2007 (8) TMI 466 - HC - Companies Law

Winding up - Circumstances in which a company may be wound up - Held that - Taking all into account including the so-called defences raised this Court on 11-6-2004 after hearing both the parties has admitted the petition. The petitioners have complied with all the necessary formalities as required under the law. The necessary affidavits are part of record. None appeared for the respondent-company though the matter has been in the list of final hearing board since 20-7-2007. It was adjourned from time to time for the response. On 24-8-2007 as last chance was given in the matter and in fact it was kept for disposal. None appeared for the respondent today again. Thus in view of uncontroverted position and the clear admissions on the part of the respondent-company, insofar as the liability in question is concerned, there is no doubt that the petitioner has made out a case as contemplated under the provisions mentioned.

Summary

Issues involved:
Petition for winding up a company due to failure to pay debts.

Analysis:
1. The petitioner filed a petition seeking the winding-up of the respondent-company due to its inability to pay debts amounting to Rs. 3,23,92,000 along with interest. The company acknowledged its liability in a Memorandum of Understanding (MOU) dated 22-9-1998 and agreed to a payment schedule, but failed to make the payments as agreed upon.

2. Despite subsequent agreements and promises to clear the outstanding dues, the company continued to default on payments. The petitioner initiated legal proceedings under the Negotiable Instrument Act and the Indian Penal Code for dishonoured cheques. The company's responses and actions indicated a lack of willingness or ability to settle the debts.

3. Various correspondences and agreements between the parties confirmed the company's acknowledgment of the outstanding dues and its commitment to repay the amount owed. However, the company failed to honor these commitments, leading to the petitioner's decision to seek winding-up under the Companies Act, 1956.

4. The respondent-company attempted to resist the winding-up petition without providing substantial evidence to support its claims. The court noted the clear admissions of liability by the company and the lack of valid defenses presented. The outstanding amount due, as per the petitioner's claim, remained substantial, justifying the petition for winding-up.

5. Considering the uncontroverted position and the respondent-company's failure to respond or oppose the petition, the court ruled in favor of the petitioner, allowing the winding-up of the company as per the prayers in the petition. The court found the petitioner had fulfilled all necessary formalities and requirements under the law, leading to the decision to wind up the company.

6. The court's decision to allow the petition was based on the respondent-company's clear admissions of liability, failure to make payments, and lack of valid defenses. The court emphasized the petitioner's case as per the provisions of the Companies Act, 1956, and granted the prayers in the petition without ordering costs against the respondent-company.