Court orders winding up of respondent company for non-payment of goods under Companies Act The court allowed the petition under section 433(e) of the Companies Act, ordering the winding up of the respondent company due to non-payment for goods ...
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Court orders winding up of respondent company for non-payment of goods under Companies Act
The court allowed the petition under section 433(e) of the Companies Act, ordering the winding up of the respondent company due to non-payment for goods delivered by the petitioner company. Despite initial promises of partial payment, the respondent failed to fulfill the commitment, leading to the restoration of the company petition. The court rejected the respondent's counsel's retirement memo, considering the admission of debt and dishonor of post-dated cheques. The petitioner was instructed to inform the Registrar of Companies and deposit initial winding up expenses with the Official Liquidator.
Issues: Petition filed under section 433(e) of the Companies Act for winding up the respondent company and appointing the official liquidator.
Analysis: The petitioner company, engaged in making labels as per customers' specifications, delivered goods worth Rs. 1045,671 to the respondent company, which were accepted but not paid for. Despite repeated requests for payment, the respondent delayed and issued dishonored cheques, leading to criminal cases under section 138 of the Negotiable Instruments Act. A statutory notice was served, and the respondent initially promised partial payment but failed to fulfill the commitment, resulting in the restoration of the company petition.
The respondent's counsel filed a memo for retirement, which was rejected by the court. The court noted that the respondent had admitted the debt, and based on joint memos and post-dated cheques, the petition was previously closed. However, as the post-dated cheques were dishonored, the court found it appropriate to allow the petition for winding up the respondent company.
Accordingly, the court allowed the petition, ordering the winding up of the respondent company. The petitioner was directed to inform the Registrar of Companies within 15 days and deposit Rs. 15,000 with the Official Liquidator for initial winding up expenses within four weeks from receiving the order copy.
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