2018 (10) TMI 1787 - HC - Companies Law

Recall of winding up order - honor of instalments - consent terms - HELD THAT - The applicant Mr.Viral Nandu, apart from the undertaking given in the consent terms, which is accepted and so ordered, personally undertakes that each of the installments will be honoured on due dates and in case of default, petitioner may even execute consent terms with the order as a decree against the company and each of the directors of the company. The applicant states that he has authority from all the directors of the company to make this statement in this court, which is accepted. As the winding up order has to be re called, the applicant through his advocate to give notice in Free Press Journal' and Navshakti' by 19.10.2018 about the proposed withdrawal as per the format prescribed by the Official Liquidator/Company Registrar, returnable on 2.11.2018.

Summary

Issues:
1. Consent terms signed by parties
2. Undertaking by ex-director for honoring installments
3. Procedure for recalling winding up order

Analysis:
1. The High Court of Bombay noted that the parties involved in the case had entered into consent terms dated 17.10.2018. These terms were signed by the ex-director of the company in liquidation, the authorized signatory of the petitioner, and their respective advocates. The court accepted the consent terms and marked them for identification. The ex-director personally undertook to honor each installment on due dates. In case of default, the petitioner could execute the consent terms as a decree against the company and each director. The ex-director confirmed having authority from all directors to make this statement in court, which was accepted by the court.

2. Since the winding-up order needed to be recalled, the ex-director, through his advocate, was directed to give notice in 'Free Press Journal' and 'Navshakti' by 19.10.2018 regarding the proposed withdrawal. The notice was to be in the format prescribed by the Official Liquidator/Company Registrar and returnable on 2.11.2018. This step was crucial in the process of recalling the winding-up order and ensuring compliance with the legal requirements for such actions.

This judgment showcases the importance of consent terms in legal proceedings, the significance of honoring financial commitments, and the procedural aspects involved in recalling a winding-up order. The court's meticulous approach in ensuring compliance with the prescribed procedures and legal formalities is evident throughout the analysis of the issues involved.