TMI Blog1960 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... as obtained on August 11, 1956. It was alleged that in fact the company had not done any business, whatsoever, from the date of its incorporation up till the date of the petition. Secondly, it was stated that the substratum of the company had gone completely due to the improper and illegal activities of Shri Ishwar Chander Latka, the nominee of the managing agents of the company. The issued and subscribed capital of this company was stated to be Rs. 13 lakhs out of which Rs. 3 lakhs was paid up. By order of this court dated June 15, 1957 in C.O. 41 of 1957, the issued and subscribed capital was reduced and out of the amount of Rs. 3 lakhs a sum of Rs. 2,52,000 was returned to the shareholders in 1957. A number of other allegations were also made but it is not necessary to go into them for purposes of disposal of this petition. In the written statement filed on behalf of the company, the above allegations were denied. It was stated that a licence for forty thousand spindles was secured from the Government of India by the managing agents who commanded a great influence in high Government circles and they had placed an order for the import of plant and machinery from Japan for setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is a likelihood of the business being resumed, it may not exercise its discretionary power against the company, but if the court is satisfied that no business has been or is likely to be commenced, it should pass an order for winding up of the company on the petition of the shareholders. Suspension of a business for a whole year is usually deemed as an indication of absence of intention to carry on the business, unless suspension has been satisfactorily accounted for. This case is not merely one of suspension of business, in fact, there has been no commencement of any business ever since the inception of the company. For reasons to be examined in detail, under clause (f) of section 443 I am of the view that the discretionary power of the court should not be exercised in company's favour. On the ground whether it is just and equitable that the company should be wound up, the following matters deserve notice. R. W. 2, Shri Ishwar Chander Latka, has admitted most of the allegations. He does not deny that the licence of the company was revoked in December, 1958, by the Central Government and the putting up of a cotton ginning factory was one of the principal objects of this compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as left with it. Up to the end of the financial year 1958, the company 'had already incurred a loss exceeding Rs. 76,000 and its assets consists of a piece of land on which a few rooms have been built where chaff-cutting machinery of the value of Rs. 6,ooo has been supplied by Hari Krishan Syal and for which the company has not paid so far. It is not possible to accept the ipse dixit of Ishwar Chander Latka (R.W. 2) that the value of the land is Rs. 30,000 or Rs. 35,000 nor can any credence be given to the optimistic statement of R. W. 1, Hari Krishan Syal, that on an investment of Rs. 8,000 the company can make Rs. 10,000 a year. This machinery has been installed during "the pendency of these proceedings and probably in order to impress the court that the company has at last started doing something though not at as ambitious a scale as it had intended, when the Government of India had given it the licence in respect of forty thousand spindles. This company has not chosen to place on the record any statements of its profits and loss after March, 1958. Obviously, it had done no business and whatever money it bad spent subsequently must have been a dead loss to the company. The mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as formed had failed. There usually are listed in the memorandum of association a very large number of objects for which the company is established. Because these countless possibilities have not been exhausted, it cannot be said, that the management of the company can be allowed to go on speculating one by one through the endless objects mentioned in the memorandum, on the specious ground that a particular venture is included among the objects. The winding up order cannot be resisted by merely showing that there are large subsidiary powers contained in the memorandum of the company. The substratum of the company is deemed to be gone when the main object for which the company was formed has become impracticable. My attention has been drawn by the learned counsel for the company to Muralidhar Roy v. Bengal Steamship Co. Ltd. [1920] I.L.R. 47 Cal. 654. In that case the objects of the company according to its memorandum were inter alia to carry on business as carriers by river. The company had a fleet of two flats and a steamer, constructed from the river for towing the flats. The company was carrying on its business with a steamer and two flats but the flats had been taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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