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Issues Involved:
1. Whether the petitioner had locus standi to present the petition. 2. Whether the company is liable to be wound up under clauses (c) and (f) of section 433 of the Companies Act. Issue-wise Detailed Analysis: 1. Locus Standi of the Petitioner: The first issue regarding the locus standi of the petitioner was not pressed, and no arguments were addressed on this issue. Therefore, it does not require further determination. 2. Liability of the Company to be Wound Up under Clauses (c) and (f) of Section 433: The primary issue requiring determination was whether the company was liable to be wound up under clauses (c) and (f) of section 433 of the Companies Act. Clause (c) - Non-Commencement of Business: - It was undisputed that the company did not commence its business within a year from its incorporation in March 1955. The company had done no active business of any kind till the date of the petition filed on 9th May 1959. - According to Section 433(c), a company may be wound up by the Court "if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year." - The company argued that the Court's power is discretionary and sought condonation for the failure to commence business, citing the revocation of the license by the Central Government and harassment of the Managing Agent by disgruntled shareholders. - The Court found this reason to be completely otiose and noted that where past delay is sufficiently accounted for and there is a likelihood of business resumption, the Court may not exercise its discretionary power against the company. However, in this case, there was no commencement of any business ever since the inception of the company. Clause (f) - Just and Equitable Ground: - The Court examined whether it was just and equitable to wind up the company, noting significant admissions by Shri Ishwar Chander Latka, the Managing Agent, including the revocation of the company's license in December 1958 and the company's incurred losses. - The company's assets mainly consisted of uncalled capital, money due from defaulting shareholders, a plot of land, and some recently installed chaff-cutting machinery. - The Court found that the company had done no business from its inception and had incurred significant losses. The main object of setting up a cotton mill had failed, and the company had not engaged in any other industrial activity until the recent installation of chaff-cutting machinery during the pendency of proceedings. - The Court referred to the principle that if the main original object for which the company was formed has substantially failed or the substratum is gone, it is just and equitable to wind up the company. - The Court also considered the case of Muralidhar Roy v. Bengal Steamship Co. Ltd., distinguishing it on the facts, as the company in the present case had not undertaken any alternative undertaking for nearly five years. Conclusion: - The Court applied the usual tests for determining whether the substratum of the company had disappeared, including whether the subject-matter of the company was gone, the object had substantially failed, or it was impossible to carry on the business except at a loss. - The Court concluded that there was no reasonable hope that the company would be able to carry on its business profitably and that the substratum was gone. - The suggestion to place the matter before a domestic forum and call a meeting of shareholders was rejected, as the shareholders had not shown vigilance in protecting their interests. - The Court ordered the winding up of the company under clauses (c) and (f) of section 433, appointing the Official Liquidator to take charge of the assets and records of the company and proceed with the liquidation. Order: The respondent company is ordered to be wound up by the Court, and the Official Liquidator attached to the Court is appointed to carry out the work of liquidation.
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