2016 (12) TMI 1627 - HC - Companies Law

Court dismisses winding up application, grants exemptions, and issues directives for financial transparency.

The court dismissed the application for winding up of the respondent company for non-payment of an amount. An exemption application was allowed subject to ... Winding up petition - non-payment of an amount of ₹ 34,93,918/-, despite service of notice of winding up on the registered office of the respondent-company - Held that:- Upon the petitioner taking all necessary steps for the service of the respondents herein within one week from today, issue notice to the latter to show cause as to why the present company petition be not admitted and the respondent-company be not wound up, returnable on 8th March, 2017. In addition, the Managing Director or in his absence, all the Directors of the respondent company shall file their personal affidavits setting down all information and particulars with regard to their shareholding in the company, their involvement in the affairs of the company and the nature of steps taken by them with regard to the management of the company; The Profit & Loss Account and the Balance Sheets of the Respondent Company for the last three years, The list of the bank accounts of the Respondent Company, other relevant details regarding directors, assets held in the name of all the directors, location of the statutory records and books of account of the company, list of immovable assets, land and building etc. of the respondent company, along with full particulars thereof sufficient to accurately identify and locate the said assets, Details of the debtors and creditors of the company with their complete addresses and respondent company as well as its Directors shall disclose their connection with any other entities whether incorporated or not and the extent of their interest therein, with full particulars. The said affidavits shall be filed within six weeks from today with an advance copy to counsel for the petitioner. In case the said affidavits are not filed for any reason, the concerned Directors, including the Managing Director of the respondent company shall remain personally present in Court on the next date of hearing, in order to enable this Court to examine them, if required, on that date. Issues: Petition seeking winding up of respondent company for non-payment of amount; Application for exemption; Application for stay dismissed; Application for appointment of provisional liquidator dismissed.Analysis:1. Winding Up Petition: The petition under Section 433(e) read with Sections 434 and 439 of the Companies Act, 1956, seeks winding up of the respondent company due to non-payment of an amount of &8377; 34,93,918/-, representing invoices raised by the petitioner for services provided. The petitioner has taken steps for service of notice to the respondents, and the court has directed the respondent company to show cause as to why the petition should not be admitted and the company wound up. The Managing Director and Directors are required to file personal affidavits providing detailed information about shareholding, financial statements, bank accounts, assets, debtors, creditors, employees, and connections with other entities within six weeks.2. Exemption Application: An application for exemption, Co. Appl. No. 4823/2016, has been allowed subject to all just exceptions, and the application is disposed of accordingly.3. Stay Application: Co. Appln. No. 4821/2016 for a stay is not pressed due to the interim order passed in the main petition, and the application is disposed of in terms of the said order.4. Appointment of Provisional Liquidator: Application CO.APPL.4822/2016 for the appointment of a provisional liquidator is dismissed as not pressed at this stage.The court has issued specific directives for the respondent company to comply with, including the submission of detailed affidavits and restrictions on asset disposal. The judgment reflects a comprehensive approach to address the non-payment issue and ensure transparency regarding the company's financial status and operations.