2013 (9) TMI 1308 - HC - Companies Law

Provisional Liquidator Appointed Over Debt Issues; Respondent's Objections Dismissed Due to Insufficient Repayment Efforts.

Shahi Exports Pvt. Ltd. & Another Versus CMD Buildtech Pvt. Ltd.

The Co. petition was admitted, rejecting the respondent's objections. The court appointed the Official Liquidator as the Provisional Liquidator due to the ... - Issues:1. Maintainability of the company petition and appointment of provisional liquidator.2. Validity of objections raised by the respondent.3. Justification for the appointment of a provisional liquidator.4. Appointment and duties of the Provisional Liquidator.5. Compliance requirements for the Directors of the Respondent.Analysis:1. The judgment addresses the maintainability of the company petition and the request for the appointment of a provisional liquidator. The respondent's objections were rejected, and the company petition was admitted. The petitioner sought the winding-up of the company based on the respondent's inability to pay debts, supported by legal precedent.2. The respondent contended that the petition was a pressure tactic and raised objections regarding the loan source and limitation. However, the court found no merit in the objections, citing previous orders that addressed these issues. The respondent's defense was deemed substantial, and the appointment of a provisional liquidator was opposed.3. The court examined the conduct of the respondent, noting a lack of repayment efforts despite assurances. Various proposals and adjournments were made by the respondent but failed to materialize. The court concluded that the respondent's conduct demonstrated an inability to pay debts, justifying the appointment of a provisional liquidator.4. The Official Liquidator was appointed as the Provisional Liquidator of the Respondent, tasked with taking over assets, records, and preparing an inventory. The Provisional Liquidator was authorized to seek assistance, including from police authorities if necessary. Publication of the petition's citation and compliance requirements for the Directors were also outlined.5. The Directors of the Respondent were directed to comply with specific requirements under the Companies Act and Rules, including submitting a statement of affairs and asset details. They were instructed to provide necessary financial documents and contact information to the Official Liquidator. A report was to be filed before the next hearing date for further proceedings.This detailed judgment highlights the legal considerations surrounding the appointment of a provisional liquidator, addressing objections, compliance requirements, and the rationale behind the court's decision based on the respondent's conduct and legal precedents.