2008 (2) TMI 622 - HC - Companies Law

Winding up - Circumstances in which a company may be wound up - Held that - The winding up of the company enures to the benefit of all the creditors of the debtor company. In the present case the company petition was advertised long ago and is pending for last more than 10 years. No other creditors except those, who have filed winding up petitions and those, who had opposed the scheme of restructure of debts have come forward claiming the dues either before the Court or before the Official Liquidator. The scheme for restructuring of debts demonstrated that the company is in production and wants to revive itself. It has shown its willingness and has now settled its dues with almost all its creditors. Thus the order dated 1-10-2007 winding up the respondent-company be re called. The winding up petitions are dismissed. The interim orders, which were passed in the winding up petitions are discharged. The Official Liquidator will intimate the respondent-company with the expenses incurred by it in the account of the company. The re spondent-company has assured to reimburse such expenses within a week of receiving the letter.

Issues:
1. Application for recalling the winding up order.
2. Settlement with creditors and objectors.
3. Compliance with conditions of creditors.
4. Official Liquidator's dues and reimbursement.

Issue 1: Application for recalling the winding up order
The High Court heard various counsels representing the parties involved in the winding up of a public limited company under the Companies Act. The company was wound up on a specific date, and subsequent applications were filed for recalling the winding up order. Settlement proposals and compromises were presented by the respondent-company, leading to the matter being referred to the Allahabad High Court Mediation & Conciliation Centre for possible resolutions with other parties involved. Cheques were submitted towards principal amounts, and subsequent applications supported by affidavits were filed to confirm settlements with various entities.

Issue 2: Settlement with creditors and objectors
The respondent-company entered into compromises with multiple parties, including creditors and objectors to the restructuring of debts scheme. Affidavits and no dues certificates were submitted, confirming the settlements. Counsel representing the companies involved in the settlements agreed to withdraw all proceedings against the respondent-company. All creditors who had objections to the restructuring of debts scheme agreed to withdraw their claims, signifying a resolution of disputes and differences.

Issue 3: Compliance with conditions of creditors
The respondent-company agreed to the conditions presented by Punjab National Bank and expressed readiness to comply with them. The creditors who had prosecuted the winding up petitions and objected to the debt restructuring scheme agreed to withdraw their claims against the respondent-company. This compliance with creditor conditions played a crucial role in resolving the issues surrounding the winding up of the company.

Issue 4: Official Liquidator's dues and reimbursement
The Official Liquidator sought an adjournment to determine if there were any expenses incurred that needed reimbursement by the respondent-company. Assurances were given by the respondent-company's representative that reasonable expenses incurred by the Official Liquidator for the purpose of liquidation would be reimbursed promptly. The Court acknowledged the benefit of the winding up to all creditors and, considering the settled dues and special circumstances, recalled the winding up order, dismissed the winding up petitions, and discharged interim orders.

In conclusion, the judgment highlighted the successful settlements reached between the respondent-company and various parties, leading to the recall of the winding up order and dismissal of winding up petitions. Compliance with creditor conditions and reimbursement of Official Liquidator's expenses were crucial aspects addressed in the judgment, ultimately resolving the long-pending issues surrounding the company's winding up process.

← Previous Next →