2013 (4) TMI 108 - HC - Companies Law

Winding up petition - consequent to serious defaults in repayments of the amounts proceedings were initiated by the bank for recovery of the amounts due. - Held that - This petition needs to be allowed for the reason that the respondent-Company has not been able to pay its undisputed debts and has chosen neither to dispute the debt, assail the judicial order nor contest this petition. There is no other equally efficacious remedy available with the petitioner and that in the facts and circumstances of the case and background, it would be just equitable for the Company to be wound up. Under the facts and circumstances, the respondent-Company is ordered to be wound up.

Summary

Issues involved: Petition for winding up under Sections 433, 434, and 439 of the Companies Act, 1956.

Analysis:
1. Background and Proceedings: The petitioner, a limited liability company, sought winding up of the respondent, a private limited company, due to defaults in loan repayments and breaches of contractual obligations. The respondent did not contest the petition, leading to an ex-parte proceeding and subsequent admission of the petition. The matter was advertised as per Company Code Rules, and the respondent continued to not contest, resulting in the petition being scheduled for a hearing.

2. Loan Defaults and Legal Action: The respondent had serious defaults in loan repayments to the State Bank of India, Chandigarh, leading to legal action for recovery. An order by the Debt Recovery Tribunal awarded a substantial sum in favor of the bank, which was later assigned to the petitioner company. Despite various notices and legal actions, the respondent did not dispute the debt, leading to the current petition for winding up.

3. Debt and Non-Dispute: The judicial order established that the respondent owed a significant debt, which remained undisputed by the respondent throughout the legal proceedings. With no other effective remedy available to the petitioner, the court found it just and equitable to wind up the company due to its failure to pay the debts.

4. Winding Up Order: Considering the circumstances and the respondent's failure to pay its debts, the court ordered the winding up of the respondent company. The Official Liquidator was directed to take over the assets and liabilities, defray the debt as per the law, and publish notices of winding up in designated newspapers.

5. Disposal of Petition: The court directed the Registry to send copies of the order to the Official Liquidator and the Registrar of Companies where the respondent was registered. The petitioner was instructed to file a certified copy of the order with the Registrar within 30 days. The Official Liquidator was tasked with managing the winding up process and settling the debts, with the petition and any pending applications being disposed of accordingly.