TMI Blog1963 (6) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... tances in which a company may be wound up by court. Circumstance (c) in that section is: "If the company does not commence its business within a year from its incorporation or suspends its business for a whole year." The circumstances invoked by the Registrar in this case is the fact that the company has not commenced its business within a year from its incorporation on the 28th November, 1960. To present a petition on the ground above-mentioned the Registrar should obtain the previous sanction of the Central Government. This is provided by the second proviso to sub-section (5) of section 439 of the Act. The order granting the sanction formed an annexure to the petition. That order, issued by the Regional Director and dated the 31st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Law Administration, Notification No. G. S. R. 556, dated the 25th June, 1958, I hereby accord sanction to the presentation by the Registrar of Companies, Kerala, o a petition to the High Court at Kerala, for the winding up of the Malabar Iron and Steel Works Limited, on the grounds mentioned in clause (c) of section 433 of the said Act. " It is not contended that the Regional Director was not competent to grant the sanction. The only contention on this aspect of the case is that the ground for winding up stated in the petition is not the same as the ground specified in the order granting the sanction. Counsel for the appellant drew our attention to the opening paragraph of the order: " Whereas the Registrar of Companies, Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcised only where this is a fair indication that there is no intention of carrying on the business. If the delay or suspension is satisfactorily accounted for, an order may be refused?" (13th edition, page 452). In re Metropolitan Railway Warehousing Co. Ltd. [1867] 36 LJ. Ch. 827 is a direct authority for the proposition that the provision does not make the fact that a company has not commenced its business within a year from its incorporation anything in the nature of evidence of an act which gives a vested right to say that the company shall be wound up; and that the court will not exercise the discretionary power conferred on it to wind up a company which has not commenced its business within a year from its incorporation, where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such commencement, in the face of the express prohibition in section 149, cannot be recognised, and its only result, if indeed there has been a commencement, would be that every person responsible for such commencement would be liable to punishment under sub-section (6) of the section. If then the company has not commenced business up to now, and, in view of the fact that there is little prospect of its being able to secure the minimum subscription in the foreseeable future it is not even said that it can it will not be in a position to lawfully commence business in the future there would obviously be an unanswerable case for ordering the winding up of the company on the ground specified in clause ( c ) of section 433 of the Act." Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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