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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 ..... . Consequently, the voluntary winding up proceedings of the Petitioner Company are stayed altogether. The Directors of the Petitioner Company shall be restored with the power of managing the affairs of the Petitioner Company, and the Voluntary Liquidator shall handover the charge of the Petitioner Company to its Directors. The Voluntary Liquidator, Ms. Seema Khanna, stands discharged qua the voluntary winding up proceedings of the Petitioner Company. - CO. PET. 540/2015 - - - Dated:- 21-7-2017 - SIDDHARTH MRIDUL, J. For The Petitioner : Mr. R. Jawahar Lal, Mr. Sanjeev Jain Ms. Naina Duggal JUDGMENT SIDDHARTH MRIDUL, J. 1. The present petition has been filed by Brand Trading (India) Private Limited (hereinafter referred to as Petitioner Company), under the provisions of Sections 466(1) and 518(1) of the Companies Act, 1956 (hereinafter referred to as the Act ) read with Rule 9 of the Companies (Court) Rules, 1959, praying as follows: a) restore the powers to the management of the affairs of the Petitioner to its board of directors; b) permit the Liquidator to handover charge of the Petitioner to the directors and to discharge her fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Rule 315 of the Companies (Court) Rules, 1959. Further, notice under the provisions of Rule 315 of the Companies (Court) Rules, 1959, was published in the Official Gazette on 20.12.2014; and in two newspapers, namely, Business Standard (English) and Business Standard (Hindi) on 26.11.2014. 8. However, subsequent to the appointment of Ms. Seema Khanna as the Voluntary Liquidator, the Board of Directors of the Petitioner Company is stated to have carried out a reassessment of the affairs of the Petitioner Company. As per the reassessment carried out, the Board of Directors is stated to be of the view that continuation of the Petitioner Company would be more advantageous for the Petitioner Company and its members, inter alia , in view of the spurt in the economy. 9. In this view of the matter, the shareholders of the Petitioner Company in their Extraordinary General Meeting held on 23.02.2015, rescinded the earlier resolution dated 17.11.2014 10. Notice in the present petition seeking permanent stay on the voluntary winding up of the Petitioner Company was issued to the Regional Director, Northern Region and to the Official Liquidator, vide order dated 07.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full, within a period of three years from the commencement of winding up. It appears from the Statement of Assets and Liabilities that as on 31.08.2014, the company had estimated values of Assets of ₹ 1,71,70,579/- over total Liabilities of ₹ 25,37,100/-. Thus, having estimated surplus after paying debts of nearly ₹ 1,46, 33,479/-. 6. That the shareholders in an Extraordinary General Meeting (EoGM) held on 17.11.2014 passed resolution for Members' Voluntary Winding Up of the company in terms of provisions of section 484(1) (b) of the Companies Act, 1956. 7. That Smt. Seema Khanna of M/s. Seema Khanna and Associates was appointed Liquidator in the EoGM held on 17.11.2014 and the notice of appointment of liquidator pursuant to section 516 of the Companies Act, 1956 was filed on the MCA - 21 Portal vide form No. 152 on 25.11.2015. 8. That in para 9 of the present petition, the Liquidator has stated inter alia that the Liquidator has not commenced the realization of assets to discharge liabilities; none of the creditors or contributories have been paid any monies out of the assets of the company. 9. That the shareholders, in a subsequent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the money has been retained in the private banking account more than the prescribed period under the provisions of section 552(2) of the Act. Further, the Liquidator has prima facie failed to give any cogent reason for contravention of the provisions of section 552(2) of the Act as the sum and substance of plea, that before she could have opened an account in a Scheduled Bank the members resolved to revive the Company, is not satisfactory as the resolution was passed after about 60 days. 16. That the Ledger Account of the intervening period shows that one of the directors namely Shri T.V. Raj an drew a salary of ₹ 86,074/- each for the month of November, 2014, December, 2014 and ₹ 1,68,891 for the month of January, 2015. 17. That the Liquidator contended inter alia that Shri Ranjan was appointed as the director of the company 18.08.2008. He was employed by the Company at a position equivalent to a Senior Manager by way of an employment agreement dated 01.01.2009 and continued to draw his salary in terms of his employment agreement. 18. That the contention of the Company appears to be satisfactory to the extent that the payment of salary was as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se reply to the RoC Report below and therefore not being repeated below for the sake of brevity. I state that: 2.9.1 Paragraphs No. 1 to 12 of the RoC Report are statements of facts and do not merit any reply. 2.9.2 That at Paragraphs 13 and 14 of the RoC Report, the Registrar of Companies states that the statements submitted by the Company Liquidator revealed that while the intervening period, (i.e. from 17th November 2014 to 23rd February 2015) a sum of ₹ 21,79,303/- was deposited on 22nd December 2014 in the Current Account No. 004605005214 maintained by the Petitioner Company with ICICI Bank Limited. That it is submitted that the amount of ₹ 21,79,303/- credited into the above Bank Account were the maturity proceeds of the fixed deposit created by the Petitioner Company with ICICI Bank Limited prior to commencement of winding up of the affairs of the Petitioner Company. Since the Petitioner Company was still under the discussions of opening a Special Bank Account under Section 553 of the Companies Act, 1956, these proceeds were deposited in the Current Bank Account No. 004605005214 maintained with ICICI Bank Ltd. as per the instructions given at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at similar ex-gratia payments have been paid to Mr. T.V. Rajan in financial year 2013-14 as well. Extracts of the Salary Register for Financial years 2013-14 and 2014-15 and corresponding bank statements of the Petitioner Company evidencing the payment of such ex-gratia payments are annexed and marked as Annexure A-1 . 2.9.5 That Paragraphs 19 and 20 the RoC Report states that in terms of Section 491 of the Companies Act, 1956 all powers of the Board and Managing Director or Wholetime Director and Mangers shall cease, except for the purpose of giving notice of such appointment to the Registrar of Companies in pursuance of Section 493 of the Companies Act, 1956 or insofar as the Company in general meeting or the Liquidator may sanction the continuance thereof. That it has been further stated under Paragraph 20 the RoC Report that the copy of the balance sheet as at 31st March 2015 furnished by the Company Liquidator was signed by Mr. Subhash Chand Nagpal and Mr. T.V. Ranjan as Directors of the Company on 04th September 2015. It has been further stated in the RoC Report that the Company Liquidator has not clarified whether the employment of Mr. T.V. Ranjan and Mr. Subhash Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Tribunal thinks fit. (2) On any application under this section, the Tribunal may, before making an order, require the Official Liquidator to furnish to the Tribunal a report with respect to any facts or matters which are in his opinion relevant to the application. (3) A copy of every order made under 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. xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx 518. Power to apply to Tribunal to have questions determined or powers exercised.-(1) The liquidator or any contributory or creditor may apply to the Tribunal,- (a) to determine any question arising in the winding up of a company; or (b) to exercise, as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the Tribunal might exercise if the company were being wound up by the Tribunal. (2) The liquidator or any creditor or contributory may apply to the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are exercisable while a company is being wound up by the Court, can also be exercised in the course of voluntary winding up. The submission, of the petitioner is emphasised by the terms of Sub-section (5) of this Section, which reads :- A copy of an order staying the proceedings in the winding up made by virtue of this section, shall forth-will 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. Thus, the question for consideration is whether the power to stay the winding up exercisable under Section 466 in relation to companies being wound up by the Court can also be exercised when a company is in voluntary winding up. I find that the position taken up by the petitioner is consistent with a large number of reported case. In Punjab Co-operative Bank, Ltd. Air 1919 Lah 305 (1), it was held under the old Act that the Court could stay a voluntary winding up. In the matter of East India Cotton Mills Ltd. Air 1949, Calcutta 69 (2), S.R. Dass J. (as he then was) examined the principles on which a stay of winding up could be ordered and found that it was ana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness operations of the Petitioner Company. Further, it has been stated that the primary shareholder of the Petitioner Company, Btindia Ltd., holding more than 99% of the share-capital of the former, is willing to support the Petitioner Company once the Petitioner Company revives its business operations. 22. Furthermore, the voluntary winding up of the Petitioner Company being in its initial stage; and in view of the satisfaction accorded by the Official Liquidator and the Registrar of Companies, there appears to be no impediment to allow the relief prayed for by way of the present petition. 23. Consequently, the voluntary winding up proceedings of the Petitioner Company are stayed altogether. The Directors of the Petitioner Company shall be restored with the power of managing the affairs of the Petitioner Company, and the Voluntary Liquidator shall handover the charge of the Petitioner Company to its Directors. The Voluntary Liquidator, Ms. Seema Khanna, stands discharged qua the voluntary winding up proceedings of the Petitioner Company. 24. The order shall be communicated to the Registrar of Companies by the Petitioner Company within 30(thirty) days of its receipt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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