1995 (12) TMI 289 - HC - Companies Law

Summary

Issues:
1. Whether the petitioner has the locus standi to file a winding-up petition under section 433(f) of the Companies Act, 1956.
2. Whether there is an alternative remedy available to the petitioner under sections 397 and 398 or section 235 for investigation by the Central Government.

Detailed Analysis:
1. The petitioner, a private limited company, filed a petition seeking the winding up of the respondent-company under section 433(f) of the Companies Act, 1956, on the grounds of just and equitable reasons. The petitioner alleged that there was a partnership firm prior to the formation of the company, and after retirement deeds, assets were transferred to the respondent-company. The petitioner claimed to hold shares in the respondent-company and accused certain individuals of fraud and exclusion from shareholding and profits. The respondent countered, denying the petitioner's shareholding and presenting a different version of events, including agreements for transfer of shares and retirement of directors. The court noted the dispute regarding shareholding but found that a full inquiry was necessary to determine the actual shareholding status, leading to the rejection of the first objection raised by the respondent regarding locus standi.

2. The respondent argued that the petitioner had an alternative remedy available under sections 397 and 398 or section 235 for investigation by the Central Government, as per section 443(2) of the Companies Act. The court cited precedents such as Lokenath Gupta v. Credits Pvt. Ltd. and Atul Drug House Ltd., emphasizing the need for the petitioner to demonstrate a just and equitable ground for winding up and the absence of an alternative remedy. Referring to Jose J. Kadavil v. Malabar Industrial Co. Ltd., the court highlighted the discretion to refuse winding up if another remedy is available and if seeking winding up is deemed unreasonable. Ultimately, the court dismissed the petition on the basis of the availability of alternative remedies under the Act, such as approaching the Company Law Board under sections 397 and 398 or section 235, and cited the lack of evidence from the petitioner to support a different interpretation of the law.

In conclusion, the court dismissed the winding-up petition on the grounds of the petitioner having alternative remedies available under the Companies Act, specifically under sections 397 and 398 or section 235 for investigation by the Central Government. The judgment highlighted the importance of demonstrating a just and equitable ground for winding up and the necessity of exhausting alternative remedies before seeking winding up.