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2014 (1) TMI 1476 - HC - Companies LawWinding up of company - Inability to pay debts - Failure to pay the amounts due under the bonds - Held that:- advertisements have been placed in the two local newspapers as well as in the Maharashtra Government Gazette. Furthermore, though the returnable date of hearing the Company Petition was scheduled as 21st October, 2013, in fact, the Company Petition was ultimately taken up by this Court for final hearing only on 11th November, 2013 (i.e. beyond a period of 14 days). Thus the hearing of the Company Petition finally took place more than a month after the advertisement was published in the newspapers and the Maharashtra Government Gazette. No person, creditor or contributory has come forth to oppose or challenge the winding up of the Company. In the facts and circumstances of the case, it cannot be gainsaid that the Company did not have notice of the returnable date of the Company Petition. ZIL and its promoters/director through their decision and announcement dated December 27, 2010 made a promise to the shareholders without intending to perform the same. They diverted the monies realized from the sale of the MSD Division for the benefits/interests of promoters and/or Directors and subsidiaries… I also do not see any compelling reasons to use the monies realized from sale of MSD Division for any purpose – not the least for paying to group entities for various purposes – other than for redemption of FCCBs, which was not only the sole purpose for which approval of shareholders was taken but was also very crucial for protecting the shareholders’ value - prima facie, ZIL and its promoters/directors employed a device or artifice to fraudulently divert the sale proceeds of its MSD Division. Promoters/directors of ZIL have in a devious manner attempted to take away the assets of a listed company directly and indirectly for their own benefit or for benefit of entities owned and controlled by them. Such conduct of promoters/directors not only defeats the whole purpose of seeking shareholders’ approval for crucial decisions but also jeopardizes the integrity of the securities market - Company has failed to rebut the presumption of its insolvency and is therefore liable to be wound up. In the present case where the Company is unable to pay its debts as and when due, has admittedly committed a default in the payment of the amounts due under the 2011 Bond and the 2012 Bonds and is admittedly insolvent, an order for winding up of the Company must follow as a matter of course - it is futile for the Company to distance itself from the actions of the Promoters and Directors who admittedly hold almost 65% of the shareholding of the Company and who have been found by the SEBI and this Court to have diverted large sums of the money realized from the sale of MSD Business to corporate entities situated in Dubai and Singapore. Consequently the illegal and mala fide acts of the Promoters and the Directors of the Company are relevant and material to determine whether to pass an order for winding up of the Company. Administrator receiving claims which along with the claim of the Petitioner exceeds the amount received by way of sale consideration of the sale of the CC Business and the sale of the immovable properties and fixed assets of the Company, then the present order of winding up of the Company shall forthwith be made operative without any further orders and the Official Liquidator shall forthwith take charge of the affairs of the Company. However, if the Petitioner's present claim along with the other claims received can be satisfied from the sale proceeds of the CC Business and the sale proceeds of the immovable properties and fixed assets of the Company, the same shall be disbursed to the Petitioner as well as other creditors to the extent of their claim, and the order of winding up of the Company shall stand set aside and the surplus if any shall be handed over to the Company - Decided in favour of Petitioner.
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