2018 (6) TMI 1578 - HC - Companies Law

Winding up petition - company has not commenced and has failed to hold the statutory meetings and to deliver statutory reports - default in filing with the Registrar its balance-sheet, profit and loss account or annual returns for five consecutive financial years - HELD THAT - It a company can be wound up if a default is made in delivering the statutory report to the Registrar or in holding the statutory meetings and if the company does not commence its business within a year of incorporation or suspends its business for the whole year. Similarly, under section 433(d) of the Act of 1956, the company can be wound up if the number of members is reduced below two in case of a private company (as in the present case). Under section 433(g), the company can be wound up if it has made default in filing with the Registrar its balance-sheet, profit and loss account or annual returns for five consecutive financial years. In considered view, the provisions of section 433(b), (c), (d) and (g) of the Act of 1956 would be attracted in this case and thus, it would be just and proper that the company is wound up. The fact that the company has not commenced and has failed to hold the statutory meetings and to deliver statutory reports, is explicit from the record, including the letter dated September 18, 2009 from Eric Sequeira. As noticed earlier, there were only two shareholders/directors of the company namely, the petitioner and Shri Eric Sequeira and on the death of Mr. Secqueira, the number of members is reduced below two. Thus, the company, which is a private limited company, is liable to be wound up also under section 433(d) of the Act of 1956. In the circumstances, the petition is allowed

Summary

Issues:
Petition for winding up under sections 433, 434, and 439 of the Companies Act, 1956; Opposing affidavit filed in response to public notice; Retention of petition based on previous court decision; Company's incorporation details; Share capital and business objectives; Lack of business activities and compliance; Disputes between directors affecting company operations; Response opposing the winding-up petition; Consideration of statutory requirements and filings; Application of section 433 for winding up; Appointment of Official Liquidator.

The judgment addresses a petition for winding up a company under sections 433, 434, and 439 of the Companies Act, 1956. An opposing affidavit was filed by a party contesting the winding-up proceedings, citing a pending suit for specific performance and financial claims. The court retained the petition based on a previous decision and examined the company's incorporation details, authorized share capital, and business objectives related to property development. It was noted that the company had not conducted any business activities since its inception, leading to disputes between the directors and non-compliance with statutory requirements, including holding meetings and filing returns.

In response to the petition, the opposing party highlighted the company's financial investments and ongoing litigations, arguing against the grounds for winding up. The petitioner's counsel presented evidence of non-compliance with statutory requirements and the company's name being struck off the register, emphasizing the maintainability of the winding-up petition despite this action. After considering the circumstances and submissions, the court analyzed section 433 of the Act of 1956, identifying defaults in holding meetings, lack of business commencement, and non-filing of financial documents as grounds for winding up.

The judgment concluded that the company met the criteria for winding up under section 433 of the Act of 1956, specifically due to the lack of business activities, failure to hold statutory meetings, and non-filing of required reports. With only two shareholders and one deceased, reducing the members below the required limit, the court ordered the winding up of the company. The Official Liquidator of the High Court of Bombay at Goa was appointed to oversee the liquidation process, including asset distribution in accordance with the law. The petitioner was instructed to follow the necessary steps for public notice publication, and the Registrar of the court was directed to inform relevant authorities about the winding-up order promptly.