2002 (1) TMI 1222 - HC - Companies Law

Summary

Issues:
Winding up petition under sections 433(e) and (f), 434, and 439 of the Companies Act, 1956 due to default in payment of Inter Corporate Deposit.

Analysis:

1. Background and Allegations:
The winding up petition was filed against J.D. Polymers Ltd. for defaulting on an Inter Corporate Deposit of Rs. 3 lakhs. The petitioner alleged that the respondent-company failed to make timely payments as per the agreed terms, leading to the petition being presented on 3-2-1999.

2. Counter Affidavit and Payment Made:
In response, the managing director of J.D. Polymers Ltd. filed a counter affidavit stating that the company was not bound by a specific time limit for repayment. The respondent-company claimed to have been regularly paying interest and expressed readiness to repay the principal amount with interest. During the proceedings, the respondent made a partial payment of Rs. 3,97,059, but a balance of Rs. 37,225 remained due as interest accrued till 24-7-2000.

3. Court's Findings and Decision:
The court noted that the liability and interest rate were admitted by the respondent-company in the counter affidavit. Despite assurances of payment, the company failed to clear the outstanding balance of interest and deducted an amount towards TDS without submitting the necessary certificate. As a result, the court found the respondent-company negligent in fulfilling its payment obligations and ordered its winding up under section 433(e) of the Companies Act, 1956.

4. Appointment of Liquidator:
Following the decision to wind up the company, the official liquidator was appointed to take possession of the company's assets in accordance with the Companies (Court) Rules, 1959. This step was taken to ensure the proper liquidation of the company's assets and settlement of outstanding liabilities.

In conclusion, the judgment highlights the legal consequences of defaulting on financial obligations, emphasizing the court's authority to order the winding up of a company under the relevant provisions of the Companies Act, 1956 when payment defaults persist despite admitted liabilities and obligations.