2010 (9) TMI 926 - HC - Companies Law

Court Revives Winding-Up Petition Post BIFR Referral

MAN Takraf (India) (P.) Ltd. Versus Bellary Steels & Alloys Ltd.

The court granted a stay on winding-up proceedings due to a reference to the BIFR. Subsequently, the company petitions were dismissed but allowed revival ... Winding up petition - Held that:- From the admission of the respondent-company it is clear that they failed to pay the outstanding dues to the petitioner. Despite the statutory notice the respondent-company failed to pay the outstanding dues. Therefore, the respondent-company is deemed to have failed to pay the debt payable to the petitioner-company. The petition is hereby allowed.The respondent company is ordered to be wound up.The petitioner is directed to deposit a sum of ₹ 25,000 with the Official Liquidator to meet the initial expenses of the winding up proceedings.The petitioner is directed to serve a copy of this order on the Registrar of Companies within 30 days.The petitioner is further directed to take out advertisement of this order in English daily ‘THE HINDU’ within 14 days from the date of receipt of copy of this order. Issues:- Application for winding up of respondent-Company- Stay of proceedings due to reference made to BIFR- Dismissal of company petitions for winding up- Application for revival of company petition- Failure of respondent-Company to pay outstanding dues- Admission of liability by respondent-Company- Order for winding up of respondent-CompanyAnalysis:1. The petitioner-Company filed a petition for winding up the respondent-Company and sought the appointment of the Official Liquidator. However, during the proceedings, the respondent-Company requested a stay based on a reference to the BIFR. The court granted the stay, suspending the proceedings until the BIFR's decision under the Sick Industrial Companies (Special Provisions) Act, 1985.2. Subsequently, multiple company petitions, including the one in question, were dismissed by a common order. The court allowed the petitioners the liberty to revive the petitions if the company emerged from the BIFR proceedings. The court preserved the petitions for a specified period to facilitate revival in case of the company's recovery.3. The petitioner-Company later filed an application to revive the winding-up petition, citing the abatement of proceedings before the BIFR. Despite the respondent-Company's refusal to accept the notice, the court deemed the service as sufficient. Upon submission of BIFR's order stating the abatement of the reference, the court recalled its previous order and restored the company petition for winding up.4. The court examined the history of transactions between the parties, highlighting the outstanding dues of the respondent-Company to the petitioner-Company. Despite admissions of liability and promises to pay, the respondent-Company failed to clear the dues, leading to the petitioner's petition for winding up based on non-payment of debts.5. Based on the evidence of non-payment and admission of liability by the respondent-Company, the court found the respondent in default of paying the debt to the petitioner. The court had previously admitted the winding-up petition and directed necessary advertisements, with no opposition received during the proceedings.6. Consequently, the court allowed the petition, ordering the winding up of the respondent-Company. The petitioner was directed to deposit a sum for initial expenses, serve a copy of the order on the Registrar of Companies, and publish the order in a specified newspaper within a designated timeframe to comply with the winding-up process.