2018 (2) TMI 335 - HC - Companies Law

Dissolution of the company in liquidation under section 481 - Held that - There are no assets and properties of the company in liquidation and only ₹ 12,801/- is in the balance of the company s account, the Official Liquidator shall not be required to do any further act for winding up of the company and therefore the company could be dissolved and the Official Liquidator could be discharged and relieved of his duty to function as liquidator of company in liquidation. In view of the above, the company-M/s.Geeta Fabrics Ltd. (in Liquidation) is ordered to be dissolved under section 481 of the Act. The Official Liquidator shall stand discharged and relieved as liquidator of the company in liquidation. The ex-directors of the company are directed to give undertaking to the Official Liquidator that if any, liability in future arises in connection with the company in liquidation, they shall be responsible. The Official Liquidator shall call for such undertaking of the ex-directors within a period of 15 days from today

Summary

Issues:
1. Dissolution of the company in liquidation under section 481 of the Companies Act, 1956.
2. Payment of professional fee bill to the Chartered Accountant.
3. Transfer of funds to the Company Paid Staff Salary Reserve Fund Account for Central Government fees under Rule 291 of Companies (Court) Rules 1959.

Analysis:
1. The Official Liquidator filed a report seeking the dissolution of the company in liquidation under section 481 of the Companies Act, 1956. The report detailed the confirmation of sale of movables, disbursement of sale proceeds to a secured creditor, filing of Statement of Affairs, and the current fund availability of ?12,801 as of September 2017. The Official Liquidator concluded that dissolution was appropriate as no assets remained, and inviting claims from creditors was unnecessary. The Chartered Accountant certified the fund position and verified the Registrar of Companies' records, fulfilling Rule 281 requirements.

2. The Official Liquidator requested permission to pay a professional fee bill of ?1,500 to the Chartered Accountant, which was supported by the Books of Accounts and the Auditor Balance Certificate. The Court, after considering the report and the Chartered Accountant's findings, agreed that no further winding-up actions were necessary, and the Official Liquidator should be discharged from their duties.

3. The Court ordered the dissolution of the company, M/s. Geeta Fabrics Ltd., under section 481 of the Companies Act, 1956. The Official Liquidator was relieved of their duties, and the ex-directors were directed to provide an undertaking for future liabilities. The Official Liquidator was authorized to pay the professional fee bill and transfer the remaining funds to the Company Paid Staff Salary Reserve Fund Account for Central Government fees under Rule 291 of the Companies (Court) Rules, 1959. The report was disposed of accordingly.

This judgment highlights the process of dissolution of a company in liquidation, the role of the Official Liquidator, certification by the Chartered Accountant, and the Court's decision to discharge the Liquidator and order the company's dissolution based on the lack of remaining assets.