2020 (3) TMI 101 - HC - Companies Law

Winding up of respondent company - HELD THAT - This petition is revived. It is an admitted fact that this company petition was admitted by order dated 28/08/2017 and advertisement with regard to the same was deferred so that chance can be given to the company to pay the dues. Though sufficient time has been granted, respondent company did not comply his statement made in the aforesaid Undertaking and the amount was not paid to the petitioner and hence, the matter was revived as observed in the order dated 11/12/2019. Till date, Undertaking filed by the respondent company is not complied with and not paid the dues to the petitioner. Registry is directed to notify the petition for final hearing on 04/05/2020.

Issues Involved:
1. Petition for winding up under Section 433 r/w 434 of the Companies Act, 1956.
2. Settlement agreement and breach of undertaking by the respondent company.
3. Revival of the company petition due to dishonor of cheques.
4. Appointment of Provisional Liquidator.

Detailed Analysis:

1. Petition for Winding Up:
The petitioner filed a petition under Section 433 read with Section 434 of the Companies Act, 1956, seeking the winding up of Umiya Ceramic Pvt. Ltd. The petitioner requested the court to wind up the company, appoint an Official Liquidator, and restrain the respondent company from alienating its assets. The petition was admitted on 28/08/2017, with the court noting the respondent company's inability to pay its debts, but the order for advertisement was deferred.

2. Settlement Agreement and Breach of Undertaking:
During the pendency of the petition, the parties reached a settlement where the respondent agreed to pay ?70,00,000 as the original amount and ?20,00,000 towards interest in installments. The respondent provided nine postdated cheques to the petitioner. The petitioner agreed to withdraw a criminal case under Section 138 of the N.I. Act upon full payment. However, the respondent company breached the undertaking as the cheques were dishonored due to insufficient funds.

3. Revival of the Company Petition:
Due to the breach of the undertaking and dishonor of the cheques, the petitioner filed Company Application No.12 of 2019 to revive the company petition. The court allowed the revival of the petition on 11/12/2019, noting the respondent's failure to comply with the settlement terms. Despite multiple opportunities and the respondent's assurance to pay the dues, the cheques continued to be dishonored, leading to further court orders emphasizing the respondent's negligence and potential actions under Section 138 of the Negotiable Instruments Act.

4. Appointment of Provisional Liquidator:
Given the continuous breach of the undertaking and non-payment of dues, the court decided to revive the petition and appointed the Official Liquidator as the Provisional Liquidator of the respondent company. The Provisional Liquidator was directed to take over the charge and possession of the company's assets, prepare an inventory of the office premises, books of accounts, and all other assets as required by law. The court also ordered the publication of the petition's admission in widely circulated English and Gujarati newspapers.

Conclusion:
The court's judgment underscores the respondent company's failure to honor its financial commitments and the legal consequences of such breaches. The appointment of a Provisional Liquidator and the revival of the winding-up petition reflect the court's stringent measures to ensure compliance with the law and protect the petitioner's interests.

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