, unrelated parties lacked standing to dispute the debt or service of notice. Consequently, the court admitted the petition, appointed a provisional official liquidator, and ordered its advertisement in newspapers and the Official Gazette.

In conclusion, the judgment resolved the petition by admitting it, appointing a provisional official liquidator, and ordering its advertisement for wider notice. The court's decision was based on the valid service of notice, lack of appearance by the company, and the necessity to address the debt claim independently of other pending petitions.