2018 (6) TMI 1534 - HC - Companies Law

Winding up application - Held that - Company is involved circumstances and it is unable to pay its debt under Section 433(e) of the Companies Act,1956. Thus, this Court has no option but to allow this winding up application. Accordingly, there shall be an order in terms of prayers (a) to (g) of the Judge s Summons. The Official Liquidator is directed to forthwith take possession of all the assets and properties of the company lying at its registered office its factories, together with its business and affairs.

Summary

Issues:
- Failure to pay monthly instalments as per consent order dated April 17, 2017.
- Company's inability to pay its debt under Section 433(e) of the Companies Act, 1956.

Analysis:
The petitioner filed a winding-up application against the company, which was admitted by a learned Single Judge. The company was granted an opportunity to pay the principal sum along with interest and costs within a specified time frame, failing which the winding-up application would be advertised. The company appealed this order but failed to deposit the required amount as directed by the Division Bench, leading to the advertisement of the winding-up application. Subsequently, the company filed an application seeking a stay of further proceedings, which was disposed of by a consent order dated April 17, 2017. As per the consent order, the company was to make a payment and monthly instalments, failing which the petitioner could proceed with the winding-up application.

The petitioner claimed that the company made initial payments but failed to pay the balance monthly instalments from December 2017 onwards. Despite being served, the company did not appear to dispute the petitioner's claims. The Court noted the uncontroverted facts and concluded that the company was unable to pay its debt under Section 433(e) of the Companies Act, 1956. As a result, the Court had no choice but to allow the winding-up application. The order directed the Official Liquidator to take possession of all assets and properties of the company, including its registered office and factories, along with its business and affairs. Urgent certified website copies of the order were to be made available to the parties upon application.

In summary, the judgment highlighted the company's failure to meet its financial obligations as per the consent order, leading to the Court's decision to allow the winding-up application based on the company's inability to pay its debt under the relevant legal provisions.