2023 (3) TMI 302 - HC - Companies Law

Dissolution of the company - discharge of dues of OL, as the Liquidator - HELD THAT - It has been stated that since the funds available in the account of the Company (In Liqn.) were insufficient, therefore, the unsecured creditors had been paid on pro-rata basis and after the deduction of the liquidation expenses of Rs.12,98,918.58/-, the fund position of the Company (In Liqn.) as on date is NIL. It is stated that the OL has no further assets, either moveable or immoveable, from which any money may be realized for the Company (In Liqn.) and, therefore, no useful purpose would be served by keeping this matter pending. The liquidation proceedings deserve to be brought to an end. Consequently, the Company (In Liqn.) is dissolved.

Summary

Issues Involved:
1. Application for dissolution of a company under Section 481 of the Companies Act, 1956.
2. Failure to file Statement of Affairs by ex-directors.
3. Scrutiny and disbursement of claims from creditors.
4. Insufficient funds and closure of the liquidation process.

Issue 1: Application for Dissolution
The Official Liquidator (OL) filed an application under Section 481 of the Companies Act, 1956, seeking the dissolution of the company and discharge as the Liquidator. The company was initially ordered to be wound up in 2005, and the OL had taken over the factory and auctioned its assets. The OL faced challenges in taking possession of the registered office due to relocation issues.

Issue 2: Failure to File Statement of Affairs
The ex-directors of the company failed to file the Statement of Affairs as required under Section 454 of the Act. Consequently, the OL initiated legal action against them, resulting in some being declared proclaimed offenders, one deleted from the proceedings, and one passing away during the proceedings. The OL's criminal complaint against the ex-directors was disposed of by the court.

Issue 3: Scrutiny and Disbursement of Claims
Claims from various creditors, including EPFO, secured creditors, workmen, and unsecured creditors, were invited and scrutinized. The OL disbursed the admitted amounts to the creditors based on the scrutiny results. The disbursement details were provided in a table format, outlining the amounts claimed, admitted, and disbursed to each category of creditors.

Issue 4: Insufficient Funds and Closure of Liquidation
Due to insufficient funds in the company's account, unsecured creditors were paid on a pro-rata basis. After deducting liquidation expenses, the company's fund position was reported as NIL. The OL confirmed the lack of further assets for realization. Citing a Supreme Court decision in Meghal Homes (P) Ltd v. Shree Niwas Girni K.K. Samiti, the court ordered the dissolution of the company, allowing the OL to close the Books of Account and discharge from the proceedings.

This detailed analysis covers the key issues addressed in the judgment, including the application for dissolution, failure to file statements, scrutiny of creditor claims, and the closure of the liquidation process based on legal provisions and court decisions.