1969 (8) TMI 42 - HC - Companies Law

Summary

Issues:
- Petition to wind up an incorporated company due to non-payment of taxes and penalties.
- Company struck off the register and dissolved under section 560(5) of the Companies Act, 1956.
- Contention on whether a company struck off the register and dissolved can be wound up.
- Interpretation of section 560(5) and (6) of the Companies Act, 1956.
- Comparison with provisions of the Indian Companies Act, 1913, and the English Companies Act of 1948.
- Precedents from Shekh Kaudu v. Berar Ginning Co. Ltd. and Nataraja Textile Mills Ltd. cases.

Analysis:
The judgment pertains to a petition by the Income-tax Officer to wind up a company, Morning Star (Private) Ltd., for non-payment of taxes and penalties. The company had ceased business operations and was struck off the register and dissolved under section 560(5) of the Companies Act, 1956. The key issue was whether a company struck off the register and dissolved could still be wound up. The petitioner argued that clause (b) of the proviso to section 560(5) allowed for the winding up of such companies. The court examined the provisions of section 560(5) and (6) which empower the restoration of a company to the register and the court's jurisdiction to order winding up if necessary.

The judgment referenced the absence of a similar provision in the Indian Companies Act, 1913, and the English Companies Act of 1948, but highlighted the explicit inclusion of clause (b) in section 560(5) of the 1956 Act. Precedents from Shekh Kaudu v. Berar Ginning Co. Ltd. and Nataraja Textile Mills Ltd. cases were cited to support the view that a company can be wound up even after being dissolved due to striking off the register. The court emphasized that the dissolution of a company under section 560(5) did not preclude winding up, as assets and liabilities might still need administration.

The judgment rejected the contention that clause (b) of the proviso only applied to companies struck off the register and not dissolved. It clarified that a company dissolved under section 560(5) was still eligible for winding up under the court's jurisdiction. The court's interpretation emphasized the legislative intent behind the provision and the preservation of the court's power to wind up companies struck off the register. Ultimately, the court ordered the winding up of Morning Star Private Ltd., emphasizing the availability of the remedy to invoke the court's jurisdiction despite the company's dissolution status.