Company Liable for Winding Up under Companies Act

The Court found the respondent company liable to be wound up under section 433(b), (c), and (f) of the Companies Act, 1956. The company petition was allowed, and the respondent company was directed to be wound up. The Official Liquidator, previously appointed as the Provisional Liquidator, was now appointed as the Liquidator of the company under section 449.

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Issues:
Company petition filed under section 433(f) read with section 439(6) of the Companies Act, 1956 for winding up the respondent-company due to default in payment to investors and involvement in fraudulent activities. Verification of financial position of the company as on 31-3-2000. Appointment of Official Liquidator and response from Ex-Director regarding winding up.

Analysis:
The company petition was filed by the Registrar of Companies U.P. and Uttaranchal at Kanpur under section 433(f) read with section 439(6) of the Companies Act, 1956. The petition sought to wind up the respondent-company following a report by the Central Bureau of Investigation (CBI) regarding default in payment to investors by the company. The CBI reported cases of cheating, forgery, and fraud against the Director of the company, leading to the recommendation for action under section 26 of the Act. Upon receiving statutory notice and sanction from the Central Government, the Registrar of Companies was authorized to file the winding up petition.

The financial position of the company as on 31-3-2000 was disclosed in the petition, showing liabilities including shareholder funds and current liabilities totaling 22,500.00, and assets such as cash in hand, preliminary expenses, and incidental expenditure. The company petition was duly advertised as per the Companies (Court) Rules, 1959, and the Official Liquidator was appointed as the provisional liquidator. Despite summons being returned due to the absence of the company at the address, notices were published in newspapers and the Official Gazette.

The Official Liquidator submitted a report stating that an Ex-Director of the company had handed over cash and a balance-sheet made as on 31-3-2001. The Ex-Director requested a formal notice for submission of a statement of affairs. In response, the Ex-Director denied involvement with Century Consultant or its Directors, stating no case was registered by the CBI against the company or its Directors. He expressed no objection to the winding up or dissolution of the company.

After considering the investigation by the CBI, notices issued by the Department of Company Affairs, and the absence of objections to published notices, the Court found the respondent company liable to be wound up under section 433(b), (c), and (f) of the Companies Act, 1956. Consequently, the company petition was allowed, and the respondent company was directed to be wound up. The Official Liquidator, previously appointed as the Provisional Liquidator, was now appointed as the Liquidator of the company under section 449.

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