2015 (4) TMI 197 - HC - Companies Law

Winding up application of company under section 433(e) & (f) - Default in payment of creditors - Held that - This Court while considering the petition for admission on 25.03.2014 had in fact referred to the statement of objections and in that light, having taken note of the position that the respondents had failed to pay the amount despite the admission made, had thought it fit to admit the petition and had directed advertisement. Despite the order of admission and the advertisement being carried out, the respondent has neither paid the amount due to the petitioner nor has any other material been brought on record. In that light, what is also necessary to be noticed is that the respondents in their objection statement have admitted that apart from the petitioner, they are due to several creditors and since they are not in a position to settle with all creditors, the amount due to the petitioner also has not been paid. This would clearly indicate that the respondent is unable to pay its debts and they are liable to be wound up. - Application for winding up allowed.

Summary

Issues: Petition for winding up under section 433(e) and (f) of the Companies Act based on non-payment of dues despite admission by the respondent.

Analysis:
The petitioner filed a petition seeking the winding up of the respondent-company under section 433(e) and (f) of the Companies Act due to non-payment of dues. The petitioner had previously entered into a mutual understanding with the respondent regarding the payment of a balance amount of Rs. 4,75,000, which was due as of a specific date. Despite this understanding, the respondent failed to pay the amount, and as of the date of the statutory notice, the respondent owed Rs. 2,25,000 along with interest to the petitioner. The respondent, in its objection statement, admitted the understanding reached in a previous proceeding and also admitted the balance amount due to the petitioner. The court, after considering the admission made by the respondent and the failure to pay despite the admission, admitted the petition for winding up and directed advertisement. The respondent did not pay the amount due nor provide any additional material to counter the petition.

Furthermore, the respondent admitted in its objection statement that it owed money to several creditors and was unable to settle with all of them, including the petitioner. This admission indicated the respondent's inability to pay its debts, making it liable to be wound up. Consequently, the court allowed the petition, ordered the winding up of the respondent-company, and directed the Official Liquidator to take charge of the assets and proceed further as per the law. The petitioner was instructed to deposit provisional costs with the Official Liquidator, and the advertisement of the petition was to be published in specified newspapers. Additionally, a copy of the order was to be filed with the Registrar of Companies within a specified timeframe.