2014 (7) TMI 1324 - HC - Companies Law

Winding up of Company - company unable to pay its debt - HELD THAT - It is clear that the Company is commercially insolvent and is admittedly unable to pay its debts and deserves to be wound up. The learned Advocate appearing for the Company has on instructions informed the Court that the Company be wound up. In view thereof, the Company Petition is allowed in terms that the said Company namely, Pratibha shipping Company Limited, having its registered office at 1201/02, Arcadia, NCPA Road, Nariman Point, Mumbai400021, Maharashtra, be ordered to be wound up by and under the directions, supervision and control of this Hon'ble Court under the provisions of the Companies Act, 1956 and that the Official Liquidator attached to this Hon'ble Court or some other fit and proper person be appointed as the liquidator of the Company.

Summary

Issues:
- Winding up petition filed due to inability to pay debts
- Default in payment by the company
- Company's admission of insolvency
- Company petition allowed for winding up

Analysis:
The judgment pertains to a winding-up petition filed by the Petitioner against the Respondent Company, seeking to wind up the company on the ground of its inability to pay debts. The Petitioner claimed that a specific amount was due and payable by the Company, along with interest for necessaries supplied to the Company's vessels. The parties had previously filed Consent Terms, wherein the Company agreed to pay the outstanding amount in installments. However, the Company defaulted on the payments, leading to the admission of the Company Petition by the Court.

The Court noted the Company's commercial insolvency and its admission of being unable to pay debts. The Company's Advocate informed the Court that the Company consents to being wound up. Consequently, the Court allowed the Company Petition, ordering the winding up of the Company under the provisions of the Companies Act, 1956. The Court also directed the appointment of the Official Liquidator or another suitable person as the liquidator of the Company, granting them powers to take charge of the Company's assets, affairs, records, and documents for distribution in accordance with the law.

In compliance with the judgment, the Official Liquidator was instructed to promptly take charge of the Company's assets and records without delay. The judgment reflects the legal process followed in cases of commercial insolvency and the Court's authority to order the winding up of a company unable to meet its financial obligations.