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of <h1>Company Judge orders winding up of respondent-company under Companies Act, appeals dismissed</h1> <h3>MK MAHAJAN & ANR. Versus INDO ROLLHARD INDUST. LTD.</h3> The Company Judge found it just and equitable to wind up the respondent-company under relevant sections of the Companies Act. The Division Bench upheld ... Maintainability of appeal - Winding up of company - Company Judge allowed winding up of company - Division Bench allowed the appeal - However, Division Bench pointed out that in the revision petition that Division Bench had only questioned the procedure adopted by the learned Company Judge in passing a rolled-up order and had even granted liberty to the company to make an application within 7 days for dispensing with the requirement of advertisement of the citation and having regard to the tenor of the judgment of the Division Bench, the setting aside of the entire order of the learned Company Judge was not appropriate and that part of the order of the learned Company Judge admitting the petition for winding up should be sustained - whether the respondent can raise arguments now against the admission of the winding up petition. Held that:- it is not open to the respondent-company to raise arguments now against the admission of the winding up petition. This is because of the order passed by the Division Bench on 5.4.2013 in the review petition No. 116/2013 filed by the petitioners. In this order the Division Bench clarified the final direction contained in paragraph 8 of its earlier order passed on 7th January, 2013 in Company Appeal No. 19/2009. In the order passed on the review petition it was clarified that the objection against the order passed by the learned Company Judge on 16.2.2009 was to the rolled-up procedure adopted by him in discussing the merits of the case and the direction for winding up without advertising the proceedings. It was further clarified that the Division Bench did not comment upon or decide the merits of the observations of the learned Single Judge which 'undoubtedly point to the fact that the winding up petition needed to be admitted'. In this view of the matter, the only modification directed by the Division Bench to its earlier order was to clarify that the judgment dated 16.2.2009 of the Company Judge 'to the extent it records findings - prima facie observations warranting admission of the petition would stand'. The allegation in the present application filed by the respondent-company that the petitioner No.1 made a false statement in the affidavit that he did not sign the board resolution dated 01.10.1999 regarding disposal of Nangloi property appears to me to be an afterthought. The respondent-company states in the application that the petitioner No.1 himself admitted and identified his signature in the board resolution before the ROC on 26.05.2005. If that is so, nothing prevented the respondent-company from raising this point in its counter affidavit dated 13.01.2006 filed in response to the company petition or in its reply affidavit dated 26.09.2006. The allegation in the present application that there were discrepancies in the percentage of the shareholding of the petitioner No.1 in the respondent-company, which is said to be reflected in the order dated 17.10.2011 passed by the disciplinary committee of the ICAI is inconsequential and does not seem to have affected the outcome of the winding-up proceedings nor is it of much relevance to those proceedings. It has made the same or substantially the same allegations which it made in the winding-up proceedings resulting in the admission order passed on 16.02.2009. No such pleas or allegations were made in the appeal filed against the admission order dated 16.02.2009 which appeal in any case was only against the rolled up procedure followed by the learned Company Judge, and which did not question the admission order on merits. The order of the Division Bench dated 05.04.2013 passed in the review petition filed by the petitioners attained finality; this Court clarified that the admission order made by the learned Company Judge would remain undisturbed and it was only the question of appointing the provisional liquidator and advertisement of the winding-up proceedings that will have to be decided by the learned Company Judge. Thus even after the merits of the admission order became final, the respondent-company is making a last ditch or desperate attempt to stall the proceedings by making the present application seeking to enforce the attendance of petitioner No. 1, taking advantage of some orders passed by the disciplinary committee of the ICAI in the case of the petitioner No. 1. Such a conduct on the part of the respondent-company cannot be countenanced - Decided against appellant. Issues Involved:1. Winding up of the respondent-company.2. Validity of the order admitting the winding-up petition.3. Appointment of a provisional liquidator.4. Publication of the citation.5. Allegations of false statements and perjury by the petitioner.6. Maintainability of applications filed by the respondent-company.Detailed Analysis:1. Winding up of the respondent-company:The petitioners filed a winding-up petition (CP No. 136 of 2005) against the respondent-company. The learned Company Judge, after analyzing the facts and records, concluded that it was just and equitable to wind up the company under Sections 433(e), 433(f), and 433(c) read with Sections 434 and 439 of the Companies Act. Consequently, the petition was admitted, and the official liquidator was appointed to take over the company's assets and records.2. Validity of the order admitting the winding-up petition:The respondent-company appealed against the order dated 16.02.2009, which was set aside by the Division Bench on 07.01.2013. The Division Bench remanded the matter for disposal in accordance with law and allowed the company to file an application under Rule 9 within seven days. Upon review, the Division Bench clarified that the objection was to the rolled-up procedure adopted by the learned Company Judge and not the merits of the case. The Division Bench upheld the prima facie observations warranting the admission of the petition.3. Appointment of a provisional liquidator:The petitioners sought the appointment of a provisional liquidator and publication of the citation. The learned Company Judge issued notice on the application and directed the official liquidator to file a status report disclosing the company's funds position. The learned Company Judge stated that the appointment of a provisional liquidator would be considered after the pleadings were complete and both sides were heard.4. Publication of the citation:The petitioners contended that the observations made by the learned Company Judge in the order dated 16.02.2009 were strong enough to justify the publication of the citation. They argued that the company's business had come to a standstill, and the substratum had disappeared without any scheme for revival. The learned Company Judge, however, deferred the decision on the publication of the citation until the completion of the pleadings and hearing both sides.5. Allegations of false statements and perjury by the petitioner:The respondent-company filed an application (CA No. 2160/2013) seeking to bring petitioner No. 1 for cross-examination, alleging that he filed a false affidavit and committed perjury. The respondent-company cited several instances of alleged false statements and inconsistencies in the petitioner's claims. The learned Company Judge, however, found that these allegations were considered and dealt with in the order dated 16.02.2009. The learned Company Judge concluded that the application was an afterthought and filed to delay the proceedings.6. Maintainability of applications filed by the respondent-company:The respondent-company filed applications (CA Nos. 2159 and 2160/2013) seeking to file additional documents and for the attendance of petitioner No. 1 for cross-examination. The learned Company Judge found that the issues raised in these applications were already considered and addressed in the order dated 16.02.2009. The learned Company Judge dismissed these applications in limine, stating that they were filed to prolong the proceedings and that the respondent-company could not re-agitate or reopen the order admitting the winding-up petition.Conclusion:The learned Company Judge concluded that the respondent-company could not raise arguments against the admission of the winding-up petition, as the Division Bench had upheld the prima facie observations warranting the admission. The applications filed by the respondent-company were dismissed in limine. The matter was directed to be listed for further directions regarding the appointment of a provisional liquidator and publication of the citation.
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