2013 (12) TMI 1653 - HC - Companies Law

Summary

Issues Involved:
1. Non-payment of dues and winding up petition u/s 433(e) of the Companies Act, 1956.
2. Settlement talks and deferment of proceedings.
3. Financial viability and restructuring efforts.
4. Advertisement of winding up petition and appointment of provisional liquidator.

Summary:

1. Non-payment of dues and winding up petition u/s 433(e) of the Companies Act, 1956:
The petitioner filed a petition seeking winding up of the respondent-company for non-payment of dues amounting to approximately Rs. 2.9 crores. The petitioner had financed the respondent-company, which was supplying automobile clutches to various manufacturers, including TATA Motors. Despite several reminders and a statutory notice u/s 434(1)(a), the respondent failed to repay the amount, leading to the current winding up petition.

2. Settlement talks and deferment of proceedings:
Initially, there were settlement talks between the parties, but they failed. On 2.9.2013, the Court admitted the company petition but deferred further proceedings such as publication of citation in newspapers and appointment of a provisional liquidator for 8 weeks to enable revival talks or settlement proposals by the respondent-company.

3. Financial viability and restructuring efforts:
The respondent-company presented a Techno-Economic Viability Report and other documents to demonstrate its efforts towards restructuring and financial viability. The report highlighted the potential for achieving significant production levels and recommended restructuring loans and infusing working capital. The respondent also pointed to ongoing efforts to settle labour issues and shift operations from Faridabad to Bhiwadi. However, the petitioner argued that the respondent had not provided sufficient information or taken serious steps to repay the debt.

4. Advertisement of winding up petition and appointment of provisional liquidator:
The Court noted that the respondent-company had not initiated any talks or settlement proposals after the order dated 2.9.2013. Given the lack of progress and the outstanding debt, the Court directed the publication of the citation in the Delhi Gazette, Times of India (English), and Navbharat Times (Hindi) on 14th February, 2014, indicating that the winding up petition had been admitted but a provisional liquidator was yet to be appointed. The appointment of a provisional liquidator was deferred for consideration on the next hearing date, 5th March, 2014.