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TMI Blog2017 (7) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... solution passed by the shareholders in their Extraordinary General Meeting held on 23rd February, 2015 rescinding the resolution for voluntary winding up and to commence the business of the Petitioner as well as directing the liquidator to hand over the charge of the Petitioner to its board of directors." 2. The registered office of the Petitioner Company is situated at New Delhi, within the jurisdiction of this Court. 3. The Petitioner Company was originally incorporated under the provisions of the Act on 24.06.2005, under the name and style of Brand Trading (India) Private Limited, with the Registrar of Companies, N.C.T. of Delhi & Haryana at New Delhi. 4. The authorized share capital of the Petitioner Company, as on 31.08.2014 is stated to be Rs. 12,00,00,000/- divided into 1,20,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid-up share capital of the Petitioner Company is stated to be Rs. 10,000,000/- divided into 10,00,000 equity shares of Rs. 10/- each. 5. Copy of the Memorandum of Association and Articles of Association of the Petitioner Company have been filed and are on record. The audited balance sheets of the Petitioner Company as on 31.08.2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief prayed for by way of the present petition. 12. Further, in pursuance to the notice issued in the present petition, the Registrar of Companies, N.C.T. of Delhi and Haryana, has also filed a reply dated 15.01.2016, stating that the Petitioner Company has not filed MGT-14 in respect of the Board resolution passed on 30.10.2014, for voluntary winding up of the Petitioner Company 13. Further, this Court vide order dated 15.01.2016 directed the Registrar of Companies and the Official Liquidator to file a report as regards the affairs of the Petitioner Company, during the period when Ms. Seema Khanna was acting as the Voluntary Liquidator of the Petitioner Company 14. In pursuance to the directions issued by this Court vide said order dated 15.01.2016, the Official Liquidator upon examination of the documents submitted in relation to the affairs of the Petitioner Company by Ms. Seema Khanna, has filed a detailed status report dated 24.02.2016. It has been stated by the Official Liquidator in the said report dated 24.02.2016 that the voluntary winding up of the Petitioner Company is in its initial stage and the Board of Directors had recommended supersession and annulment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities. Furthermore, the majority shareholders of the Company are also willing to support the operation of the Company, if regularized. 11. That the Liquidator has made a statement that during the intervening period, there was no disposal of assets of the Company and neither did it carry out any business activity nor commence realization of Assets to discharge liabilities, if any. In support of such statement, the Liquidator has submitted a copy of Profit 8: Loss Account for the period ending 31.03.2015, Bank Statement of the Company for the period from 17.11.2014 to 23.02.2015 along with Ledger Accounts. 12. That in terms of the provisions of section 553 r /w 554 of the Companies Act, 1956, the Liquidator was to open a special banking account in Scheduled Bank and pay moneys received by her in her capacity into that account and not into any private banking account. 13. That the Bank Statement submitted by the Liquidator reveals that during the period under liquidation, a sum of Rs. 21,79,303/- was deposited in ICICI Bank Limited in the Current Account No. 004605005214 on 22.12.2014. 14. That the Liquidator explained inter alia that the Company was in the process o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor and manager shall cease, except for the purpose of giving notice of such appointment to the Registrar in pursuance of section 493 or insofar as the company in general meeting or the liquidator may sanction the continuance thereof. 20. That the copy of the Balance Sheet as at 31.03.2015 furnished by the Liquidator shows that it was signed by Shri Subhash Chand Nagpal and Shri T.V. Rajan as directors of the company on 04.09.2015. It has nowhere been clarified by the Liquidator if in regard to the continuation of Shri. Rajan and Shri Nagpal's employment during the period the company was in Voluntary Liquidation (17.11.2014 to 23.02.2015), resolutions, if any, of general meeting of the company, were passed or any other permission/sanction was obtained in this regard." 16. In response to the objections raised by the Registrar of Companies, N.C.T. of Delhi and Haryana, in its report dated 29.02.2016, Ms. Seema Khanna, Voluntary Liquidator of the Petitioner Company, has filed an affidavit dated 15.03.2016 on behalf of the Petitioner Company. The relevant portions of the said affidavit dated 15.03.2016, are extracted herein below: "2.8 That it is submitted that the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the provisions of Section 553 of the Companies Act, 1956. While the Petitioner Company and the Company Liquidator had complied with other procedural compliances i.e. newspaper advertisements, publication in the official gazette, the Company Liquidator was in the process of opening a special bank account designated for the purposes specified under Section 553 of the Companies Act, 1956. However, before the procedures for opening a Liquidator's account could be completed, the members of the Company vide their meeting held on 23.02.2015 passed the special resolution for withdrawal of the resolution passed for winding up the affairs of the Company. It is further submitted that the ICICI Bank Account No. 004605005214 was being operated after discussions with the Company Liquidator. As noted in the RoC Report, there maturity proceeds were credited into the Petitioner Company's account in the ordinary course of business. 2.9.4 That under Paragraphs 16, 17 and 18 of the RoC Report, the Registrar of Companies, NCT of Delhi and Haryana has stated that the ledger account of the Petitioner Company shows that one of the Director namely Shri T.V. Rajan drew a salary of Rs. 86, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chand Nagpal, being directors of the Petitioner Company immediately preceding the commencement of winding up of affairs of the Petitioner Company, were authorized to handle the audit of accounts and sign the balance sheet and related documents for the year ending 31st March 2015 on behalf of the Liquidator. That in terms of Section 493 of the Companies Act 1956, the Company Liquidator has the powers to sanction the continuance of certain powers of the board of directors. Therefore, in the instant case, the Company Liquidator had sanctioned certain limited powers to the directors present in India to carry out the day to day activities of the Petitioner Company in consultation with the Company Liquidator. A copy of the above letter of authority is attached hereto and marked as Annexure A-2. It may be noted that such letter has been filed with the Official Liquidator in response to the clarifications sought by the Official Liquidator." 17. In view of the said affidavit dated 15.03.2016, filed on behalf of the Petitioner Company, the objections raised by the Registrar of Companies, N.C.T. of Delhi and Haryana, in its report dated 29.02.2016, stand satisfied. In other words, no furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an order staying the proceedings in the winding up, made by virtue of this section, shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his books relating to the company." 19. In this behalf, in S.P. Sood vs. The Registrar of Companies, Delhi, reported as 1978 (48) CompCas 98 (Delhi), a Coordinate Bench of this Court whilst dealing with the issue as regards the power of the Court to bring a voluntary winding up to an end, observed as follows: "(3) The main controversy in the case turns on whether the Court has power to stay a voluntary winding up. The power of the Court in relation to a winding up order passed by itself is contained in Section 466 of the Companies Act, 1956, which gives power to the Court on an application either of the Official Liquidator or a creditor or a contributory to pass an order staying the proceedings either altogether or for a limited time. If the present winding up was the result of a winding up order passed by the Court, there would be no doubt that the Court would have jurisdiction. For the purposes of submitting that the Court has a similar power in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Limited, (1903) 2 Ch. D 174 In that case, the Court detailed various points for and against ordering a stay of the winding up and decided that there was no ground for staying the winding up on the facts as they were. The Court, however, observed that at a later date, the Official Receiver could report whether all the liabilities and creditors and contributories had been settled and the debts had been paid and whether the members were prepared to reduce their share capital by surrendering and cancelling their bonus shares, then the Court would 'as at present advised be prepared a stay the proceedings in the winding up'. Thus, there is no doubt that the Court does possess the power to stay a winding up even when it is a case of voluntary winding up. There must, however, be facts justifying the stay. The words used in Section 466 are : "on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed." Thus, I have got to find from the facts whether this is a case where the winding up ought to be stayed or whether it is a case where the company should be finally wound up. (Emphasis supplied)" 20. On a conjoint reading of th ..... 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