2012 (5) TMI 250 - HC - Companies Law

Voluntary winding up - Revival - petitioner-company has not done any business since 2001-02 and thus, it has not earned any income for the last ten years. He states there is no hope or prospect of the petitioner-company doing any further business as stated in its Memorandum of Association. He submits that keeping in view the long duration in which the petitioner-company had not done any business, it would be just and equitable to wind up the petitioner-company - shareholders of petitioner-company have passed a special resolution in an extraordinary general meeting held on 9-10-2006 resolving to wind up the petitioner-company by the Court -Court finds that the petitioner-company has filed counter-claim of Rs. 11,21,63,605 against Prasar Bharti in arbitration proceedings which is still pending adjudication. In the event, the counter-claim of the petitioner-company is allowed, the possibility of revival of petitioner-company cannot be denied. - no justifiable ground for winding up is made out. - petition and application are dismissed

Summary

Issues:
Petition for voluntary winding up under section 433(a) read with section 439 of the Companies Act, 1956; Special resolution passed by shareholders for winding up; Dispute pending adjudication before an arbitrator; Opposition by Registrar of Companies and Prasar Bharti; Exercise of discretion under section 433(a) of the Act; Financial health and future prospects of the company; Intent of the petitioner in filing for winding up.

Analysis:
The petitioner filed a petition under section 433(a) read with section 439 of the Companies Act, 1956 seeking voluntary winding up of the company due to its inactivity since 2001-02 and lack of income for the past ten years. The petitioner argued that it would be just and equitable to wind up the company based on precedents like Surendra Kumar Pareek v. Shree Guru Nanak Oils and others. However, a dispute with Prasar Bharti from 1998-99 was pending adjudication before an arbitrator, which the petitioner acknowledged. The shareholders passed a special resolution for winding up, citing the company's inability to pay debts and the substratum being gone, referring to the Bombay High Court judgment in Bombay Metropolitan Transport Corpn. Ltd. v. Employees of Bombay Metropolitan Transport Corpn. Ltd.

The Registrar of Companies and Prasar Bharti opposed the petition, emphasizing that winding up should only occur with compelling reasons and considering factors like solvency and creditors' interests. Prasar Bharti's counsel argued that the petitioner's motive was to avoid an impending arbitration award and did not disclose a counter-claim against Prasar Bharti. The court noted the discretionary nature of winding up under section 433(a) and the importance of financial health and future prospects of the company, as highlighted in judgments like New Swadeshi Mills of Ahmedabad Ltd. v. Dye-Chem Corporation.

The court found that the petitioner's counter-claim against Prasar Bharti in arbitration proceedings indicated a possibility of company revival, thus rejecting the notion that the substratum had disappeared. It concluded that the petition seemed intended to thwart the arbitration proceedings and place the Official Liquidator in a contentious position, which was deemed impermissible. Citing precedents like Bombay Metropolitan Transport Corpn. Ltd., the court held that no justifiable ground for winding up was established in this case.

Therefore, the court dismissed the petition and application, with no order as to costs, based on the lack of sufficient grounds for winding up the company.