2014 (3) TMI 1202 - HC - Companies Law

Proceedings for recovery of the amount claimed - Maintainability of proceedings for winding up of the respondent company - principal ground taken in the application is that the amounts owed by the respondent were not due and payable to the petitioner - HELD THAT - The documents produced by the petitioner along with this petition stand uncontroverted. It is an admitted case that the respondent had availed the financial facilities from the petitioner. The documents on record also indicate that the cheques issued by the respondent had been dishonoured. The learned counsel for the petitioner has pointed out the statement of accounts at pages 112 to 127 of the petition. The said statements clearly indicate that the respondent had defaulted in making the payments to the petitioner. In this view, there is no merit in the contentions urged by the learned counsel for Mr Ashwini Chawla. Accordingly, the respondent company is directed to be wound up. Renotify on 26.05.2014.

Summary

Issues Involved:
1. Winding up of the respondent company.
2. Dismissal of winding up petition.
3. Stay of order and permission to file a reply.
4. Appointment of Official Liquidator as a Provisional Liquidator.
5. Examination of dissipation of company assets and potential liability.

Winding up of the respondent company:
In a case where the respondent company faced a winding-up petition, the court examined the grounds presented by the managing director of the respondent company opposing the winding up. The managing director argued that the amounts owed were not due and payable to the petitioner and that the proceedings were malicious. However, the court found that the respondent had indeed defaulted on payments to the petitioner, as evidenced by dishonored cheques and statements of accounts. Consequently, the court dismissed the contentions raised and directed the winding up of the respondent company. The petitioner was instructed to publish the notice of winding up in specified newspapers within four weeks.

Dismissal of winding up petition:
An application was filed on behalf of the respondent company seeking the dismissal of the winding-up petition, claiming it to be malicious and asserting that the petitioner had alternative remedies for debt recovery. The court, after considering the inability of the respondent to pay the dues, found the application devoid of merit and dismissed it.

Stay of order and permission to file a reply:
Another application sought a stay of an order pending the dismissal of the company petition and permission to file a reply. However, since the previous application for dismissal had already been rejected, the court found no basis for the stay of the order or permission to file a reply. The court noted that the respondent had been given sufficient opportunities to contest the petition on merits, and thus, the prayer for recall of the order was not accepted.

Appointment of Official Liquidator as a Provisional Liquidator:
An application was made for the appointment of an Official Liquidator as a Provisional Liquidator. However, since the court had already directed the winding up of the respondent company, this application was deemed to be no longer relevant and was disposed of accordingly.

Examination of dissipation of company assets and potential liability:
A report highlighted the dissipation of company assets during a specific period, with the managing director being implicated in the mismanagement. The Official Liquidator was tasked with investigating whether the managing director was guilty of malfeasance and breach of trust, potentially leading to a compensation claim. The court directed the Official Liquidator to take necessary actions based on the findings.

This detailed analysis of the judgment showcases the various legal issues addressed by the court concerning the winding up of the respondent company, dismissal of petitions, appointment of liquidators, and examination of potential liabilities.