TMI Blog2013 (10) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... l-settled that winding-up proceedings have to be used as a last resort - In a case such as the present one, there were preventive provisions in the Act safeguarding against oppression and mismanagement - If some other remedy was available to the petitioner, that should be exhausted first - This petition was thus premature. The petitioner draws the attention to the accounts to show that for three continuous years the company had been incurring losses which exceed the paid-up capital - this by itself was not decisive of the question whether it was just and equitable to wind up the company - Once the differences between the directors were sorted out – for which no attempt appears to have been made so far – the possibility of the company rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector. Initially the company did well, but later on started facing financial problems for various reasons. Soon the manufacturing operations stopped and the factory became dysfunctional; the factory land had been mortgaged to the bank for loan purposes and interest burden started increasing every day. Losses started mounting. 4. According to the petitioner, he was requesting the other two directors to maintain proper statutory records, to hold board meetings, annual general meetings etc. but to no avail. Disputes arose between the petitioner on the one hand and the other two directors, Satish Kumar and Mohit Kathuria, on the other hand. The petitioner was denied access to the company s records, factory etc. and was made non-functional. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in Rajamundry Electric Supply Corporation Ltd. v. A. Nageswara Rao, (1955) 2 SCR 1066, reiterated in Hind Overseas Private Limited v. Raghunath Prasad Jhunjhunwalla and Others, (AIR 1976 SC 565). The facts alleged in the petition and elaborated before me prima facie show that this is a case to which the provisions of Sections 397-398 may be attracted; I am not expressing any final opinion on the point, but it is only a prima facie view. It is well-settled that winding-up proceedings have to be used as a last resort. In a case such as the present one, there are preventive provisions in the Act safeguarding against oppression and mismanagement. If some other remedy is available to the petitioner, that should be exhausted first: (see o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
