2010 (10) TMI 1149 - HC - Companies Law

Summary

Issues involved: Winding up of the Respondent Company City Limouzines (India) Limited due to non-payment of monthly compensation to the Petitioner and allegations of financial irregularities and abandonment of registered office.

Details of the judgment:

Issue 1: Non-payment of monthly compensation
The Petitioner entered into an Agreement with the Company for monthly compensation, which the Company failed to pay since August 2009. The Petitioner demanded payment through a statutory notice, but the Company did not respond. The Court found that an amount was due to the Petitioner along with interest, as agreed in the Agreement. The Company's inability to pay its debts was established, and it was deemed to have abandoned its registered office.

Issue 2: Allegations of financial irregularities
The Company was accused of duping investors and being indebted to them for several hundred crores. Directors were arrested for economic offences, and meetings with shareholders and creditors were pending. The Court noted that several economic offences were registered against the Directors, and the Company had abandoned its registered office without informing the Registrar of Companies.

Issue 3: Appointment of Provisional Liquidator
Considering the Company's inability to pay debts and the risk of asset dissipation, the Court appointed the Official Liquidator as the Provisional Liquidator of the Company. The Provisional Liquidator was tasked with taking charge of the Company's properties and records pending the final disposal of the Petition.

The Court admitted the Company Petition and set a returnable date. The Petitioner was directed to advertise the Petition in local newspapers and deposit a specified amount towards publication charges. Failure to comply would result in dismissal for non-prosecution. The parties were instructed to act upon the Court's order accordingly.