9911796707
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Issues Involved:
1. Substratum of the Company 2. Suspension of Business 3. Workers' Union Locus Standi Detailed Analysis: 1. Substratum of the Company: The petitioner, a shareholder, sought the winding up of the Cuttack Electric Supply Company Limited on the grounds that the company's substratum had gone. The petitioner argued that the company's sole undertaking was to generate and supply electric energy at Cuttack, and with the Government of Orissa purchasing the undertaking, the company had no other business to engage in. The petitioner contended that continuing the company's existence was unjustified. The court examined the memorandum of association, which outlined the company's objects, including generating and supplying electricity, carrying on the business of electricians, mechanical engineers, and other related activities. The court found that the memorandum's language indicated a broader scope of business beyond just supplying electric energy at Cuttack. The court emphasized that the main and paramount object of the company was to carry on a business of an electric light and power company in all its branches, not limited to Cuttack. The court referenced the observations of Lord Greene, M.R., in In Re Kitson and Co., Ltd., highlighting that a business is organic and can change over time. The court also noted that the shareholders had unanimously approved resolutions authorizing the sale of the company's undertaking and the utilization of the sale proceeds for any business authorized by the memorandum of association. The court concluded that the sale of the undertaking did not amount to a destruction of the company's substratum, as the company could still engage in other authorized business activities. 2. Suspension of Business: The petitioner introduced a further ground for winding up, claiming that the company had suspended its business for more than one year from February 1, 1962, with no hope of resuming. The court noted that this ground was not included in the original petition and could not be introduced at the hearing. Additionally, the court found that the suspension of business was due to the Government of Orissa taking possession of the company's property, pending the sale to the Orissa Electricity Board. The court held that the suspension was not voluntary and, therefore, did not justify winding up the company. 3. Workers' Union Locus Standi: The Workers' Union supported the winding up petition but had no locus standi to present such an application. The court noted that the agreement with the State of Orissa addressed the workers' concerns, including the transfer of provident fund accounts. The court stated that any grievances of the workers were outside the scope of the winding up petition. Conclusion: The court dismissed the application for winding up, finding that the company's substratum had not disappeared, the suspension of business was not voluntary, and the Workers' Union had no standing in the matter. The petitioner was ordered to pay the costs of the application, with a hearing fee of Rs. 100/-.
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