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TMI Blog2010 (1) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany should be wound up. On the other hand it is a fit case to order winding up of the respondent Company. Accordingly, I order winding up of respondent company in accordance with the provisions of the Act read with Companies (Court) Rules, 1959 - COMPANY PETITION NO. 8 OF 2005 - - - Dated:- 6-1-2010 - SHANTANU KEMKAR, J. P.B.S. Nair for the Respondent. ORDER 1. This order shall also govern disposal of Company Petition No. 12/2005 and Company Petition No. 15/2005. 2. This petition has been filed under section 433( e ) of the Companies Act, 1956 (for short the Act ) seeking winding up of the respondent Company. 3. In Company Petition No. 8/2005 averments have been made that the respondent Company is indebted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities of the company far exceeds its assets. It has been averred that the company has lost its commercial substratum in view of Annual Reports of the respondent company for the period 2000 to 2004. 6. The respondent company has filed reply to the petition and denied the averments made in the petition. It has been stated that the prayer for seeking winding up is to exert pressure upon the company to enforce payment of debts. In the additional reply filed by the respondent company, it has been stated, that prior to the filing of the winding up petition talks and negotiations were going on between the petitioner and the respondent company regarding the actual quantum of the liability of respondent company, the mode of repayment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Madhusudan Gordhandas Co. v. Mandhu Woollen Industries (P.) Ltd. AIR 1971 SC 2600. 10. Shri P.B.S. Nair, learned counsel appearing for the respondent company did not dispute the liability of respondent company to pay debts of the petitioner. He however argued that the petitioner is having alternative remedy of approaching the Civil Court for realisation of its dues. According to him, the petition for winding up of the responded Company is not a remedy which can be resorted to as of right. In support, he placed reliance on judgment of this Court in the case of Jagdamba Polymeres Ltd. v. Neo Sack Ltd. [2006] 129 Comp. Cas. 160 (MP) and judgments of the Supreme Court in the cases of Amalgamated Commercial Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to as of right. In other words, it is always regarded as a discretionary remedy. The company court is no bound to entertain the petition for winding up once filed, nor is it bound to allow winding up even if a case to that effect on facts is made out; it being a settled principle of law-relating to winding up that winding up is in the nature of death of a company and puts an end to all its activity for all time to come in future, the court is under legal obligation to see that no running company be pushed into a winding up for one or two defaults. In other words, the effort must be to save the company from being wound up, if the case to that effect is made out on the facts. It is for this purpose and keeping in view this objective, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investments (P.) Ltd. v. 21st Century Constructions (P.) Ltd. [1997] 90 Comp. Cas. 346 . The Andhra Pradesh High Court has declined to order winding up of the respondent company on the ground that the petitioner had the alternative remedy of approaching the Company Law Board either under sections 397 and 398 or section 235 for causing investigation by the Central Government. 13. On a close scrutiny of the law laid down in the aforesaid cases and after going through the pleadings raised by the parties I find in the present case the respondent company did not dispute its liability towards the petitioner to pay the debts. The defence of the Company in the additional reply is that it has all the intentions to repay the undisputed amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lability of alternative remedy. Thus having regard to the financial position of the respondent company as is clear from the Annual reports and the amount of debts, I am of the view that the respondent Company is unable to pay its debts. 14. As regards the contention of the intervener in my considered view for the reasons stated by them in the intervention application the petitioner s prayer for winding up of the company cannot be rejected, more particularly when the interest of interveners can be taken care of at the appropriate stage. 15. In this view of the matter in terms of the provision contained in sections 433( e ) and 434 of the Act and the law laid down by the Supreme Court in the case of Madhusudan Gordhandas Co. ( sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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