2018 (7) TMI 461 - HC - Companies Law

Petition for winding up - Circumstances in which company may be wound up by Tribunal - Held that - The provisions of Section 433(b), (c), (d) and (g) of the Act of 1956 would be attracted in this case and thus, it would be just and proper that the Company is wound up. The fact that the Company has not commenced and has failed to hold the statutory meetings and to deliver statutory reports, is explicit from the record, including the letter dated 18/09/2009 from Eric Sequeira. As noticed earlier, there were only two shareholders/ directors of the Company namely, the petitioner and Shri Eric Sequeira and on the death of Mr. Secqueira, the number of members is reduced below two. Thus, the Company, which is a private limited Company, is liable to be wound up also under Section 433(d) of the Act of 1956. Petition allowed.

Summary

Issues:
1. Petition for winding up of a company under Sections 433, 434, and 439 of the Companies Act, 1956.
2. Retention of the petition by the court based on a previous decision.
3. Company's incorporation details and business activities.
4. Share capital structure and shareholders' information.
5. Allegations of company being defunct and reasons for winding up.
6. Opposing reply filed by the other director.
7. Legal arguments presented by the petitioner's counsel.
8. Analysis of relevant sections of the Companies Act, 1956.
9. Decision on the petition and appointment of the Official Liquidator.

Issue 1: Petition for Winding Up
The judgment pertains to a petition for the winding up of a company under Sections 433, 434, and 439 of the Companies Act, 1956. The petition was admitted on 07/03/2014.

Issue 2: Retention of the Petition
Based on a previous decision in the case of West Hills Realty Private Ltd Vs. Neelkamal Realtors Tower Pvt. Ltd., the court retained the petition as it was deemed not liable to be transferred to the National Company Law Tribunal (NCLT).

Issue 3: Company's Incorporation Details
The company in question was incorporated on 06/10/2006 under the Companies Act, 1956, as a Private Company limited by shares. The registered office of the company is located in Miramar, Panaji, Goa. The company's primary objective was in the business of property and real estate development, acting as contractors, real estate consultants, agents, and investors.

Issue 4: Share Capital Structure
The company had an authorized share capital of 10 Lakhs divided into 1 Lakh equity shares of ?10 each, with a paid-up capital of ?1 Lakh only. The company had two shareholders, each holding five thousand shares since the company's formation.

Issue 5: Allegations of Company Being Defunct
The petitioner alleged that the company had not conducted any business since its inception, failed to hold Annual General Meetings, file audited balance sheets, or comply with formalities due to disputes between the directors. The petitioner claimed that the company was defunct, leading to the petition for winding up.

Issue 6: Opposing Reply
The other director opposed the petition, highlighting the company's financial investments, ongoing litigations, and the responsibility of both directors to fulfill statutory requirements. Allegations of the petitioner suppressing material facts and having unclean hands were made, requesting the petitioner to pay all dues to the company.

Issue 7: Legal Arguments
The petitioner's counsel argued based on evidence, including a letter from the deceased director confirming the lack of business activities and statutory compliance. Reference was made to the company's name being struck off the register under the Companies Act, 2013, but the petition for winding up was deemed maintainable.

Issue 8: Analysis of Relevant Sections
The court analyzed Section 433 of the Companies Act, 1956, which outlines circumstances for winding up a company. Sections 433(b), (c), (d), and (g) were found applicable in this case due to defaults in holding meetings, commencing business, and filing statutory reports, leading to the decision to wind up the company.

Issue 9: Decision and Liquidator Appointment
The court allowed the petition for winding up the company under the Companies Act, 1956, and appointed the Official Liquidator, High Court of Bombay at Goa, to act as the Liquidator. Directions were given for necessary steps to be taken as per the Company (Court) Rules, 1959, and for informing the Registrar of Companies or Official Liquidator about the court's order within 7 days.

This detailed analysis covers the key issues addressed in the judgment regarding the petition for winding up a company under the Companies Act, 1956.