2005 (8) TMI 384 - HC - Companies Law

Summary

Issues:
1. Winding up petition filed by petitioners against the company.
2. Seizure of company's assets by the Orissa State Financial Corporation.
3. Legal implications of the seizure on the winding-up process.
4. Interpretation of relevant laws regarding the rights of financial corporations and charge holders.
5. Application of the law to the specific case at hand.

Issue 1: Winding up petition filed by petitioners against the company
The judgment discusses four cases where petitioners sought the winding up of Swami Marine Products Private Limited. Notices were published in newspapers as per court direction.

Issue 2: Seizure of company's assets by the Orissa State Financial Corporation
The company's assets were seized by the Orissa State Financial Corporation under section 29 of the State Financial Corporations Act 1951, with settlement proposals submitted. The company claimed that the assets were seized but not yet put up for sale.

Issue 3: Legal implications of the seizure on the winding-up process
The petitioner argued that despite the seizure, the court could still order winding up. Citing precedents, it was contended that the court could pass such an order even with seized assets.

Issue 4: Interpretation of relevant laws regarding the rights of financial corporations and charge holders
The judgment referenced the Maharashtra State Financial Corporation case, emphasizing the need for court consent for property sale when a charge holder is involved. It highlighted the importance of court approval in such matters.

Issue 5: Application of the law to the specific case at hand
The court analyzed the A. P. State Financial Corporation case, clarifying the statutory rights of financial corporations and the priority of workmen's dues. It concluded that the company should be wound up, appointing an official liquidator and restraining the Financial Corporation from selling the seized properties.

In conclusion, the judgment delves into the complexities of winding up a company when its assets are seized by a financial corporation. It interprets relevant laws, precedents, and legal provisions to determine the course of action. Ultimately, the court orders the winding up of the company, appoints an official liquidator, and restricts the Financial Corporation from selling the seized properties, emphasizing the priority of workmen's dues in such proceedings.