9911796707
TMI Blog1981 (3) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Ltd., the company in liquidation, was occupying a portion of the building under M/s. Punjab Exchange Ltd. According to M/s. Punjab Exchange Ltd. (hereinafter referred to as "the petitioner") the said company owed money by way of licence fee and damage. A winding-up petition was filed on 22nd February, 1975, being C.P. No. 23 of 1975. Two grounds were taken in the petition. The first ground was that the company was unable to pay its debt and the second ground was that it had ceased to do business. By order dated 23rd April, 1980, this court held that the company was unable to pay its debts and was commercially insolvent. The court also held that the company had suspended its business and, therefore, must be wound up on this ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 391(1), with which we are concerned in this case, reads as under: "391. Power to compromise or make arrangements with creditors and members. (1) Where a compromise or arrangement is proposed ( a )between a company and its creditors or any class of them; or ( b )between a company and its members or any class of them: the court may, on the application of the company or of any creditor or member of the company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of class of members, as the case may be, to be called, held and conducted in such manner as the court directs." The submission of Mr. Daljit Singh is that the applicant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of section 428 of the Act every member would become a contributory. The converse, however, is not true. Though a member of a company, even of fully paid up shares, would become a contributory by virtue of section 428, on his death his legal representatives, by virtue of section 430, would be regarded as contributories. The said legal representatives, however, would not be regarded as members unless and until their names are put in the register of members. No provision of the Act has been shown to me wherein it is provided that a member shall cease to be a member after the winding-up order has been passed. After the passing of the winding-up order the register of members would come into the custody of the official liquidator. The na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. I am of the opinion that the contention raised by Mr. Daljit Singh, though very interesting, is not well founded. As already observed a member would still be a member of the company, notwithstanding the winding-up order having been passed, and even under the different provisions of the Companies Act a reference is made to members even though a winding-up order has been passed. (See sections 469(2) and 511). Even though the applicant is entitled to file the application, the next question which would arise for consideration is as to whether the winding-up order should be stayed and whether a scheme should be put to the creditors of the company. Unless and until the winding-up order is stayed no useful purpose would be served in a meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... winding-up order what would be its effect? The obvious effect would be that the company would revive and would be entitled to carry on its business. It is, however, an admitted case of the parties that at the present moment the objects of the company do not permit the company to carry on any business activity. The only object of the company is to carry on forward trading. The carrying on of forward trading is illegal. I do not think a court would be justified in reviving a company whose object is to carry on an illegal activity. It is represented by Mr. Satish Chandra, and an affidavit to this effect has also been filed, that if the stay order is granted the memorandum of the company would be amended by taking appropriate proceedings under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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