2024 (7) TMI 1466 - HC - Companies Law

Seeking dissolution of the respondent/company - Section 481 of the Companies Act, 1956 - HELD THAT - This Court is of the opinion that these liquidation proceedings warrant a quietus, and the company (in liquidation) should be dissolved as the Official Liquidator cannot proceed any further with the winding up process. Relying on the decision of the Supreme Court in Meghal Homes 2007 (8) TMI 447 - SUPREME COURT as also the import of Section 481 (1) of the Act, besides the facts and circumstances of the present case, these liquidation proceedings warrant to be brought to an end. The company (in liquidation) M/s. ARC Cement Ltd., stands dissolved and the Official Liquidator is hereby discharged as its Liquidator - the present application is allowed.

Summary

Issues:
1. Application for dissolution of the respondent company under Section 481 of the Companies Act, 1956.
2. Examination of the winding-up process and disbursement of funds to creditors and workers.
3. Evaluation of the current financial position of the company in liquidation.
4. Consideration of whether the company should be dissolved based on the circumstances and legal provisions.

Analysis:
The judgment pertains to an application for dissolution of a company (in liquidation) under Section 481 of the Companies Act, 1956. The Official Liquidator filed the application seeking the dissolution of M/s. ARC Cement Ltd. and discharge as its Liquidator. The company was ordered to be wound up in 2000, and the Official Liquidator was appointed to take charge of its assets and records. The Directors of the company were identified, and the status of the registered office was examined, revealing that the company was not operational from the premises. The factory premises were taken over and assets were sold, with disbursements made to workers and creditors as per court orders.

The judgment highlights the disbursements made by the Official Liquidator to workers and creditors of the company in liquidation, along with the current financial position indicating insufficient funds to cover liquidation expenses. The Court, after considering the facts and circumstances, references the Supreme Court decision in Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti & Ors., emphasizing that when the winding up process cannot proceed due to lack of funds or other reasons, the company can be dissolved. Section 481 of the Companies Act, 1956 is also cited, providing for the dissolution of a company in such circumstances.

Based on the legal provisions, the Supreme Court decision, and the specific facts of the case, the Court concludes that the liquidation proceedings should be terminated. The company, M/s. ARC Cement Ltd., is dissolved, and the Official Liquidator is discharged from the role. The Official Liquidator is directed to transfer any available balance to the Common Pool Fund and close the company's books of accounts. The Registrar of Companies is to be informed of the judgment within 30 days, and the company petition and related applications are disposed of. The next hearing date is canceled in light of the judgment.