2021 (8) TMI 305 - HC - Companies Law

Seeking for an order of winding up of the respondent-company - section 433(e) and (f) of the Companies Act, 1956 - HELD THAT - It is to be noted that the claim as made by the petitioner-company as reflected at annexure G is not controverted. Annexure G is dated July 15, 2009 and the same is issued much earlier to the notice issued by the petitioner-company at annexure J dated April 22, 2010. Annexure G is self-explanatory and balance confirmation by the respondent-company is clear. The said document is not controverted by filing the statement of objections. It is also to be noticed that though the reply notice was made by the respondent-company as per annexure K , there is no reference to the contents of annexure G . Even after the present petition was filed, neither objections have been filed nor any assertions taking away the effect of admission in annexure G has been made. Clearly, the company is unable to pay its debts. The undertaking made before this court and recorded on March 28, 2014 also remains uncomplied. A case is made out for winding up of the company. Another matter to be taken note of is the statement made on behalf of the company that there is no substratum of the company in light of the settlement reached before the Debts Recovery Tribunal and assets have been utilised for such settlement. Such a stand by the company would also make it just and equitable to order for winding up. It is also settled position that demand for setting aside the striking of the company can be made under section 252 of the Companies Act. As pointed out that striking of the name of the company should not come in the way of passing an order of winding up in light of consequences of an order of winding up and the power of the company court in proceedings subsequent to winding up - In fact, even under the provisions of the Companies Act of 1956 under section 560(5) and (6), the power of the court to order for winding up even when the company is struck off from the register was available. Petition disposed off.

Summary

Issues:
Winding up petition under section 433(e) and (f) of the Companies Act, 1956.

Analysis:
The petitioner filed a winding-up petition seeking an order against the respondent-company for being unable to settle outstanding debts. The petitioner provided evidence of the debt through annexure "G," which confirmed the outstanding balance. Despite issuing notices and reminders, the respondent failed to pay the due amount, leading to the initiation of winding-up proceedings. The respondent's reply only contained a bald denial without substantial objections to the debt claims. No objections were filed opposing the petition, and it was admitted on April 21, 2011.

The respondent's counsel admitted the debt during the proceedings but argued against winding up due to ongoing proceedings with Canara Bank and the company's name being struck off the register. However, the court noted that the debt confirmation at annexure "G" was uncontroverted, and the respondent failed to comply with the undertaking made in 2014 to settle the debt. The court found the company unable to pay its debts and justified winding up based on the unfulfilled undertaking and lack of objection to the debt confirmation.

The respondent's contention that the company's name being struck off prevents winding up was rejected. The court cited section 248(8) of the Companies Act, 2013, empowering the Tribunal to order winding up even if the company is struck off. Additionally, under section 252 of the Act, the striking of the company's name does not hinder the winding-up process. Referring to past legal precedents, the court affirmed its authority to order winding up despite the company's name being struck off, emphasizing the consequences of non-payment of debts.

The court ordered the winding up of the respondent-company under sections 433(e) and (f) read with section 439 of the Companies Act, 1956. The official liquidator was appointed to handle the liquidation process, and the winding-up order was to be advertised in newspapers as per the Companies (Court) Rules, 1959. Other connected petitions were disposed of accordingly, allowing similarly placed petitioners to lodge their claims before the official liquidator for adjudication.

In conclusion, the court upheld the winding-up petition due to the respondent's failure to pay the admitted liability, despite objections raised by the respondent's counsel regarding ongoing proceedings and the company's name being struck off the register. The court's decision was based on the company's inability to settle its debts and the legal provisions empowering the court to order winding up in such cases.