2012 (4) TMI 66 - HC - Companies Law

Dissolution of the Company (in liquidation) under Section 481 of the Act - application moved by the Official Liquidator ) for dispensing with the requirement of filing the accounts and audit of the Company (in liquidation), since it has no funds to its credit - that the Official Liquidator is not in a position to proceed further with the winding up of the Company for want of funds, assets and reasons stated in the application and for discharging the Official Liquidator from proceeding further - promoters of the Company (in liquidation) filed for winding up of the said Company on the ground that though the Company was incorporated in the year 1992, no shares was subscribed and no statutory meeting of the Company has held - Held that - when the affairs of the Company had been completely wound up or the Court finds that the Official Liquidator cannot proceed with the winding up of the company for want of funds or for any other reasons, the Court can make an order dissolving the Company from the date of that order Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti 2007 78 SCL 482 - Consequently the Company (in liquidation) shall stand dissolved and the Official Liquidator attached to this Court is discharged - make necessary arrangement for payment of fee to the counsel for the Official Liquidator from the Common Pool Fund

Summary

Issues:
Application for dispensing with the requirement of filing accounts and audit of the Company in liquidation; Application for dissolution of the Company in liquidation under Section 481 of the Companies Act, 1956.

Analysis:
The Official Liquidator filed an application under Section 481 of the Companies Act, 1956, seeking dispensation from filing accounts and audit of the Company in liquidation due to lack of funds. The Company, M/s. Baruah & Baruah Drugs Private Limited, was wound up by the Court in a previous judgment. The Company had no assets, bank accounts, investments, or liabilities. No statutory returns were filed, and there were no pending litigations or claimants. The Official Liquidator requested dissolution of the Company, citing the impracticality of further proceedings due to the absence of funds and assets.

The Court reviewed the application and referred to a Supreme Court judgment in Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti, highlighting that when the Official Liquidator cannot proceed with winding up due to lack of funds, the Court can order dissolution of the Company. Considering the circumstances and the legal precedent, the Court found merit in the Official Liquidator's request for dissolution. Consequently, the Court ordered the dissolution of the Company in liquidation and discharged the Official Liquidator from further proceedings.

Additionally, the Court dispensed with the requirement of filing accounts and audit due to the Company's lack of funds. The Official Liquidator was instructed to arrange for the payment of fees to the counsel from the Common Pool Fund. A copy of the order was directed to be sent to the Registrar of Companies within thirty days. The application under Section 481 of the Companies Act was disposed of accordingly, concluding the legal proceedings related to the dissolution of the Company in liquidation.