2008 (3) TMI 472 - HC - Companies Law

Winding up - Circumstances in which company may be wound up by Tribunal - Held that - Since the respondent company has lost its financial substratum and failed to discharge its liabilities towards the creditors, the companies is hereby ordered to be wound up. The official liquidator attached to this court is appointed as the liquidator of the company. He is directed to take charge of the assets, if any, of the company in liquidation. He is further directed to call for the details from the secured creditors, more particularly, from Bank of India and Dena Bank with regard to the amount realized from the sale of the assets of the company and amount paid to the workers till this date.

Summary

Issues:
Petition for winding up under sections 433 and 434 of the Companies Act, 1956 due to failure to discharge liabilities towards creditors.

Analysis:
The petitioner filed a petition seeking winding up of the respondent-company under sections 433 and 434 of the Companies Act, 1956, citing the respondent's failure to fulfill its obligations towards creditors, including the petitioner. The court issued notice to the respondent-company, which was duly served. An affidavit-in-reply was filed by the respondent-company. After considering the petition, the reply, and hearing both parties, the court passed an order of admission and advertisement. It was noted that the company's financial position seemed deteriorated, as it admitted its dues but was unable to pay. Secured creditors had already enforced their security under the Securitisation Act. Consequently, an order of admission was passed, and the petitioner was directed to publish advertisements in specified newspapers.

Following the advertisement, the petitioner received a communication from a workers union regarding previous legal proceedings involving the company's assets being sold. It was evident that the company had no assets left to conduct business, and secured creditors had already sold the assets after invoking the Securitisation Act. Due to the company's financial collapse and failure to meet its obligations, the court ordered the winding up of the company. The official liquidator attached to the court was appointed as the liquidator, tasked with taking charge of any remaining assets. The liquidator was instructed to gather details from secured creditors regarding asset sales and payments to workers, review past legal proceedings, and submit a report to the court. Additionally, ex-directors were to be notified to file statements of affairs. The petition was disposed of in accordance with these directions and observations.