1999 (8) TMI 798 - HC - Companies Law

Summary

Issues:
Company petitions for winding up against respondent-company known as 'Motorol (India) Ltd.' based on inability to pay debts under sections 433 and 434 of the Companies Act, 1956.

Analysis:
The judgment addresses seventeen company petitions filed by different petitioning creditors against the respondent-company for winding up. The respondent-company's details, such as its nominal capital, issued capital, and office locations, are provided in the order. The petitions are filed under sections 433 and 434 of the Companies Act, 1956, alleging the respondent-company's inability to pay its debts and seeking winding up on just and equitable grounds.

The petitioning creditors assert that despite issuing statutory notices and serving the respondent-company for substantial amounts, the company failed to pay the debts within the statutory period. After hearing arguments from both sides, it is concluded that the respondent-company is indeed unable to pay its debts as per the provisions of sections 433 and 434 of the Companies Act, 1956.

Efforts were made by the petitioning creditors to recover the outstanding amounts before resorting to filing the winding-up petitions. The respondent-company issued cheques that bounced, made promises to pay in the future, and even executed memorandums of understanding (MOUs) but failed to fulfill their commitments. The company's actions, including bouncing cheques, violating conditional orders, and failing to honor obligations, demonstrate its inability to pay debts.

Considering all relevant aspects, the Court orders the winding up of the respondent-company under the Act. The Official Liquidator attached to the Court is appointed as the Official Liquidator of the respondent-company in liquidation, with obligations to be carried out as per statutory requirements. The registry is directed to inform the Official Liquidator and the Registrar of Companies, Gujarat, about the orders promptly.

In response to a request from the respondent-company's counsel, the Court stays the orders until 31-8-1999 to allow the company to pursue appeals. This comprehensive judgment thoroughly analyzes the financial situation and actions of the respondent-company, leading to the decision to wind up the company based on its inability to pay debts, as per the provisions of the Companies Act, 1956.