2011 (8) TMI 963 - HC - Companies Law

Winding up - company unable to pay its debt creditors advanced loan to company in repayment company handed over to the creditor cheques all the cheques were dishonored Held that there was sharp decline in the sales of company company has no defence to the claim of the petitioning creditor. Winding up petition allowed

Summary

Issues:
1. Unpaid loans by the company to the petitioning creditor.
2. Defence raised by the company related to avian flu outbreak.
3. Orders passed by the court regarding winding up applications.

Analysis:
1. The petitioning creditor, ICICI Bank Limited, filed a winding-up application against the company due to substantial unpaid sums lent since 2002, amounting to over Rs. 17 crores. Another petition by M/s. G.S. Atwal & Co. (Engineers) P. Ltd. claimed Rs. 60 lakhs owed by the company. The company failed to respond adequately to the statutory notices, leading to the winding-up applications.

2. The company defended itself by citing the avian flu outbreak in West Bengal in 2008, affecting its poultry business. The company argued that the reduced sales were due to the flu outbreak, impacting its ability to repay the debts. However, the court found this defense insufficient, stating that external factors do not absolve a company from its financial obligations.

3. The court issued various orders, including appointing the Official Liquidator as Provisional Liquidator to take possession of the company's assets. Despite the company's attempts to make partial payments during the proceedings, the court found no valid defense for the outstanding debts. Consequently, the court ordered the winding up of the company, directing the Official Liquidator to take physical possession of all assets, but granted a two-week period for the company to appeal the decision before enforcement.

This detailed analysis covers the key issues of unpaid loans, the company's defense related to the avian flu outbreak, and the court's orders regarding the winding-up applications, providing a comprehensive understanding of the judgment.