1963 (1) TMI 29 - HC - Companies Law

Summary

Issues:
1. Challenge to the validity of resolutions for voluntary winding-up of a company.
2. Compliance with the declaration of solvency requirements under the Companies Act, 1956 and Companies (Court) Rules, 1959.
3. Rejection of the declaration of solvency by the Registrar of Companies.
4. Validity of resolutions passed for winding-up and appointment of liquidator and supervisors.

Detailed Analysis:
1. The petition challenges the validity of resolutions passed at an extraordinary general meeting for the voluntary winding-up of a company and the appointment of a voluntary liquidator and a sub-committee to supervise the liquidation process. The primary ground of challenge is the recording of invalid votes, but a more fundamental objection raised by the Registrar of Companies questions the compliance with the declaration of solvency requirements under the law.

2. The judgment delves into the specific provisions of Section 488(2)(b) of the Companies Act, 1956, which mandate that the declaration of solvency must be accompanied by an audit report on the company's profit and loss account, a balance-sheet made as of the latest practicable date before the declaration, and a statement of the company's assets and liabilities as at that date. In this case, the declaration of solvency was made on August 25, 1962, but the audit report and balance-sheet provided were only up to June 30, 1962, which did not align with the statutory requirements.

3. The Registrar of Companies objected to the declaration of solvency on the grounds that it did not meet the requirements of Section 488(2)(b) and Rule 313 of the Companies (Court) Rules. The declaration was not in the prescribed Form 149, as mandated by the rules, and lacked the necessary statement of assets and liabilities. The court found merit in the Registrar's objections, emphasizing the importance of strict compliance with statutory provisions.

4. Consequently, the court declared the resolutions passed for the winding-up of the company and the appointment of the liquidator and supervisors as null and void due to the non-compliance with the declaration of solvency requirements. The Registrar was awarded costs, and no costs were granted to the petitioner as the specific issues raised in the petition were not addressed in the judgment. The judgment underscores the significance of adherence to legal formalities in corporate matters to ensure the validity and legality of actions taken.