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Issues:
1. Petition filed under section 433(c) of the Companies Act, 1956 for winding up. 2. Allegations of mismanagement leading to financial crisis and opposition by financial institutions. 3. Examination of objections raised against winding up application. 4. Appointment of official liquidator and specific directions for securing financial institutions' interests. 5. Investigation into asset valuation, sale, and conduct of directors. 6. Directions for engaging a chartered accountant to investigate financial mismanagement. 7. Emphasis on accountability of company officials and need for stringent action in cases of financial misconduct. Analysis: 1. The petition filed under section 433(c) of the Companies Act, 1956 seeks an order of winding up due to the company's inability to conduct business satisfactorily or repay debts owed to financial institutions. The company faced difficulties leading to a standstill in operations, prompting the petition for winding up. 2. Financial institutions, particularly Canara Bank, oppose the winding up, alleging gross mismanagement by company officials. The bank contends that the financial crisis was a result of deliberate actions post-borrowing, and the winding up petition is an attempt to evade liabilities. Negotiations for reviving the company were made, but the bank claims further assistance was misused. 3. Various objections against the winding up application were examined, with none found to impede the court from granting the petition. Despite acknowledging the financial institutions' concerns, the court emphasizes the legal grounds for winding up if a company's operations cease for over a year. 4. The court orders the winding up of the company under section 433(c) and appoints an official liquidator. Specific directions are issued to the official liquidator to secure the interests of financial institutions, investigate asset valuation discrepancies, and take necessary steps for the liquidation proceedings. 5. An investigation into the asset valuation, sale, and conduct of directors is mandated. The official liquidator is directed to engage a chartered accountant to probe potential financial mismanagement, misuse of funds, and misfeasance by company officials, ensuring accountability and thorough scrutiny. 6. Emphasizing the need for accountability, the court directs stringent action against those involved in financial misconduct, highlighting the trusteeship responsibilities of company officials over corporate assets and public funds. The court aims to set an example by holding guilty parties accountable in the public interest, signaling a commitment to transparency and integrity in corporate affairs.
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