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Issues:
1. Application for recalling winding up order based on default in commitments and payments. 2. Compliance with conditions imposed in the order dated 10-8-2000. 3. Failure to make payments and demonstrate bona fides. 4. Misuse of discretion under section 466 of the Companies Act. 5. Decision on vacating the order dated 10-8-2000 and reviving the winding up order dated 16-8-1999. Analysis: 1. The case involved an application for recalling the winding up order of a company due to default in commitments and payments made by the company. Initially, the winding up order was passed on 16-8-1999, but subsequently, an order dated 10-8-2000 was issued under section 466 of the Companies Act, keeping the winding up order in abeyance subject to certain conditions. The company had made arrangements with creditors for phased payments, but a secured creditor, Syndicate Bank, filed an application stating that the company had defaulted on commitments, leading to the current situation. 2. The compliance with the conditions imposed in the order dated 10-8-2000 was questioned as the company failed to honor its commitments and make payments as agreed with the creditors. Despite multiple opportunities and extensions granted by the Court for demonstrating bona fides and making substantial payments, the company did not comply. The Court noted that the company was not interested in repaying debts and was only delaying the process for vested reasons, indicating a lack of genuine intention to fulfill obligations. 3. The Court found that the company had failed to make any fresh payments, and the excuses provided for non-payment, such as the earthquake in Gujarat and high interest rates demanded by creditors, were not considered sufficient reasons for non-compliance. The Court emphasized that the focus should be on whether the company was adhering to the conditions set in the order and fulfilling its obligations to creditors. The lack of new investments from investors further indicated a lack of commitment to revive the company's financial situation. 4. Considering the misuse of discretion under section 466 of the Companies Act and the company's failure to demonstrate genuine efforts to repay debts and revive the company, the Court decided to vacate the order dated 10-8-2000 and revive the winding up order dated 16-8-1999. The Official Liquidator was directed to take charge of the company's assets immediately, highlighting the Court's decision to prioritize the interests of creditors over granting further leniency to the company. 5. In conclusion, the Court allowed the application for vacating the order dated 10-8-2000, leading to the revival of the winding up order dated 16-8-1999. The decision was based on the company's failure to meet its commitments, demonstrate bona fides, and show genuine efforts to repay debts, ultimately prioritizing the interests of creditors and the need for decisive action to address the company's financial situation.
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