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TMI Blog1960 (9) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... Secondly, it was stated that the substratum of the company had gone completely due to the improper and illegal activities of Shri Ishwar Chander Latka, the nominee of the Managing Agents of the company. (2) The issued and subscribed capital of this company was stated to be ₹ 12 lakhs out of which ₹ 3 lakhs was paid up. By order of this court dated 15th of June 1957 C. O. 41 of 1957, the issued and subscribed capital was reduced and out of the amount of ₹ 3 lakhs a sum of ₹ 2,52,00/- was returned to share-holders in 1957. A number of other allegations were also made but it is not necessary to go into them for purposes of disposal of this petition. In the written statement filed on behalf of the company, the above allegations were denied. It was stated that a licence for forty thousand spindles was secured from the Government of India by the Managing Agents who commanded a great influence in high Government circles and they had placed an order for import of plant and machinery from Japan for setting up a Spinning Mill at Kaithal and that ₹ 50,000.-were advanced to Messrs. Indo-European Machinery Co. (Private) Ltd. for the import of the said plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no business has been or is likely to be commenced, it should pass an order for winding up of the company on the petition of the share-holders. Suspension of a business for a whole year is usually deemed as an indication of absence of intention to carry on the business, unless suspension has been satisfactorily accounted for. This case is not merely one of suspension of business; in fact, there has been no commencement of any business ever since the inception of the company. For reasons to be examined in detail under clause (f) of section 433. I am of the view that the discretionary power of the Court should not be exercised in company's favour. (4) On the ground whether it is just and equitable that the company should be wound up, the following matters deserve notice. R.W. 2 Shri Ishwar Chander Latka has admitted most of the allegations. He does not deny that the licence of the company was revoked in December 1958, by the Central Government and the putting up of a cotton ginning factory was one of the principal objects of this company as also chaff-cutting etc. He admitted that the company had incurred a loss which according to the balance sheet ending 31st March 1958, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y incurred a loss exceeding ₹ 76,000/- and its assets consist of a piece of land on which a few rooms have been built where chaff-cutting machinery of the value of ₹ 6,000/- has been supplied by Hari Krishan Syal and for which the company has not paid so far. It is not possible to accept the ipse dixit of Ishwar Chander Latka (R. W. 2), that the value of the land is ₹ 30,000/- or ₹ 35,000/- nor can any credence be given to the optimistic statement of R. W. 1. Hari Krishan Syal that on an investment of ₹ 8,000/- the company can make ₹ 10,000/- a year. This machinery has been installed during the pendency of these proceedings and probably in order to impress the Court that the company had at last started doing something though not at as ambitions a scale as it had intended, when the Government of India had given it the licence in respect of forty thousand spindles. This company has not chosen to place on the record any statements of its profits and loss after March 1958. Obviously, it had done no business and whatever money it had spent subsequently must have been a dead loss of the company. The main object of the company was to set up a cotton ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociation a very large number of objects for which the company is established. Because these countless possibilities have not been exhausted, it cannot be said, that the management of the company can be allowed to go on speculating, one by one through the endless objects mentioned in the Memorandum on the specious ground that a particular venture is included among the objects. The winding up order cannot be resisted by merely showing that there are large subsidiary powers contained in the Memorandum of the company. Substratum of the company is deemed to be gone when the main object for which the company was formed has become impracticable. (5) My attention has been drawn by the learned counsel for the company to Muralidhar Roy v. Bengal Steamship Co. Ltd. ILR 47 Cal 654: (AIR 1920 Cal 722). In that case the objects of the company according to its Memorandum were inter alia, to carry on business as carries by river. The company had a fleet of two flats and a steamer, constructed for the river for towing the flats. The company was carrying on its business with a steamer and two flats but the flats had been taken up by the Government. In these circumstances, it was held that that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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