1995 (12) TMI 280 - HC - Companies Law

Summary

Issues:
1. Liability of the respondent-company to pay outstanding royalty arrears.
2. Whether non-payment of the arrears constitutes a ground for winding up.
3. Maintainability of the company petition under Rule 21 of the Companies (Court) Rules, 1959.

Analysis:
1. The petitioner sought winding up of the respondent-company for not paying Rs. 2,51,677 in outstanding royalty arrears despite a statutory notice. An agreement required the respondent to pay royalty for technical know-how. The respondent admitted the arrears but disputed certain obligations. The respondent's cheque for Rs. 1,80,000 was dishonored. The court found no bona fide dispute on the liability to pay the arrears, leading to the allowance of the company petition.

2. The court addressed the issue of whether non-payment of the arrears justified winding up the respondent-company. The respondent's actions, including admitting the arrears, issuing a dishonored cheque, and failing to show a bona fide dispute, supported the petitioner's claim. The court ordered the winding up of the respondent-company, directing the official liquidator to take control of its assets.

3. The court examined the maintainability of the company petition under Rule 21. The petitioner initially filed the petition without proper authorization as per the rule. However, the petitioner later sought leave to rectify the deficiency by submitting a resolution authorizing the individual who filed the petition. The court allowed the rectification, emphasizing that the proviso to Rule 21 did not mandate submission of a power of attorney. The court overruled the respondent's objection and permitted the petition to proceed.

This detailed analysis of the judgment from the Andhra Pradesh High Court covers the liability of the respondent-company, the grounds for winding up, and the procedural aspect regarding the maintainability of the company petition under Rule 21 of the Companies (Court) Rules, 1959.