2018 (8) TMI 1536 - Tri - Companies Law

Winding-up petition - Held that - In the present case it is an accepted position that the Respondent Company has not engaged in the business and also there is a dead lock situation in the Management and further the Company had sold its all assets and also not having any liabilities upon it, hence, in consideration of all the facts and circumstances of this case hereby we record our satisfaction that the prayer by the Petitioner to wound-up the Respondent Company is on just and equitable ground to order the Winding-up of the Respondent Company. We are of the conscientious view that this Petition deserves to be Allowed. Although, U/s. 275 of the Companies Act, 2013 provides that for Winding-up of a Company by the Tribunal, at the time of passing of the Order of Winding-up; the Tribunal shall appoint an Official Liquidator. It has also been inserted in the S. 275(2) the Tribunal can also appoint Insolvency Professional registered under the Insolvency and Bankruptcy Code, 2016. However, U/s. 275(5) a jurisdiction is prescribed that the terms and conditions of appointment of the Provisional Liquidator or Company Liquidator or the fees payable to him shall be fixed on the basis of the task required to perform. Exercising the discretion, we are of the view that it is a fit case that no terms be pronounced for the appointment of Provisional/Official Liquidator. In this case there is no specific task to be performed by the Liquidator because the record of the case as well as the Order of CLB have specifically declared that no Assets or Liabilities are available with the Company which can thus be liquidated easily. Therefore, on just and equitable ground it is also purposeful not to appoint any liquidator. Instead the Petitioner shall furnish the relevant data before the RoC and the RoC shall examine the latest position of the Company. If in the Balance Sheet some changes are recorded, he shall intimate this Bench for requisite directions within 30 Days on receipt of this Order, otherwise the RoC shall dissolve the Respondent Company by Winding-up from its records. After giving the direction on the issue of Assets and Liabilities of the Respondent Company, one more direction is yet to be passed, hence, directions now issued U/s. 274 of the Act that the RoC shall also take due cognizance of the proceedings, if any pending and shall expedite for closure of those proceedings and in case an Order is required by this Bench, can revert back accordingly. Otherwise if satisfied, finalise the process of Winding-up.

Summary

Issues:
1. Winding-up petition filed by Mr. Sumit Gupta against M/s. MOD Serap Industries Private Limited on just and equitable grounds as per Companies Act, 2013.

Detailed Analysis:
The Petitioner, Mr. Sumit Gupta, sought the winding-up of M/s. MOD Serap Industries Private Limited due to a management deadlock and non-compliance with statutory requirements. The Respondent Company, incorporated in 2009, faced issues leading to a lack of business activity. Previous legal proceedings, including a petition for 'Oppression and Mismanagement' in 2011, highlighted the company's non-functioning state. Despite efforts to comply with notices and convene meetings, non-cooperation from other directors hindered statutory compliance. The RoC initiated prosecution proceedings for non-filing of documents, further complicating the situation.

The Petitioner argued that the Respondent Company's affairs were neglected by other directors, leading to non-compliance and statutory actions. Citing a lack of cooperation and a history of non-functioning, the Petitioner deemed it just and equitable to wind up the company under Section 271(e) of the Companies Act, 2013. The Petitioner referenced a Delhi High Court case to support the claim of complete deadlock in the company, justifying the winding-up petition. Despite serving the petition on the RoC, no specific objections were raised by the RoC regarding the petition.

The Tribunal, after reviewing submissions and records, noted the absence of representation from the Respondent Company. The RoC's report did not object to winding-up, primarily mentioning prosecution for non-filing of reports. Past CLB orders indicated the company had sold all assets and settled creditors, leaving no functioning business. The company's lack of accounts, liabilities, or business activities since inception raised concerns. Considering these factors, the Tribunal found the Petitioner's plea for winding-up just and equitable, as the company failed to commence business within a year of incorporation.

In the final decision, the Tribunal ordered the winding-up of the Respondent Company, emphasizing the deadlocked management and lack of assets or liabilities. No liquidator was appointed, as no specific tasks required liquidation. The Petitioner was directed to update the RoC on the company's status, with a 30-day deadline for necessary actions. The RoC was instructed to expedite proceedings and finalize the winding-up process, ensuring compliance with legal requirements.

This detailed analysis of the judgment highlights the key legal arguments, factual background, and the Tribunal's decision regarding the winding-up petition filed by Mr. Sumit Gupta against M/s. MOD Serap Industries Private Limited.