2008 (11) TMI 396 - HC - Companies Law

Summary

Issues:
Winding up petition under section 433 of the Companies Act, 1956 - Failure to meet liability - Admission of liability by respondent company - Appointment of provisional liquidator - Status report by Official Liquidator - Company's financial status - Invitation of claims from creditors - Order for winding up - Appointment of Official Liquidator as liquidator.

Analysis:
The petition was filed by M/s. Cross Link Cargo Management Private Limited seeking the winding up of the respondent company under section 433 of the Companies Act, 1956 due to non-payment of liabilities despite admitting the same. The respondent company cited financial constraints for non-payment, acknowledging the outstanding amount. The court found a case under section 433(e) of the Companies Act, 1956 and appointed the Official Liquidator as the provisional liquidator to secure the assets of the respondent company.

A status report submitted by the Official Liquidator revealed discrepancies regarding the registered office of the company, indicating that the company was merely renting space. The company's financial status was further disclosed, showing minimal assets consisting of a bank balance. Subsequently, individual notices were issued to creditors to invite claims, but no claims were received. Based on the Official Liquidator's report, the court passed an order for the winding up of the company.

Considering the company's inability to settle its debts and lack of substantial assets, the court deemed it just and equitable to wind up the company. The Official Liquidator attached to the Court was appointed as the liquidator to take charge of the company's assets, books, and records. Additionally, directions were given for the publication of a fresh citation in specified newspapers, with costs to be borne from the company's account. The Registrar of Companies was to be informed about the winding up order, and the Official Liquidator was directed to provide a status report on a specified date. Consequently, related applications were dismissed in line with the company petition order.