9911796707
TMI Blog1972 (9) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... en statement has been filed by the company in which it is admitted that the liabilities of the company exceed its assets but it is vehemently contended that the company is not unable to pay its debts. The following issues were framed : 1.Whether the company is unable to pay its debts and meet its liabilities? 2.Whether the sanction accorded by the Regional Director, Company Law Board, under section 439(5) of the Companies Act is not valid ? 3.Whether it is a fit case for winding-up ? 4.Relief. Issue No. 2 has not been pressed in arguments and is, therefore, decided in favour of the petitioner. Issues Nos. 1 and 3 are interconnected and are, therefore, decided together. On behalf of the petitioner, statement of Kishan Kumar, seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control over the respondent-company because it is a non-banking financing institution but there was no complaint received from the Reserve Bank by the Registrar of Companies. The witness calculated the figures of deficiency from what was stated in the balance-sheets and stated that this deficiency would be there if all the subscribers to the various schemes of the company were to claim back the amount due to them at one time. He further admitted that each subscriber to the lucky scheme or chit fund had to enter into a contract with the company and no subscriber could claim money otherwise than in terms of the contract. As against him, the managing director of the company appeared as R.W. 1 on behalf of the company and stated that the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this evidence it cannot be said that the company is unable to pay its debts and should, therefore, be wound up. In order to determine whether a company is able to pay its debts or not, the first matter to be considered is whether the company is able to meet its liabilities as and when they accrue due. Section 434 of the Companies Act enumerates the eventualities in which the company is to be deemed to be unable to pay its debts and, admittedly, none of those exigencies are found in the present case. It has been admitted by the witness for the petitioner that no complaint from any creditor of the company has been received to the effect that the amount due to him was not paid by the company. The managing director of the company has categori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14,59,260. The matter was examined by Harbans Singh J. (as my Lord the Chief Justice then was), in S . Krishnamurthy, Registrar of Companies, Punjab v. Rohtak Hissar Transport Company (P.) Ltd. [1966] 36 Comp. Cas. 9 (Punj.) and it was held that: "...........the mere fact that the company's assets are less than its liabilities is, by itself, no ground for sending the company to winding-up. The test laid down is that the company should be commercially solvent which means that the company should be in a position to meet its liabilities as and when they arise". In that case, the Registrar of Companies had filed the petition under section 433( e ) of the Companies Act on the ground that the company was unable to pay its debts becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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