2016 (7) TMI 1560 - HC - Companies Law

Adjournment of the case - Winding up of company - non-payment of principal amount - HELD THAT - The fact remains that sufficient opportunity has been granted to the respondent file a reply on merits and also to comply with other directions regarding the disclosure of pertinent facts with regard to the functioning assets and indebtedness of the company. There has been no effective response by the respondent in this behalf. The petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets books of accounts and records of the company forthwith. The citations be published in the Delhi editions of the newspapers Statesman (English) and Veer Arjun (Hindi) as well as in the Delhi Gazette at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall tentatively deposit a sum of 75, 000/- with the Official Liquidator within 2 weeks subject to any further amounts that may be called for by the liquidator for this purpose if required.

Summary

Issues: Petition seeking winding up of respondent company due to non-payment of principal amount.

The judgment pertains to a petition seeking the winding up of a company based on alleged non-payment of a principal amount despite serving a notice of winding up. The petitioner claimed that no reply was received after serving the notice. The court issued a notice to show cause why the company should not be wound up, directing the company's directors to file personal affidavits disclosing relevant particulars. The matter was adjourned multiple times to allow the respondent to file a reply. Despite several opportunities, the respondent failed to respond effectively or disclose pertinent facts about the company's functioning, assets, and indebtedness.

As a result, the petition was admitted, and the Official Liquidator was appointed as the Provisional Liquidator. The Official Liquidator was directed to take over all assets, books of accounts, and records of the company immediately. Citations were ordered to be published in newspapers and the Delhi Gazette, with costs to be borne by the petitioner. The Official Liquidator was instructed to prepare an inventory of assets, seal the premises where assets are kept, and seek police assistance if necessary. Directors were required to file a statement of affairs, and the company and its directors were restrained from dealing with company assets without court permission. The Official Liquidator was to file a compliance report, and the case was set for further hearing on a specified date.

In conclusion, the judgment highlighted the court's intervention in appointing the Official Liquidator as the Provisional Liquidator due to the respondent's failure to respond adequately to the winding-up petition and disclose essential information about the company's financial status. The detailed directions provided in the judgment aimed to ensure the protection of assets, proper valuation, and orderly winding up of the company, emphasizing the court's commitment to overseeing the process effectively.