9911796707
TMI Blog1987 (3) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... of Economic Affairs, Ministry of Finance, as required by the provisions of the Securities Contracts (Regulation) Act. The petitioner alleged that he had received complaints from the Federation of Employees of Delhi, Gujarat, Haryana and Rajasthan against the affairs of the company, wherein allegations were made that some of the promoters of the company were carrying on the activities with ulterior motive and requested cancellation of their registration. In view of the allegations made in the petition, the petitioner contended that it is clearly established that the respondent company has not commenced its business within a year from the date of its incorporation and it is a fit case that the company may be wound up under the provisions of clause (c) of section 433 of the Companies Act, 1956 (hereinafter referred to as "the Act"). It is also alleged that it is just and equitable that the company should be wound up under the provisions of clause (f) of section 433 of the Act. The petitioner, Registrar of Companies, is required to obtain the previous sanction of the Central Government under section 439(5) of the Act. It is, therefore, stated that the Regional Director has accorded sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a letter on June 18, 1983, to the Controller of Capital Issues to approve the draft memorandum and articles of association of the stock exchange and it was thereafter that the memorandum and articles of association of the Jaipur Stock Exchange were approved by the Ministry of Finance and it was directed to take necessary steps for incorporation of the stock exchange under section 12/25 of the Act. Immediately, after the incorporation of the company, the respondent addressed a letter to the Jaipur Development Authority for allotment of a suitable land to enable the stock exchange to erect its own office. The respondent company further stated that regular meetings of the board of directors were convened and held wherein several decisions were taken to expedite the process of recognition. The respondent company also made it clear that it was on account of certain circumstances beyond its control that the completion of certain formalities and submission of application form for recognition took some time as some civil suits were filed by certain interested parties and an interim order was obtained. The suit was filed on May 2, 1984, and an injunction order was obtained on May 3, 1984. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground mentioned in clause (c) of section 433 of the Act. But, from the order of sanction, it appears that the Regional Director accorded sanction to presentation by the Registrar of Companies of a petition to this court for the winding up of the respondent company on the grounds mentioned in clauses (c) and (f ) of section 433 of the Act. In such circumstances, Shri Bhandari, learned counsel for the respondent company, has raised a preliminary objection that the petition is not maintainable on the ground set forth under clause (f) of section 433 of the Act, as the sanction was desired by the Registrar of Companies, Jaipur, for the winding up of the company by invoking the provisions of section 433(c) of the Act. Section 433 of the Act deals with the circumstances in which the company may be wound up by the court. The circumstance envisaged under clause (c) of section 433 is that, "if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year". The circumstance, in this respect invoked by the Registrar in the case, is the fact that the company has not commenced its business within a year from its incorporation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All. 452, it has been observed that a winding-up order should not be made on the ground of closure of a cotton mill for over a year where there is sufficient explanation for the closure and a reasonable prospect of re-starting and earning profits. In State v. Mayurbhanj Spinning and Weaving Mills, AIR 1963 Orissa 1, the court considered as to; under what circumstances, the company may be ordered to be wound up under clause (f) of section 433 of the Act and the court observed that the decisive question must be the question whether at the date of the presentation of the winding-up petition, there was any reasonable hope that the object of running the mills at a profit, with a view to which the company was formed, could be attained. It was also observed that even if the company has not carried on business for a year, the court will not wind up if there are reasonable prospects of its doing so, at no too remote a date and, there are good reasons for the delay. Thus, the law seems to be very clear that the jurisdiction to wind up a company when it does not commence its business within a year from its incorporation, or suspends its business for a year, is discretionary and it has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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