2014 (7) TMI 1347 - HC - Companies Law

Winding up of respondent company - company unable to pay its debts - HELD THAT - It is prima facie established that an amount of ₹ 42,80,385/- along with interest as claimed is due and payable by the Company to the Petitioner. The Company has failed to respond to the statutory notice or make any payments to the Petitioner as called upon therein. A copy of the Petition is forwarded to the Company at its Registered Office on two occasions. However, the same has been returned with the remarks unclaimed/left respectively. Since the Company Petition has been served by the Petitioner at the registered address of the Company as shown in the records of the Registrar of Companies (ROC), the Petition is deemed to be served despite being returned with the remarks unclaimed/left . The Company Petition is admitted and made returnable on 14th August, 2014.

Summary

Issues involved:
Winding up petition based on inability to pay debts.

Analysis:
The petitioner sought winding up of the respondent company as it was unable to pay its debts. The company had entered into leave and license agreements with the petitioner for branding space at a mall. The company failed to pay the license fee as agreed upon and issued dishonored cheques. Legal notices were sent to the company demanding payment, which were also ignored. The company admitted its liability but failed to pay the outstanding amounts. Subsequently, the company issued undated cheques but later refused to honor them. Despite further legal notices, the company did not respond or make any payments. The petitioner filed a winding-up petition as the company was unable to pay its debts. The court found that a significant amount was due and payable by the company to the petitioner, and the company failed to respond to the statutory notice. The court deemed the petition served despite being returned unclaimed. Consequently, the court admitted the company petition and directed it to be advertised.

The court ordered the petitioner to advertise the petition in local newspapers and the government gazette. The petitioner was also directed to deposit a specific amount towards publication charges within a specified period, failing which the petition would stand dismissed. Additionally, the directors of the company were restrained from dealing with the company's assets without the court's permission. The court further instructed the petitioner's advocate to serve a copy of the order at the company's registered address by registered post with acknowledgment due.