9911796707
TMI Blog2001 (10) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... honourable court to order winding up of the first respondent-company, namely, K.S. Kasimari Ceramique Pvt. Ltd. appoint the official liquidator and distribute its assets and share value to the contributors and creditors and as a partner to allot 60 per cent share to the petitioner by way of intestate succession or 80 per cent share to the petitioner by way of testamentary succession and render justice. 3. C.P. No. 274 of 1998 has been filed by Mrs. Mangala Vijayalakshmi under section 433(f) of the Companies Act, 1956, praying this court to order winding up of the company, K.S. Kasimari Ceramique Pvt. Ltd. at No. 50, Pulla Avenue, Shenoy Nagar, Madras, by the provisional liquidator to take charge of the assets of the company and pass such further or other orders. 4. As all the three company petitions relate to winding up of the same company, namely K.S. Kasimari Ceramique Pvt. Ltd., with the consent of counsel appearing for the petitioner and respondents in the respective company petitions, the three company petitions were consolidated and taken up together for final disposal. 5. All the three company petitions have been filed under section 433(f) of the Companies Act. In C.P. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hilal had purchased 200 shares of Rs. 100 each of the first respondent-company after incorporation. The deceased Shanmugasundaram and the petitioner K.S. Damodaran have been the directors of the first respondent-company from its inception. The first respondent-company, though flourished well at its inception, grew sick and came to a standstill around March, 1976. The immovable properties remained intact and there have not been any tangible creditors till date. Though there is reference to promoting of other partnership firms, such as M/s. Kasimari Auto Products. M/s. Kasimari Machine Tools Company, etc., by the deceased Shanmugasundaram or one or more of his sons, since we are not concerned with those firms, it is not necessary to refer to the same in detail. It would be sufficient to add that there are allegations and counter allegations with respect to those firms as well as the first respondent-company. It is the further case that the late Shanmugasundaram transferred all movables including all machines, lathes and shaping machines from the first respondent-company without any consideration or reward or returns to the new partnership firm where he was also holding 30 per cent s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man had played a fraud on the bank with the collusion of his mother and sister and redeemed the title deeds for his use in his attempt to generate funds for his self-misappropriation. K. Shanmugasundaram passed away on July 24, 1995, and he was cremated by Mothilal in his native place at Arumuganeri village on July 27, 1995. The following are the legal heirs of Shanmugasundaram alias Shanmugasundara Nadar : "1. Paul Thai Shanmugasundaram- 72 years- Widow 2. K.S. Mothilal- 53 years- 1st son 3. K.S. Damodaran- 51 years- 2nd son 4. C. Mangala Vijayalakshmi- 43 years- Daughter 5. K.S. Anantharaman- 41 years- 3rd son." According to the petitioner, being an intestate succession, all the legal heirs are entitled to 1/5th share of the 50 per cent share of Shanmugasundaram in the company with 10 per cent to each legal heir and the remaining 50 per cent owned exclusively by the petitioner, K.S. Damodaran in the first respondent-company. The petitioner claims that he owns 60 per cent share of the total assets of the first respondent-company. 11. It is claimed that the petitioner as the sole surviving director and founder director of the first respondent-company, appointed K.S. Mothilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directors as alleged by Anantharaman. 16. Winding up of the company in terms of section 441(2) shall be admitted to have commenced from the date of presentation of the petition for winding up. C.P. No. 60 of 1996 was presented on March 4, 1996. Further, in terms of section 442, the company Court has the power to stay or restrain the judicial proceedings before any other court. Sections 464 and 465 deal with the appointment and proceedings with the committee of inspection to assist the winding up proceedings. In terms of section 465, all the company's properties vest with the custody of the official liquidator, where a provisional liquidator is appointed or where a winding up order is made. The hearing of C.P. No. 60 of 1996 is being delayed at the instance of the third respondent as he is colluding with other parties by way of secret and unjust enrichment and withdrawing C.P. No. 60 of 1996 or else by neglecting the case. Hence, the present company petition. 17. On April 29, 1996, one S. Shanmugam, an astrologer, resident of No. 9, Govinda Singh Street, Pulianthope, Chennai 12, who was the astrologer for the late Shanmugasundaram, came to the petitioner herein and handed over a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court for declaration of his shares in the first respondent-company and the same is now pending on some technical grounds. The petitioner is the owner of the 50 per cent shares of the share capital in the first respondent-company, which cannot be denied. One Mr. Johnson, son of V. Swamy Nadar is instrumental in abetting K.S. Anantharaman, Mangala Vijayalakshmi and Paulthai to conspire and collude to play a fraud and usurp the company's assets and other valuables. The memorandum and articles of association of the company clearly prove the absence of the name of M/s. Pandian Brick Works. There is no office for the first respondent-company nor has it any staff nor does it incur expenditure or any activity whatsoever for the company except the watchman's salary to safeguard the valuable vacant lands at Maduravoyal and for whom salaries are being disbursed by the petitioner from the first respondent-company's accounts. 19. Even without admitting the claims of shares of the respondents, there should be at least 25,000 shares to repay the initial share capital of Rs. 25 lakhs, each share carrying the value of Rs. 100. But only 20,500 shares have been mentioned. The conspirators have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y landed themselves in Cont. Appln. No. 199 of 1997 and this court ensured the maintenance of status quo at that stage. 22. The third respondent in C.P. No. 60 of 1996 filed his reply during August, 1997, in the said company petition. Paras 24, 25 and 26 are material for the purpose of the present company petition. The hearing of C.P. No. 60 of 1996 is being delayed at the instance of the third respondent, who is the petitioner in C.P. No. 60 of 1996, since he is, with ulterior motives, colluding with other parties for secret, unjust enrichment and is withdrawing C.P. No. 60 of 1996. Hence, the present company petition has been filed for joint hearing of both the petitions. 23. While setting out the above averments, the petitioner had prayed for winding up of the first respondent-company and to distribute its assets and share values to the contributors and creditors and as a part thereof, allot 60 per cent shares to the petitioner by way of intestate succession or 80 per cent share to the petitioner by way of testamentary succession. 24. Pending C.P. No. 199 of 1998, the petitioner herein filed C.A. No. 1033 of 1998 repeating the same averments and the company petition as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state on July 24, 1995, and on his death his shares devolved on his legal heirs, namely, his widow, one daughter and three sons. Though some of the shares were held by some of their nearest relatives, the entire business was carried on only by Shanmugasundara Nadar and other shareholders did not show any interest in the business of the company. The petitioner got married on June 2, 1978. The relationship between the petitioner and her three brothers and mother is not disputed. K.S. Mothilal studied up to S.S.L.C. and was assisting Shanmugasundaram till 1974 and, thereafter, he did not have good terms with his father and worked in various other places. Mothilal was not on talking terms with his father since 1974. The petitioner's second brother, Damodaran, the second respondent in the company petition, an engineering graduate was looking after M/s. K.S. Kasimari Machine Tools established by Shanmugasundaram Nadar, but in due course the second respondent had converted the said business as a proprietary concern and appropriated the same for himself. Since then, the second respondent is not on good terms with the father till his death in 1995. The deceased Shanmugasundaram incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acknowledged receipt of the amounts from M/s. Southern Peninsula Housing Ltd. No amount was brought to the credit of the company nor was used for the discharge of debts due to the Government. Hence, the first respondent-company has to be ordered to be wound up on the ground that it is just and equitable. 30. The company is a private limited company founded on personal relationship involving mutual confidence between the members of the family. The substratum of the company had gone since the main object for which the company was started has become impractical. The company stopped its manufacturing operations and business as early as 1976. Respondent Nos. 2 and 3 refused to co-operate with other directors and have taken an adverse attitude with the intention to appropriate the properties of the company. The petitioner had not received any profit or any amount from the first respondent-company from the date of death of her father. Respondent Nos. 2, 3 and 5 have joined together and are appropriating the profits. 31. The third respondent received huge amounts by way of advance for sale of the properties belonging to the first respondent-company. However, the amount was not brought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The claim of the second respondent that he had nominated the fifth respondent as director without conducting a board meeting and without notice to the other directors and, further, declared himself as the chairman of the company are invalid and illegal. The third respondent instituted the suit O.S. No. 5560 of 1998 on the file of the City Civil Court, Madras, in terms of the resolution, seeking for a relief of declaration and injunction against the second respondent and it is binding. 35. The allegation of collusion of the fifth respondent with the third respondent is denied. It is further stated that the petitioner's counsel agreed to the suggestion made by the Hon'ble judge and also suggested expedient means for settlement. As per the discussions, the petitioner was even ready to accept a slightly lower share whereas the second respondent was not willing for a settlement as his claim was to the extent of 60 to 80 per cent. Hence, the settlement talks failed. The fifth respondent, who desired an amicable settlement, instituted C.P. No. 60 of 1996 on his own so that there could be family peace and harmony. It is incorrect to state that respondent Nos. 3 and 5 are colluding. 36. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The petitioner had already signed the agreements of sale. The petitioner was accompanied by her husband. S. Chandrasekaran, working as Scientific Advisor, has filed the present winding up petition as she could not get the property at No. 50, Pulla Avenue, Shenoy Nagar. It is highly improper for the petitioner to institute a company petition for personal vendetta. 39. After much persuasion only, the third respondent agreed to be the managing director. There was no compelling circumstance for any of the directors such as the petitioner, the third and fourth respondents to subscribe to all the resolutions. The petitioner had voluntarily signed all the 25 agreements for sale. The petitioner's counsel was also present in all these occasions and never was a plea raised at any stage regarding her signature being made under compulsion. Even during the contempt proceedings before the civil court the petitioner has never raised a plea of being compelled to sign any agreement. The petitioner at the behest of her husband is deliberately sabotaging the settlement process by filing the winding up petition and unlawfully retaining the title deeds of Shenoy Nagar property and the 25 agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been lost nor is the company unable to pay its debts. The value of the assets owned by the company is substantial and it is growing day by day. The company has got a rice mill, besides garden land, which is also fetching income. The petitioners attempt to treat the company's assets as their private property is also impermissible in law and such a claim is a misconception. In respect of the will put forward by the petitioner in C.P. No. 199 of 1998, it is contended that the will is not genuine, nor is it true, nor is it binding and it has been brought up at a belated stage. All the averments set out in the company petitions are denied and the petitioner in the respective petition is put to strict proof of the averments. The contesting respondents prayed for dismissal of the company petitions. 44A. Counter of respondent Nos. 1, 2 and 4 in C.P. No. 199 of 1998 : It may not be necessary to set out in detail the counter statement filed on behalf of respondent Nos. 1, 2 and 4 in C.P. No. 199 of 1998 as it is verbatim the same plea in C.P. No. 274 of 1998. 45. Counter of fifth respondent in C.P. No. 199 of 1998 : In C.P. No. 199 of 1998, the fifth respondent, Mrs. Mangala Vija ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company petitions is an abuse of the process ? (6) Whether the petitioner in each of the company petitions has come before this Court with unclean hands ? If so, whether the company petition is liable to be dismissed on that score ? (7) Whether the petitioner in each of the company petitions by their conduct is disentitled to seek for winding up of the company under section 433(f) ? (8) Whether the disputed claims of testamentary succession with respect to the shares left by the late Shanmugasundaram could be the subject-matter of adjudication under sections 433(f ) and 439 of the Companies Act ? (9) What are the rights of the shareholders like the petitioner and contesting respondents in the first respondent-company ? (10) Whether the shareholder could claim any specific share or interest in the property held or owned by the company or seek for partition of the company's assets ? (11) Whether the first respondent-company is liable to be wound up on one or more of the grounds pleaded by the petitioner in the respective company petitions ? (12) To what relief, if any ?" Admittedly, the company was promoted by the late Shanmugasundaram Nadar during his lifetime. Shanmugasund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y are mere shareholders and they cannot claim to be the owners of the property owned or held by the company. In fact, proceedings have been instituted as if the petitioners and contesting respondents are entitled to share in the properties held by the first respondent-company, which is a misconception. Merely because sons, widow and daughter of the late Shanmugasundaram Nadar hold substantial shares, it does not mean they become the owners of the land or the assets of the company. Substantial portion of the case and claim has been made only on that misconception. 49. It is well-settled legal position that there is nothing to warrant for the assumption that a shareholder has any interest in the property of the company, which is a juristic person and which is entirely distinct from the shareholders. The true position of a shareholder is an investor, he will be entitled to participate in the profits of the company in which he holds shares as and when the company declares, subject to the articles of association that the profits or portion thereof should be distributed by way of dividends among the shareholders. That apart, the shareholder has got a further right to participate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble sum or that they are owners of the property of the company. The proper approach to the solution of the question is to concentrate on the plain words of the definition of agricultural income which connects in no uncertain language revenue with the land from which it directly springs and a stray observation in a case which has no bearing upon the present question does not advance the solution of the question. There is nothing in the Indian Law to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company which is a juristic person entirely distinct from the shareholders. The true position of a shareholder is that on buying shares an investor becomes entitled to participate in the profits of the company in which he holds the shares if and when the company declares, subject to the articles of association, that the profits or any portion thereof should be distributed by way of dividends among the shareholders. He has undoubtedly a further right to participate in the assets of the company which would be left over after winding up but not in the assets as a whole. . . . " (p. 5) 52. The same has been followed by a three-judge Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, it cannot be said that the company had lost its substratum. 55. It is sought to be contended that loss of substratum or disappearance of substratum of a company is evident, since the object for which it was incorporated has substantially failed or that it is impossible to carry on the business of the company except at a loss or the existing and possible assets are insufficient to meet the existing liability. This contention is based upon a misconception of the legal position. In Seth Mohan Lal v. Grain Chambers Ltd. [1968] 38 Comp. Cas. 543 (SC), in a case arising out of the 1913 Act, it has been held thus : "Finally, it was urged that by reason of the notification issued by the Central Government, the substratum of the company was destroyed and no business could be carried on by the company thereafter. It was said that all the liquid assets of the company were disposed of and there was no reasonable prospect of the company commencing or carrying on business thereafter. The company was carrying on extensive business in 'futures' in gur, but the company was formed not with the object of carrying on business in 'futures' in gur alone, but in several other commodities as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case and this contention deserves to be rejected. 56. In Madhusudan Gordhandas & Co. v. Madhu Woollen Industries (P.) Ltd. [1972] 42 Comp. Cas. 125 , the Apex Court, while examining the question whether the substratum of the company has gone, held that it is to be alleged and proved as a fact and in that context held thus : ". . . In determining whether or not the substratum of the company has gone, the objects of the company and the case of the company on that question will have to be looked into. In the present case, the company alleged that with the proceeds of sale, the company intended to enter into some other profitable business. The mere fact that the company has suffered trading losses will not destroy its substratum unless there is no reasonable prospect of it ever making a profit in the future, and the court is reluctant to hold that it has no such prospect. . . .The company has not abandoned objects of business. There is no such allegation or proof. It cannot, in the facts and circumstances of the present case, be held that the substratum of the company is gone. . . ." (p.134) 57. The Calcutta High Court in Lokenath Gupta v. Credits Private Ltd. [1968] 38 Comp. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or misconduct on the part of the directors or the managing director, as has been alleged in the instant case, by itself is no ground for winding up (see Lawang Tshang v. Goenka Commercial Bank Ltd. [1961] 31 Comp. Cas. 45 (Cal.), Halsbury's Laws of England (3rd edition) volume 6 page 535, article 1035, Cuthbert Cooper & Sons Ltd., In re [1938] 8 Comp. Cas. 131 (Ch. D.); (Anglo-Continental Produce Co. Ltd., In re [1939] 1 All ER 99). General allegations of oppression of minority shareholders also is not a ground. In the instant case, it has not been alleged that Anand Mohan Gupta and his nominees or supporters are the majority of the shareholders. Such allegations, if any, are contained in paragraph 22 of the said petition. The said paragraph 22 has been verified as submission to this court and cannot be relied upon, in my view, on a question of fact. In the instant case it has not been proved that prejudice is being caused to the company by abuse of majority voting power or that it is impossible for the business of the company to be carried on for the benefit of the company as a whole, in view of the fact that they show the way in which the voting power is held and used. In the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncentrated by the petitioner in both the petitions. In fact, it is to be pointed out that the very relief prayed for in the company petition reads thus : "Winding up of the respondent-company and distribution of its assets and share value to the contributories and creditors and as a part thereof allot 60 per cent share to the petitioner by way of intestate succession or 80 per cent share to the petitioner by way of testamentary succession." 61. In fact in several places the company petition proceeds as if it is a plaint where the plaintiff claims for reliefs of personal nature against the defendant and this would disclose not only the mind of the petitioner, but also their object. That apart, the substantial portion of the averment set out in the company petition relates to personal disputes or disputes among the family members and regarding the will. This is clear from paragraphs 1 to 21 in C.P. No. 199 of 1998 as well as paragraphs 6 to 17 in C.P. No. 274 of 1998. 62. Though it may look incidental, it is the main onslaught by the petitioners that there is an attempt to dispose of all the company's property by entering into an agreement and appropriate it. It is rightly being p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of personal animosity or personal grudge or enmity, each member of the family had nourished against the other both during the lifetime of Shanmugasundaram Nadar and after the lifetime of the promoter, Shanmugasundaram Nadar. Winding up proceedings are not meant for settling personal scores among the family members. The company proceedings cannot be a proceeding for vendatta among the members of the family, though the family may be holding substantial shares and third parties may be minority shareholders and they may not be interested or they may even keep themselves aloof from the disputes. Hence, the points 5 and 6 are answered against the petitioner in both the company petitions. 66. Point Nos. 1 and 2 : Taking up the next question whether it is just and equitable to order winding up of the company, it has to be pointed out that the expression "just and equitable" appearing in section 433( f) is not ejusdem generis with the preceding five clauses in the same section. On a perusal of the pleadings in both the company petitions and the materials placed, this court is at a loss to find that there are no pleadings at all to show that it is just and equitable to order winding up no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for the circumstances in which a company may be wound up by the court. There are six recipes in this section and we are concerned with the sixth, namely, that a company may be wound up by the court if the court is of the opinion that it is just and equitable that the Company should be wound up. Section 222(f) of the English Companies Act, 1948, is in terms identical with the Indian counterpart, section 433(f). It is now well established that, the sixth clause, namely, 'just and equitable' is not to be read as being ejusdem generis with the preceding five clauses. While the five earlier clauses prescribe definite conditions to be fulfilled for the one or the other to be attracted in a given case, the just and equitable clause leaves the entire matter to the wide and wise judicial discretion of the court, the only limitations are the force and content of the words themselves, 'just and equitable'. Since, however, the matter cannot be left so uncertain and indefinite, the courts in England for long have developed a rule derived from the history and extent of the equity jurisdiction itself and also born out of recognition of equitable considerations generally. This is particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he advertisement caused by the said petitioner, K.S. Damodaran, through his advocate Mr. G. Ramalingam, the following is the text : "Notice Please take notice that Mr. K.S. Damodaran is the absolute owner of the land and properties of K.S. Kasimari Ceramique Pvt. Ltd. comprised in Survey Nos. 127, etc., situate at Maduravoyal village, Saidapet Taluk. . . . Except my client, nobody else has got any right, title, interest over the above said properties . . . the public are hereby warned not to deal with any person except my client in respect of the above stated properties." This would show that the petitioner would go to any extent forgetting the fact that he is only a shareholder and the company is the owner of the property and he had mixed up the entire legal position with a view to enrich himself. 68. That apart, the petitioner, K.S. Damodaran had entered into an agreement of sale on March 23, 1996, on behalf of the company with Southern Peninsula Housing Ltd. agreeing to sell 13.77 acres of the company's lands for a consideration of Rs. 3.15 crores after receiving Rs. 10 lakhs as advance. So also the very same petitioner on March 23, 1996, on the same day, has entered into an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent or refute her action in being a party to the resolutions, being a signatory to the 25 sale agreements. Belatedly, the said Ms. Mangala Vijayalakshmi had chosen to suggest for the first time that her signatures were secured by compulsion or force. There is no merit in the said suggestion. To a certain extent, as has been rightly pointed out, Mrs. Mangala Vijayalakshmi, petitioner in C.P. No. 274 of 1998 had been taking not only different but also shifting stands and different attitudes from time to time. In fact, in the Cont. Application No. 199 of 1997, the said Mrs. Mangala Vijayalakshmi had supported the board resolutions and admitted that she had signed the same. Having said so, it is too late in the day for her to plead that her signature had been secured forcibly. In Cont. Application No. 199 of 1997, the very same Mrs. Mangala Vijayalakshmi had filed a counter-affidavit and the material portion reads thus : "I submit that as early as January 12, 1996, the board of directors passed resolution to dispose of excess lands of the company in Maduravoyal on the basis as negotiated by my late father chairman Sri K. Shanmugasundaram Nadar. The board also authorised the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to agitate the same in this winding up proceedings, which is summary in nature. The company court, having summary jurisdiction, will not at all be justified in investigating complex questions of fact, which are to be decided by letting in evidence. Further, suits or other proceedings are pending and this court persuades itself not to enter into these disputes, as it is for the courts having competent jurisdiction to examine these disputed questions of fact. 73. Point No. 1 : Taking up the issue regarding maintainability of the company petition, it is pointed out that the company petitions have been filed invoking section 433(f) of the Companies Act, 1956, namely, winding up the respondent-company as just and equitable. 74. Section 433(f ) provides that a company may be wound up if the court is of the opinion that it is just and equitable that the company should be wound up. In this respect, sub-section (2) of section 443 of the Companies Act provides that where the petition is presented on the ground that it is just and equitable, the court may refuse to make an order of winding up, if it is of the opinion that some other remedy is available to the petitioner and that they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which would show that the said petitioner and one or two of the family members have been treating the company properties as if they are the family properties and that each one of them is entitled to a share. These are the alternative remedies, which the respective petitioners, who had come before this court have already instituted, availed of and which are pending before the competent court. 78. Further, the petitioners in both the company petitions have nowhere pleaded that they have no other alternative remedy other than the present company petition, which is a primordial requirement in a company petition filed under section 433(f). 79. If for any reason the interest of the petitioners as shareholders is affected or prejudiced, under section 397 of the Companies Act, the shareholders could move the Company Law Board. If the board of directors of the first respondent-company act in any manner prejudicial to the company or suppress one set of shareholders, a relief under section 398 is also very much available to them by moving the Company Law Board. The Company Law Board has been conferred with requisite powers under section 402 of the Companies Act. These aspects, in my consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. Again under sections 397 and 398 of the Act, there are preventive provisions in the Act as a safeguard against oppression in management. These provisions also indicate that relief under section 433(f) based on the just and equitable clause is in the nature of a last resort when other remedies are not efficacious enough to protect the general interests of the company. It is necessary to bear in mind that the relief under section 433(f ) is in the nature of a last resort, thus obliging the court to give relief to the party when moved under the section only under compelling circumstances." (p. 723) This court is in respectful agreement with the above two pronouncements and the same squarely apply to the facts of the present winding up petitions. 82. In V.V. Projects & Investments (P.) Ltd. v. 21st Century Constructions (P.) Ltd. [1997] 90 Comp. Cas. 346 , the Andhra Pradesh High Court had occasion to consider the scope of section 433(f) and held that an alternative remedy of approaching the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only of a just and equitable ground for so doing but also that there is no alternative remedy open to the petitioner, that this is because if such a petition is admitted and there is a public advertisement it could cause irreparable harm to a solvent company even if the company succeeds ultimately. The next decision is Jose J. Kadavil v. Malabar Industrial Co. Ltd. [1986] 59 Comp. Cas. 969 (Ker.). There it was held that the court can refuse to make an order of winding up, if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing the other remedy. The court, while interpreting section 433(f) of the Act, held that there is no restriction or limitation to the effect that an order under section 433, sub-section (2), can be made only after taking evidence at the time of the enquiry or at the conclusion of the enquiry. As against these authorities, Mr. S. Ravi, learned counsel for the petitioner, has relied on a Division Bench decision of the Bombay High Court in Jeeva Bai Munga Bai Patel v. Extrusion Processes (P.) Ltd. [1966] 2 Comp. LJ. 74. But, neither the said repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely, the family members of the promoter the late Shanmugasundaram Nadar, had attempted to divide the company property and as to how the arrangement is sought to be entered into and this will show not only the approach, but also the mind of the said petitioner and others who support him. It is only the board that has the power to sell and not the individual directors, much less, treating it to be their property or property of their own. 86. In the circumstances, on a consideration of the entire matter, this court holds that there are no merits and all the company petitions deserve to be dismissed. In the light of the above discussions, the points are answered as hereunder : "(a)On the first point, this Court holds that C.P. No. 199 of 1998 and C.P. No. 274 of 1998 filed under section 433(f) seeking for winding up of K.S. Kasimari Ceramique Pvt. Ltd. as just and equitable are not maintainable. (b)On the second point, this court holds that section 443(2) is a bar with respect to both the company petitions. (c)On the third point, this court holds that the substratum of the first respondent-company has not been lost. (d)On the fourth point, this court holds that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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