2018 (1) TMI 1725 - HC - Companies Law

Winding up of company - Service of SCN - HELD THAT - The company has neither filed any affidavit in reply opposing the petition nor anyone entered appearance. The averments in the petition are, therefore, not controverted. The company has also not responded to the statutory notice. It is settled law that where no response to a statutory notice has been made, the court may pass a winding up order on the basis that amount claimed has not been denied by the company and there is a presumption of inability to pay by the company. Where no response has been made to the statutory notice, the respondent company runs a risk of winding up petition being allowed. By virtue of Section 434 of the Companies Act 1956 a presumption of the indebtedness can be legitimately drawn by the court where no reply to the statutory notice is forthcoming. This Court while admitting the petition, in its order dated 25th April, 2017 has expressed a view that the company is unable to pay its debts and is commercially insolvent. It id ordered that the respondent company, namely M/s. Dharmraj Aluminum Industries Pvt. Ltd., having its registered office at B/2, Devprayag, Bhaktimandir Marg, Opp. Thanawala Automobiles, Thane 400 602, Maharashtra, be wound up by and under the orders, direction and supervision of this Hon'ble Court. Petition disposed off.

Summary

Issues:
- Service of notice under Rule 28 of the Companies (Court) Rules, 1959
- Company's failure to respond to statutory notice
- Presumption of inability to pay by the company
- Commercial insolvency of the company
- Winding up of the respondent company

Analysis:

1. Service of Notice under Rule 28: The petitioner's counsel sent a fresh notice to the respondent company, which was returned as "unclaimed." Additionally, an email notice was successfully delivered. The court deemed the notice served on the company based on these actions, as per Rule 28 of the Companies (Court) Rules, 1959.

2. Company's Failure to Respond to Statutory Notice: The respondent company neither filed an affidavit opposing the petition nor entered appearance. The lack of response to the statutory notice allows the court to pass a winding-up order, as the amount claimed remains undisputed, leading to a presumption of the company's inability to pay its debts.

3. Presumption of Inability to Pay: The court referred to Section 434 of the Companies Act 1956, which allows for a presumption of indebtedness when no reply to the statutory notice is received. In this case, the lack of response further supports the presumption of the company's inability to pay its debts, justifying the winding-up petition.

4. Commercial Insolvency of the Company: The court reviewed the petition, accompanying documents, and arguments presented by the petitioner's counsel. Based on the confirmation of accounts and the company's financial status, the court concluded that the company is commercially insolvent and unable to pay its debts, further supporting the decision for winding up.

5. Winding Up of the Respondent Company: The court allowed the company petition and issued orders for the winding up of the respondent company, M/s. Dharmraj Aluminum Industries Pvt. Ltd. The Official Liquidator or another suitable person was directed to take charge and conduct the company's affairs during the winding-up process, with immediate steps to be taken without delay.

6. Conclusion: The court's decision to wind up the respondent company was based on the lack of response to the statutory notice, the presumption of inability to pay debts, and the commercial insolvency of the company. The Official Liquidator was tasked with overseeing the winding-up process promptly, as per the court's orders.