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TMI Blog1978 (3) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... at it was now well known that the company has huge liabilities amounting to rupees six crores which it is entirely unable to meet and there is a scramble amongst its creditors to secure their debts. It is the case that the company has not been able to manufacture any cars for sale to the public which was its primary object and further owing to the commercial insolvency and various other adverse factors (which have not been specified) its business was completely paralysed and is at a standstill. It has been averred that a large number of the workmen and the former employees of the company had left their posts and there was no prospect at all of the business being resuscitated. Lastly, it has been averred that though the company had no liquid assets, it nevertheless possesses enough valuable assets which, if properly disposed of in a fair manner, were expected to be sufficient for payment to all its creditors and leaving a substantial amount available for distribution amongst its contributories. On the grounds aforesaid, it has been prayed that it is just and equitable that the company should be wound up. In the reply dated the 28th June, 1977, filed on behalf of the company, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its allied concerns. The petition at its initial stage was sought to be contested by three shareholders, namely, Mr. R.H. Chaudhry, Mrs. P. Chaudhry and Mr. Kartar Singh. The stand taken on their behalf in their objections dated the 30th of September, 1977, was that in the light of the provisional balance-sheet dated the 31st of March, 1977, the liabilities and the assets of the company were equal. It has then been averred that the project was going ahead and would have started manufacturing the cars within a year and, apart from this manufacture of cars, there were various other objects of the company in the memorandum of association. It has been alleged that the application for the winding up of the company is politically motivated and it was sought to be denied that the business of the company was paralysed before the orders for the appointment of the provisional liquidator were made. It has been stated that the company was carrying on other objects like body building of buses and had large orders to comply with and, apart from this, the company had never thrown open its shares to the public and if this was so done it could yield crores of rupees for running the company. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts dealers and depositors. He further deposed that in April, 1977, the entire work of body building as also the job work in the factory came to a standstill and no fresh orders whatsoever were forthcoming. He was categoric that by May, 1977, the company was not carrying on any work either of body building or of other nature. His stand was that the company was in a state of crisis, and could not survive without substantial funds or additional finance of which there was no likelihood whatsoever from any other source. It was unable to pay even the liability on account of the salaries of the staff which was approximately in the range of Rs. 1,70,000 per month. The witness deposed that the company which was originally floated to manufacture small passenger cars could not make any commercial manufacture or sale of cars at any stage though some proto types, more or less of experimental nature, were only made. Even by 1977, no cars were being manufactured and the project in that context was merely at an experimental stage. He also deposed that the company did not even have adequate funds to commercially manufacture cars or to market them. He stated, however, that the company owned a huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there are grounds for passing the winding-up order?" Herein what first deserves pointed notice is the fact that one of the main objects of the company was the manufacturing of motor cars, automobiles and other mechanical vehicles. This is evident from para III( a )(1) of the memorandum of association of Maruti Ltd. It was averred on behalf of the petitioner that in actual fact the company has not been able to manufacture cars for sale to the public and this stand was in terras admitted on behalf of the respondent-company and indeed does not appear to be otherwise in doubt. P.W. 2, S.M. Rege, the secretary of the company, himself stated on oath that though the company was originally floated to manufacture small passenger cars there was no commercial manufacture or sale of cars at any stage. According to him, the company, which was incorporated in the year 1971, was not manufacturing any cars and the project in that regard is at an experimental stage and some prototypes, more or less of experimental nature, were made. It is thus evident that the very object for which the company was incorporated failed and, therefore, it is right to hold that the substratum of the company has vir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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