2010 (5) TMI 401 - HC - Companies Law

Dissolution of company-in-liquidation seeked Held that - No purpose is going to be served to continue with the proceedings in regard of the company-in-liquidation and there appears to be no possibility for recovery of debts and in these circumstances, the company-in-liquidation M/s. Auto Electrical Private Limited in exercise of powers under section 481(1) of the Companies Act stands dissolved and the Official Liquidator may send its report, in terms of section 481(2) to the Registrar of Companies for taking necessary action in accordance with law.

Summary

Issues:
Application for dissolution of company-in-liquidation under section 481 of the Companies Act.

Analysis:
The matter pertains to an application filed by the Official Liquidator seeking permission for the dissolution of a company-in-liquidation, M/s. Auto Electricals (India) Private Limited. The company was ordered to be wound-up by the court in 1987, and the Official Liquidator was appointed as the provisional liquidator. The Official Liquidator took necessary steps for taking over the assets and records of the company and issued statutory notices. The assets of the company were under the custody of a bank, and certain legal proceedings were initiated against ex-directors of the company. The Official Liquidator communicated with the Income-tax Department regarding any outstanding dues but did not receive any demand notice. Subsequently, applications were filed for the dissolution of assets, and various permissions were sought and granted for disposing of goods through scrap or public auction. The possession of rented premises was also handed over to a party as per court directions. The Official Liquidator submitted a final report showing a balance with him, which was deposited in a bank account. Considering the circumstances and the lack of recovery possibilities, the court deemed it appropriate to dissolve the company-in-liquidation under section 481(1) of the Companies Act. The Official Liquidator was directed to send a report to the Registrar of Companies for further action.

This detailed analysis of the judgment highlights the procedural history, actions taken by the Official Liquidator, court orders, disposal of assets, possession of premises, legal proceedings against ex-directors, and the final decision to dissolve the company-in-liquidation. The judgment provides a comprehensive overview of the events leading to the dissolution and the legal basis for such a decision under the Companies Act.