2014 (1) TMI 1167 - HC - Companies Law

Winding up of company - Inability to pay debts - Payment not made for consignment received - Held that - there is a specific averment that the respondent company is unable to make the payment and is commercially insolvent. The defences taken by the respondent company are without any substance and appear to be mere moonshine. In these circumstances, I am satisfied that the respondent company is unable to pay its debts to the petitioner and therefore should be wound up - OL attached to this Court is appointed as the Provisional Liquidator ( PL ) of the Respondent. The OL is directed to take over all the assets, books of accounts and records of the Respondent forthwith. The OL shall also prepare a complete inventory of all the assets of the Respondent before sealing the premises in which they are kept. He may also seek the assistance of a valuer to value the assets. He is permitted to take the assistance of the local police authorities, if required - Decided in favour of Petitioner.

Summary

Issues:
Petition for winding up under Companies Act - Statutory notice requirements - Validity of notice served via e-mail - Respondent's defense against winding up - Appointment of Provisional Liquidator - Compliance with Companies Act requirements by Directors.

Analysis:
The judgment pertains to a petition filed by M/s Grandeur Collection seeking the winding up of M/s Shahi Fashions Pvt. Ltd. under sections 433(e), 434, and 439 of the Companies Act. The petitioner, a sole proprietorship engaged in the garment business, supplied goods to the respondent company, which accumulated an outstanding amount. Despite acknowledging the debt, the respondent failed to pay, leading to the petitioner issuing a winding-up notice. The respondent's defense included complaints about the quality of goods supplied and non-receipt of the statutory notice.

The court rejected the respondent's defense, citing a previous judgment that sending notices to the registered office suffices, regardless of actual receipt. The court dismissed the argument regarding the use of a different email ID for the notice, emphasizing that the statutory notice was sent to the email ID registered with the Registrar of Companies. The respondent's acknowledgment of the outstanding balance further supported the petitioner's claim.

Given the respondent's failure to respond to the statutory notice and the acknowledgment of debt, the court found the respondent commercially insolvent and unable to pay its debts. Consequently, the court admitted the winding-up petition and appointed the Official Liquidator (OL) as the Provisional Liquidator of the respondent. The OL was tasked with taking over assets, preparing an inventory, and ensuring compliance with Companies Act requirements by the respondent's directors.

Directors were directed to provide a statement of affairs verified by affidavit within 21 days, along with detailed asset information and financial statements. The OL was instructed to file a report before the next hearing. The court ordered the official liquidator to be informed promptly and scheduled further proceedings for a later date.