2016 (8) TMI 1536 - HC - Companies Law

Failure to tender or pay the amount outstanding in respect of the facilities provided to the respondents - Section 433 (e) (f) of the Companies Act, 1956 - HELD THAT - The record reveals that several attempts for service of the respondent were made. Notice sent by registered post for the service of the respondent was refused on 13.01.2015. Speed post sent on 04.01.2015 was delivered on 07.01.2015. The respondent was thereafter served by way of substituted service and notice was published in Rashtriya Sahara (Hindi Edition) dated 09.12.2015 and Statesman (English Edition) dated 10.12.2015. Further publication was carried out in Statesman (English) dated 08.02.2016 and Dainik Jagran (Hindi) dated 08.02.2016. None appears for the respondent despite service several times. The petition is admitted. The respondent and its Directors are restrained from selling, alienating, parting with possession or encumbering the assets both movable and immoveable of the respondent Company. The Directors are further restrained from operating the bank accounts of the respondent Company. The Directors shall also file the Statement of Affairs with the Official Liquidator within the statutory period - Renotify for directions on 21.03.2017. The Official Liquidator shall file his report before the next date of hearing.

Summary

Issues:
Petition under Section 433 (e) & (f) of the Companies Act, 1956 for default in payment by respondent company leading to owed sum, issuance of notices, appointment of Provisional Liquidator, restraint on selling assets, and filing of Statement of Affairs.

Analysis:
The petitioner filed a petition under Section 433 (e) & (f) of the Companies Act, 1956, stating that the respondent company defaulted in payment, resulting in a significant outstanding amount. Various finance agreements were executed between the parties, including Channel Finance and Term Loan Facility agreements. Despite serving notices under Sections 433 and 434, the respondent failed to pay the outstanding amounts. The court noted the attempts made for serving the respondent, including registered post, speed post, and publication in newspapers. As the respondent did not appear despite multiple service attempts, the petition was admitted.

The Official Liquidator was appointed as the Provisional Liquidator by the court. The Provisional Liquidator was directed to take immediate control of the assets, Books of Accounts, and the Registered Office of the respondent company. The court ordered the publication of the citation for the admission of the petition in designated newspapers and the Official Gazette. Additionally, the respondent and its Directors were restrained from dealing with the assets or operating bank accounts of the company. The Directors were required to file a Statement of Affairs with the Official Liquidator within the specified period.

The court scheduled a renotification for directions on a future date, with a requirement for the Official Liquidator to submit a report before the next hearing. The order was to be issued under the signatures of the Court Master, indicating the seriousness and authority of the court's decision. The detailed proceedings highlighted the legal actions taken due to the respondent's default and the measures imposed to protect the interests of the petitioner and prevent any further dissipation of assets by the respondent company and its Directors.