Court orders winding up of indebted company, appoints Official Liquidator as provisional liquidator

The court, upon finding the respondent-company to be indebted and unable to pay its debts, deemed it just and equitable to wind up the company. The Official Liquidator was appointed as the liquidator, with directions to inform the Registrar of companies about the decision. Despite initial willingness to settle, the respondent failed to meet the terms of the settlement, leading to the appointment of the Official Liquidator as the provisional liquidator pending payment. The respondent was given a final opportunity to pay the outstanding amount within a week, failing which the provisional liquidator's appointment would take effect.

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Issues:
Winding up petition under sections 433(e) and 439 of the Companies Act, 1956.

Analysis:
The petition was filed for the winding up of the respondent-company based on its indebtedness and inability to pay debts under sections 433(e) and 439 of the Companies Act, 1956. The court noted the facts leading to the indebtedness of the respondent, finding that it was unable to pay the debts. Citations were published in newspapers as directed by the court. The respondent had initially shown willingness to settle, making payments towards the settlement amount. However, the respondent failed to fulfill the terms of the settlement by not filing the required affidavit and missing the agreed payments. Consequently, the Official Liquidator was appointed as the provisional liquidator by the court. The respondent was given a final opportunity to pay the outstanding amount within a week; failing which, the provisional liquidator's appointment would come into effect.

In the absence of any opposition from the respondent-company or its ex-directors, the court found that the respondent was indeed indebted and unable to pay the debts. Therefore, the court deemed it just and equitable to wind up the respondent-company. As a result, the Official Liquidator was appointed as the liquidator, and no further citations were deemed necessary. The court directed the Official Liquidator to act as the liquidator and instructed to inform the Registrar of companies about the decision.

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