2017 (6) TMI 1268 - HC - Companies Law

Winding up petition - Held that - Statutory notice was issued way back on 28.04.2016, which has not been even replied by the respondent Company and even the notice of this Court was served in the month of September 2016, no reply is filed in the present petition. On the contrary, the copy of the minutes which is produced on record by Mr. Parth Contractor, learned counsel appearing for the respondent Company shows that the respondent Company is in financial doldrums and it is also quite evident from the submission made by Mr. Soparkar, learned advocate appearing for the petitioner that even the RBI has directed the Banks to take action against the respondent Company. The ground that the consortium of Bank is considering the bid would not take the case of the respondent Company any further. The creditors who are before this Court have been able to prima facie show that the respondent Company is in financial doldrum. In light of the aforesaid facts, the matter requires consideration. Hence, Admit. The order of advertisement is differed till the next date of hearing to give one more opportunity to the respondent. The petition is fixed for hearing on 18.07.2017.

Summary

Issues:
Petition for winding up of a company under sections 433, 434, and 439 of the Companies Act based on non-payment. Adjourning the petition to allow the respondent company to resolve financial issues and revive the company. Allegations of selective payments to creditors and potential disposal of company properties. Consideration of financial status and actions taken by the respondent company.

Analysis:
The petitioner filed a petition seeking the winding up of the respondent company, ABG Shipyard Ltd., under sections 433, 434, and 439 of the Companies Act due to non-payment issues. The petitioner issued a statutory notice to the respondent company and its directors, demanding payment of a specific amount along with interest. Despite the notice being served, the respondent company did not reply to it, indicating a lack of response to the payment demand.

The court had previously issued a notice regarding the petition, which the respondent company also did not respond to. Attempts were made to resolve the issue amicably, but no compromise was reached. The petitioner's counsel highlighted the lack of response from the respondent company and referenced a newspaper report where the RBI directed banks to take action against defaulters, including the respondent company.

On the other hand, the respondent company's counsel argued that efforts were made to secure financing, citing minutes of a meeting with ICICI Bank and a bid received during a Steering Committee meeting. The respondent requested an adjournment to resolve the financial issues and potentially revive the company. However, the petitioner's counsel alleged selective payments to creditors and expressed concerns about the possible disposal of company assets.

Considering the submissions and the financial status of the respondent company, the court found that the company was in financial distress. Despite claims of potential bids and financial restructuring, the court noted the lack of response to legal notices and the RBI's directive to take action against the company. Consequently, the court admitted the matter for further consideration, deferring the order of advertisement to allow the respondent one more opportunity to address the financial situation, with the next hearing scheduled for a specific date.

The respondent's request to stay the order was rejected, indicating the court's inclination to proceed with the matter. The decision to admit the petition and defer the advertisement order reflects the court's concern over the financial viability of the respondent company and the need for further examination of the situation before making a final decision on the winding-up petition.