2013 (12) TMI 1755 - HC - Companies Law

Summary

Issues:
Petition for winding up under Sections 433 and 434 of the Companies Act, 1956 - Non-payment of agreed salary to the petitioner by the respondent-Company - Dispute over salary amount and performance issues - Failure of respondent-Company to respond to statutory notice - Appointment of Official Liquidator - Company shown as dormant - Admission of petitioner's dues by respondent-Company.

Analysis:
The petitioner filed a petition seeking winding up of the respondent-Company, "Mynet Internet Services Limited," under Sections 433 and 434 of the Companies Act, 1956, due to non-payment of the agreed salary. The petitioner was appointed as Chief Executive Officer with a fixed remuneration, including equity shares. Initially, the petitioner was paid as per the agreement, but the respondent-Company stopped payment after February 2002, leading to the petitioner issuing a statutory notice in July 2002. The respondent-Company contended that the petitioner failed to bring necessary business, causing substantial losses, and denied the petitioner's claim for damages amounting to Rs. 18 lacs.

The Court noted attempts to resolve the matter before admission and subsequent publication of the petition. Despite various hearings and notices, the respondent-Company failed to respond adequately, with doubts raised about the company's address and status. The Court appointed the Official Liquidator after considering the petitioner's submissions, including the respondent-Company's admission of the petitioner's entitlement to a salary of Rs. 1.03 lacs per month. The Court found the respondent-Company to be non-responsive, lacking commercial viability, and unable to pay the petitioner's dues, leading to the decision to wind up the company.

In conclusion, the Court ordered the winding up of "Mynet Internet Services Limited," appointed the Official Liquidator to take possession of the company's assets, and directed the winding-up process as per the Companies Act, 1956. The decision was based on the respondent-Company's admission of the petitioner's dues, lack of response, and commercial insolvency, justifying the winding-up order.