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2014 (9) TMI 1291 - HC - Companies LawWinding up of company on the ground of inability to pay debt - sections 433, 434 and 439 of the Companies Act, 1956 - HELD THAT - From the narration of facts, as well as the details coming out from the summary record and proceedings before the B.I.F.R., it becomes crystal clear that the respondent Company has no means or capacity to pay its debt to the petitioner claimed in the present petition. The Company does not have any defence, much less any bona fide defence towards dues. Therefore, a clear situation obtained is that the Company is unable to pay its debt and that it has lost its substratum. Accordingly, the respondent Company- M/s. Skylead Chemicals Limited is liable to be wound up. The petition therefore deserves to be allowed and accordingly, it is allowed. The respondent company- M/s. Skylead Chemicals Limited is hereby ordered to be wound up under the provisions of sections 433, 434 and 439 of the Companies Act, 1956. The Official Liquidator attached to this Court is hereby appointed as Official Liquidator for the said company-M/s. Skylead Chemicals Limited. Petition allowed.
Issues:
Company petition for winding up under sections 433, 434, and 439 of the Companies Act, 1956 due to unpaid debt. Analysis: The petitioner, a chemical company, filed a Company Petition seeking winding up of the respondent company, Skylead Chemicals Ltd., for failure to pay its debt amounting to Rs. 25,12,633/-. Despite statutory notices and reminders, the respondent failed to pay the dues. The respondent also did not respond to the court notice served via registered post. The petitioner contended that the respondent had lost its substratum and was unable to pay its debts, justifying winding up under the Companies Act. The respondent company had developed financial problems and was declared a sick industrial company by the Board for Industrial and Financial Reconstruction (B.I.F.R.). Various proceedings were initiated, including the appointment of the Industrial Development Bank of India (I.D.B.I.) as an operating agency to prepare a revival scheme. However, no viable rehabilitation scheme was submitted, leading to directions for winding up consideration. Efforts for revival, including a proposal from ARVEE Laboratories, did not yield positive results. The B.I.F.R. ultimately ordered the winding-up notice to be kept in abeyance pending further developments. The High Court, after considering the facts and proceedings before the B.I.F.R., concluded that the respondent company lacked the means to pay its debt and had no viable defense. The court found that the respondent had lost its substratum and was unable to pay its dues, justifying the winding up. Consequently, the court ordered the winding up of Skylead Chemicals Ltd. under sections 433, 434, and 439 of the Companies Act, 1956. The Official Liquidator was appointed to take possession of all assets, accounts, and records of the company, and to submit a report within three months. No costs were awarded in the matter.
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