9911796707
TMI Blog2014 (4) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner. 3. After having gone through the typed set of papers filed by the petitioner, I find no good reason to issue notice in the winding up petition in a running company, which had made an income of Rs. 31 Crores for the year ending 31.3.2013 and had made Rs. 15 Crores for the year ending 31.3.2012. The balance sheet of the company for the year 2012-2013 is annexed at Page-35 of the typed set of papers, which shows the financial position of the company sought to be wound up. There, of course, appear to be certain financial difficulties with the carry forward loans. However, that by itself may not justify the cause for winding up the company. The liability, no doubt, is admitted by the respondent, but the petitioner in this case c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company is suffering from a situation which attracts the provisions of Section 433 of the Companies Act, the question of admitting the case and issuing notice will arise. If a notice of the Court in a case of winding up catches the wind, it will reach the body of other creditors and will immediately trigger the panic button and the same would lead to disastrous consequences to all concerned. Several stake holders will be affected. Therefore, the Court should be cautious while issuing a notice in the petition filed for winding up. One of the tests that have been laid down in various decisions of the Court in a petition filed under Section 433 of the Companies Act is complete disclosure in the petition, the details that are relevant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be judged from various sets of facts and circumstances. It may also be stated that inability to pay debts in all cases, ipso facto, could not be construed as an appropriate case for winding up. .... (4) It is necessary for the company court to consider the financial status, strength and substratum of the company, in the overall context. It is possible, at times, that there may be a cash crunch. It may be also, possible, at times, that there is temporary cash crisis despite high sales and heavy turnover and, therefore, in such a situation, mere disability or only on the ground of inability to pay would not constitute a ground empowering the court to wind up the company. .... (7) Winding up of a company, as such, is nothing but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (16) The court must bear in mind one more celebrated principle and consider whether the company has reached a stage where it is obviously and plainly and commercially insolvent, that is to say, that its assets are such and its existing liabilities are such as to make the court feel clearly satisfied that current assets would be insufficient to meet the current liabilities, along with other principles. (17) It is also necessary to consider whether the respondent-company has become defunct or has closed its business, for quite some time, whether it is commercially insolvent. For the purpose of finding commercial insolvency, a mere look into the financial data is relevant to examine about its soundness. In all matters relating to winding ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
