Winding up for failed substratum where prolonged non-commencement, unexplained delay, and no realistic prospect of profit are shown.

A company may be wound up where it has remained inactive for a long period after incorporation, gives no satisfactory explanation for the delay, and shows no realistic prospect of carrying on business profitably. The text treats prolonged non-commencement of business, speculative assertions of future activity without supporting material, absence of reserve and surplus, and recurring early losses as indicators that the company's substratum has failed. On those facts, the just and equitable ground and the ground of inability to commence business were regarded as properly attracted, and the winding-up petition was allowed.

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Issues: Whether the company should be wound up on the grounds that it had not commenced business for a long period, had no satisfactory explanation for the delay, and showed no reasonable prospect of carrying on business at a profit, so as to attract winding up on the grounds of inability to commence business and the just and equitable clause.

Analysis: The company remained inactive for nearly twelve years after incorporation and offered no convincing explanation for the prolonged non-commencement of business. The materials disclosed only speculative hopes of future business, unsupported by any tangible data or evidence despite requisition by the Regional Director. The court also treated the absence of reserve and surplus, recurring losses in the early years, and the inability of the company to show a realistic prospect of profitable business as relevant factors. On these facts, the company's substratum was held to have failed and the discretionary jurisdiction to wind up was found to be properly attracted under the statutory grounds invoked.

Conclusion: The company was liable to be wound up, and the winding-up petition was allowed.

Ratio Decidendi: Where a company has not commenced business for a substantial period, fails to give a satisfactory explanation for the delay, and discloses no reasonable prospect of carrying on business profitably, winding up is justified on the basis that its substratum has failed and the case falls within the just and equitable ground.

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