2018 (2) TMI 1190 - HC - Companies Law

Winding up petition - Power of Registrar to strike defunct company off register - Held that - Just because the name of the company is struck off the register under Section 248 of the Companies Act, 2013, that will not come in the way of the Court to pass an order winding up of company. Therefore, even under the Companies Act, 1956, if the Registrar of Companies was to strike off the name of the company from the register, that would not affect the power of the Court to wind up the company the name of which has been struck off the register. In the circumstances, there is no bar in winding up the company. It should be noted that the company has not filed any affidavit in reply opposing the petition. Therefore, the averments in the petition are not controverted. Even to the statutory notice, no reply has been filed. 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 respondentcompany 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. Thus having heard petitioner and having considered the petition alongwith the documents annexed to the petition, it is satisfied that the company is indebted to petitioner, is unable to discharge its debts, is commercially insolvent and requires to be wound up.

Summary

Issues:
Winding up petition filed against a respondent company for non-payment of debts and commercial insolvency. Whether a company struck off the register can be wound up.

Analysis:
1. The petitioner filed a winding-up petition against the respondent company, Metro Mumbai Infradeveloper Pvt. Ltd., citing non-payment of debts and commercial insolvency. The petitioner was engaged in managing advertisements on BEST TV LED screens in Mumbai under an agreement with the respondent company. Despite several attempts by the petitioner to recover the outstanding amount, the respondent failed to make full payment, leading to the filing of the petition.

2. The respondent company issued multiple cheques towards part payment of the outstanding liability, but many were dishonoured. Despite assurances and promises of payment, the respondent failed to clear the dues, leading to the petitioner issuing a statutory notice as per the Companies Act, 1956. The respondent company did not respond to the statutory notice, further indicating its inability to pay the debts.

3. The court considered the issue of whether a company struck off the register could be wound up. The petitioner's counsel presented a public notice issued by the Registrar of Companies listing struck-off companies, including the respondent. The court examined relevant sections of the Companies Act, 2013, and the Companies Act, 1956, which empower the Registrar to strike off company names but do not bar the court from ordering winding up even if the company is struck off.

4. The court clarified that the striking off a company's name from the register does not prevent the court from issuing a winding-up order. The court highlighted provisions from both the Companies Act, 2013, and the Companies Act, 1956, emphasizing that the court retains the power to wind up a company even if its name has been struck off the register.

5. Considering the lack of response from the respondent company, the court found that the company was indebted to the petitioner, unable to discharge its debts, and commercially insolvent. With no opposition or reply from the respondent, the court relied on the statutory notice and the presumption of inability to pay to grant the winding-up petition.

6. Consequently, the court allowed the winding-up petition, ordering the winding up of the respondent company and appointing the Official Liquidator to take charge of the assets and properties of the company. The Official Liquidator was directed to act promptly without delay, and the company petition was disposed of accordingly.