2016 (3) TMI 335 - HC - Companies Law

Winding-up petition - appointment of Official Liquidator - Held that - This Court has granted more than sufficient time to the respondent-Company in order to make the payment of the outstanding dues of the petitioner, not disputed by the respondent-Company. The Undertaking given by the respondent-Company before this Court has not been honoured by it and all the Cheques handed over to the petitioner pursuant to the said Undertaking have been dishonoured despite a specific statement that all the Cheques would be honoured. The entire sequence of events, as disclosed hereinabove, does not inspire sufficient confidence in the Court so as to show more leniency to the respondent-Company by granting time. From the material on record, including the affidavit-in-reply filed by the respondent-Company and the consistent failure of the respondent-Company to make good the admitted dues of the petitioner, it is amply evident that the respondent-Company has lost its financial substratum and is unable to pay its debts. M/s. Sparta Cements and Infra Limited , the respondent-Company, is hereby ordered to be woundup. The Official Liquidator attached to this Court is appointed as the Official Liquidator of the respondent-Company and is directed to take over the possession of the entire assets of the respondent-Company, that is, movables, immovables as well as Bank Accounts etc. The Official Liquidator is further directed to take all measures for the winding-up of the respondent-Company as provided under the Companies Act.

Summary

Issues:
Petition for winding-up under Sections 433 and 434 of the Companies Act, 1956 due to unpaid liabilities.

Analysis:
1. Background of the Company: The petitioner sought winding-up of the respondent-Company, formerly known as "Sparta Cements and Infra Limited," due to its failure to discharge liabilities despite name changes and incorporation details.

2. Unpaid Liabilities: The petitioner, engaged in engineering contracts, completed a project for the respondent-Company but faced non-payment for services rendered, leading to outstanding dues amounting to Rs. 3,48,55,560=57 as of 30.04.2010.

3. Legal Actions Taken: The petitioner issued demands, and the respondent-Company issued dishonored cheques as part-payment, leading to pending complaints under Section 138 of the Negotiable Instruments Act, 1881.

4. Acknowledgment of Liability: The respondent-Company admitted its liability in communications and meetings, promising settlement but failed to honor commitments, leading to a statutory notice under Section 434 of the Companies Act.

5. Undertaking and Dishonored Cheques: The respondent-Company provided an undertaking and issued cheques for part-payment, all of which were dishonored by the bank, indicating a failure to fulfill obligations.

6. Court Proceedings: The court deferred publication orders to allow the respondent-Company time to resolve financial issues but ultimately appointed a provisional liquidator due to the respondent's inability to pay debts.

7. Final Order: Despite multiple chances given to the respondent-Company, including opportunities for settlement and deferment of publication orders, the court ordered the winding-up of the respondent-Company, appointing the Official Liquidator to take over its assets and execute the winding-up process as per the Companies Act.

This detailed analysis outlines the sequence of events leading to the court's decision to wind up the respondent-Company due to its failure to pay outstanding dues despite acknowledgments and commitments, ultimately necessitating legal action under the Companies Act.