1995 (12) TMI 274 - HC - Companies Law

Company dissolved under Companies Act 1956 due to financial constraints and inability to proceed.

The court granted the application for dissolution under section 481 of the Companies Act, 1956, leading to the dissolution of U.P. Presstressed Company ... Winding up - Dissolution of company Issues:Application for dissolution of a company under section 481 of the Companies Act, 1956 due to inability to proceed with winding up proceedings.Analysis:The official liquidator filed an application under section 481 of the Companies Act, 1956, seeking dissolution of the company U.P. Presstressed Company Ltd. The company, a joint sector company promoted by U.P. Small Industries Corporation (U.P.S.I.C.) and a private entrepreneur, failed to run, leading to a winding-up petition filed by U.P.S.I.C. The official liquidator was appointed, but ex-directors failed to hand over complete records or file a statement of affairs. Subsequently, the official liquidator filed an application for default against ex-directors. Efforts to contact the private entrepreneur, R.K. Kapoor, were unsuccessful. The official liquidator now sought dissolution as winding up proceedings could not proceed.The court noted that eight years had passed since the winding up order. The company had significant debts to U.P.S.I.C., U.P.F.C., and a bank, with legal actions taken by creditors. The company's records were unavailable, and efforts to prepare a statement of affairs failed. The company had a negative balance with no prospect of asset realization. The official liquidator lacked funds to continue winding up proceedings. Considering these circumstances, the court agreed with the official liquidator that dissolution was appropriate.Consequently, the court allowed the application for dissolution under section 481 of the Act, leading to the dissolution of U.P. Presstressed Company Ltd. from the date of the order. Company Application No. 24 of 1992 and Company Petition No. 15 of 1987 were disposed of accordingly.