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2004 (8) TMI 408 - HC - Companies Law

Issues:
Petition for winding up under Companies Act, 1956 based on non-payment of dues.

Analysis:
The petitioner filed a Company Petition under section 434/439 of the Companies Act, 1956 seeking the winding up of the respondent company due to non-payment of dues. The respondent company was appointed as the sole distributor of L.P.G. by another company and appointed the petitioner as a sub-distributor. An agreement was made between the parties for the appointment of dealers in a specific district. The petitioner alleged that despite their efforts, no progress was made in business, leading to the surrender of the distributorship and a request for refund of the deposit and incurred expenses. A settlement was reached between the parties for payment, but the respondent failed to fulfill the agreed terms, leading to repeated reminders and a statutory notice under the Companies Act, 1956.

The respondent company, in its Counter Affidavit, denied any liability towards the petitioner. However, in a subsequent Affidavit, the respondent accepted the liability to pay the petitioner a specific amount with interest. Despite seeking additional time for payment, the respondent failed to fulfill its obligations. The court noted that the respondent's failure to pay despite repeated reminders and a statutory notice indicated an inability to pay its debts as per the provisions of the Companies Act, 1956. Consequently, the court ordered the winding up of the respondent company and appointed the Official Liquidator as the Liquidator to take necessary steps for winding up. The petitioner was directed to follow the relevant rules for winding up proceedings.

In conclusion, the court found the respondent company liable to be wound up due to its failure to pay the outstanding dues to the petitioner, as established by the statutory notice and subsequent actions. The judgment was in favor of the petitioner, leading to the winding up of the respondent company and the appointment of the Official Liquidator to oversee the process.

 

 

 

 

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