2018 (12) TMI 964 - HC - Companies Law

Dissolution of company - possibility to proceed with the winding up for want of fund and assets - Held that - Having heard the learned advocate for the Official Liquidator and on perusal of the record of this Report and in facts of this case and considering the ratio laid down by the Hon ble Apex Court in the case of Meghal Homes Pvt. Ltd. 2007 (8) TMI 447 - SUPREME COURT OF INDIA , the Report deserves to be accepted. The company viz. M/s. Gujarat Taxfeb Private Limited is hereby dissolved under Section 481 of the Companies Act and the Official Liquidator attached to this Court stands discharged and is relieved as liquidator of M/s. Gujarat Taxfeb Private Limited. Accordingly, Report is allowed

Summary

Issues involved:
1. Dissolution of a company under Section 481 of the Companies Act.
2. Appointment of liquidator for winding up a subsidiary company.
3. Lack of assets and funds for winding up proceedings.
4. Communication with authorities like the Income Tax Department and Registrar of Companies.
5. Legal basis for dissolution of the company.

Analysis:
1. The judgment pertains to a petition for the dissolution of a company named M/s. Gujarat Taxfeb Private Limited under Section 481 of the Companies Act. The Official Liquidator, appointed for the company, filed a report seeking the dissolution of the company due to the lack of assets and funds to continue with the winding-up proceedings. The company was a subsidiary of Gujarat State Textile Corporation Limited and was previously ordered to be wound up by the court.

2. The Official Liquidator's report highlighted that the company had no fixed assets, had not engaged in any manufacturing or trading activities, did not have any loans or deposits, and had no cash or bank balance. The directors of the company were identified as IAS officers. The Official Liquidator attempted to take possession of the company's registered office but found it to be rented premises handed over to another entity.

3. The Official Liquidator communicated with authorities like the Income Tax Department and Registrar of Companies, with the former raising no objections to the dissolution. The Official Liquidator relied on the judgment in Meghal Homes Pvt. Ltd vs. Shree Niwas Girni K K Samiti to support the request for dissolution due to the impracticality of continuing the winding-up process without funds or assets.

4. After considering the Official Liquidator's arguments, the court accepted the report and ordered the dissolution of M/s. Gujarat Taxfeb Private Limited under Section 481 of the Companies Act. The Official Liquidator was discharged from their duties concerning this company, with a provision for objections to be raised within two years as per Section 559 of the Act.

Conclusion:
The judgment showcases the legal process and considerations involved in seeking the dissolution of a company under the Companies Act, emphasizing the importance of financial viability and asset considerations in winding-up proceedings.