Tribunal Orders Winding Up of Company, Appoints Liquidator, and Discharges Officers

The Tribunal allowed the Company Petition, ordering the winding up of the company due to the complete loss of its substratum and the inability to restart business activities. Ms. Chhaya Gupta was appointed as the Company Liquidator with directions to provide an exit option to public shareholders, comply with SEBI regulations, and constitute a winding-up committee. No legal proceedings could commence against the company without the Tribunal's leave. The order also discharged the company's officers, employees, and workmen, who were instructed to cooperate with the Liquidator.

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Issues Involved:
1. Winding up of the company on just and equitable grounds.
2. Compliance with SEBI regulations and delisting requirements.
3. Financial status and liabilities of the company.
4. Non-compliance with statutory filings and tax obligations.
5. Appointment of Company Liquidator and related directions.

Issue-wise Detailed Analysis:

1. Winding up of the company on just and equitable grounds:
The petition was filed under Section 271(e) read with Section 272(1)(b) of the Companies Act, 2013, seeking the winding up of the company on the grounds that the substratum of the company has been completely lost. The company, incorporated in 1974, had ceased all commercial activities since April 2011 due to actions taken under the SARFAESI Act by Asset Reconstruction Companies, which led to the sealing of production facilities. The company had no turnover from business operations in the financial years 2016-17 and 2017-18 and faced recurring expenses and substantial losses.

2. Compliance with SEBI regulations and delisting requirements:
SEBI submitted that the company, listed on the Bombay Stock Exchange, must comply with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, and other relevant regulations before winding up. SEBI highlighted that trading in the company's securities had been suspended due to non-compliance with Regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018. SEBI also noted that the company might be compulsorily delisted, and the directors and promoters could be barred from accessing the securities market for ten years.

3. Financial status and liabilities of the company:
The company had accumulated losses of Rs. 36,14,14,127 as of March 31, 2017, and further losses in the subsequent financial year. The company had current liabilities totaling Rs. 32,40,70,067 as of March 31, 2017, with assets insufficient to settle these liabilities. The company's balance sheet reflected a negative net worth, and there was no reasonable hope for restarting business activities.

4. Non-compliance with statutory filings and tax obligations:
The company failed to file statutory returns under various laws, including Income Tax, Commercial Tax, and Service Tax, due to the cessation of business activities. The Commercial Tax Department had canceled the company's registration and took notional possession of its fixed assets to recover outstanding dues.

5. Appointment of Company Liquidator and related directions:
The Tribunal ordered the winding up of the company under Section 273 read with Section 271(e) of the Companies Act, 2013. Ms. Chhaya Gupta was appointed as the Company Liquidator to conduct the proceedings. The Liquidator was directed to provide an exit option to public shareholders after realizing the company's assets and to comply with SEBI regulations. The Tribunal also directed the Liquidator to file an application for constituting a winding-up committee and stated that no legal proceedings could commence or continue against the company without the Tribunal's leave. The order also served as a notice of discharge to the company's officers, employees, and workmen, who were required to cooperate with the Liquidator.

Conclusion:
The Tribunal allowed the Company Petition, ordering the winding up of the company due to the complete loss of its substratum and the inability to restart business activities. The Tribunal provided detailed directions for the appointment and duties of the Company Liquidator and emphasized compliance with SEBI regulations. The Registry was directed to send a copy of the order to the concerned RoC and the Company Liquidator within seven days.

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