Suspension of business: temporary or explainable suspensions do not justify compulsory winding-up; internal remedies must be exhausted first.

Suspension of business justifies winding-up only where it demonstrates no intention to carry on business; temporary or satisfactorily explained suspensions (here caused by requisitioned flats and post-war price rises) do not meet that standard, so winding-up on that ground is rejected. Internal acrimony or dissolution of managing agents warrants winding-up as a just and equitable ground only where no practicable internal or shareholder remedy remains; available extraordinary meetings and appointments indicate remedies remain, so winding-up is rejected. The substratum doctrine applies only when the company's fundamental object is impossible to perform; general memorandum objects and temporary loss of assets do not show substratum gone, so winding-up is rejected on that ground.

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Issues: (i) Whether suspension of the company's business for a whole year under Section 162(iii) of the Indian Companies Act, 1913 justifies compulsory winding-up; (ii) Whether internal deadlock among managing agents/shareholders constitutes a just and equitable ground under Section 162(vi) for winding-up; (iii) Whether the company's substratum is gone so as to justify winding-up under Section 162(vi).

Issue (i): Whether suspension of business for a whole year warrants winding-up under Section 162(iii) of the Indian Companies Act, 1913.

Analysis: The statutory power to wind-up for suspension of business is discretionary and exercised only when suspension indicates an absence of intention to carry on business. Temporary or satisfactorily explained suspensions due to exceptional causes do not establish lack of intention. In the present case the suspension arose from loss of flats requisitioned by government during war and inability to replace them because of price rises, which is a satisfactory temporary explanation.

Conclusion: Winding-up on the ground of suspension under Section 162(iii) is not justified; conclusion against the appellant.

Issue (ii): Whether the existence of acrimony and dissolution of the managing agents' firm establishes a deadlock justifying winding-up under Section 162(vi) as a just and equitable ground.

Analysis: A deadlock warrants winding-up where there is no practicable way to end the state of affairs except by compulsory winding-up, particularly where few interested persons prevent any effective internal remedy. Here, despite bitter differences and dissolution of the managing agents' firm, extraordinary general meetings have taken steps to appoint new managing agents and there are indications that the company's business can be carried on; internal corporate remedies remain available.

Conclusion: The facts do not establish a complete deadlock requiring compulsory winding-up; conclusion against the appellant.

Issue (iii): Whether the company's substratum has gone so that winding-up is warranted under Section 162(vi).

Analysis: The substratum doctrine applies where the company's fundamental object has become impossible (for example, loss of title to a sole mining property or failure to obtain an essential patent). Where the memorandum contains general objects and the business can be pursued by other means or agencies, substratum is not shown to be gone. Here the memorandum contemplates acquisition and employment of vessels and related activities generally; the temporary loss of particular flats does not render the objects impossible.

Conclusion: The substratum is not gone; winding-up on this ground is not justified; conclusion against the appellant.

Final Conclusion: None of the substantive grounds urged for compulsory winding-up (suspension of business, deadlock, substratum gone) are established on the facts; the petition for winding-up was properly dismissed and the appeal is dismissed.

Ratio Decidendi: A court will exercise the discretionary power to wind up for suspension of business only where suspension indicates no intention to carry on business; internal acrimony does not justify winding-up unless no internal or shareholder remedy remains; the substratum doctrine applies only where the company's fundamental object has become impossible to perform.

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