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Winding up of the company based on loss of substratum and just and equitable grounds, appointment of Official Liquidator as provisional Liquidator. Winding up based on loss of substratum and just and equitable grounds: The petitioner, a shareholder of the company, sought winding up due to the company selling its entire business to a sister concern and not engaging in any business activities since 18-9-1995. The petitioner argued that the company had lost its substratum as it could no longer achieve its main objective. The company's financial statements showed no income from business activities but only interest income. The company opposed the winding up, stating it had funds to continue business activities and was considering voluntary winding up. The court noted that the company had indeed sold its plant and machinery, ceased its main objective activities, and was considering voluntary winding up. However, the petitioners, holding 1/3rd of the equity shares, opposed voluntary winding up as it would adversely affect their interests. The court found that the petitioners had made out a prima facie case for winding up based on lack of returns on equity shares and the company not conducting business activities. The court also noted that even if wound up, the company could still contest pending income-tax assessments. Appointment of Official Liquidator as provisional Liquidator: The court determined that as of 31-3-1996, there was no urgency to appoint a Liquidator as the company was not conducting any business activities, reducing the risk of asset dissipation. The court found no grounds to appoint a provisional Liquidator based on the available material. The court rejected the interim relief for the appointment of a provisional Liquidator. In conclusion, the court allowed the petition for winding up based on loss of substratum and just and equitable grounds, as the company had ceased its main objective activities and the petitioners had a prima facie case for winding up. However, the court rejected the appointment of the Official Liquidator as provisional Liquidator due to the lack of urgency and the absence of grounds for such an appointment based on the available material.
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