JUDGMENT S.P. Mehrotra, J.
1. The present Company Petition has been filed by the Petitioner under Section 433(c), (e) and (f) of Companies Act, 1956.
2. It is , interalia, prayed that an order be passed for winding-up of the affairs of. the Company, namely, M/s. Sri Hari Wire and Wire Products Private Limited having its registered office at 77/39, Coolie Bazar, Kanpur( hereinafter also referred to as the " Respondent-Company").
3. It is, interalia, stated in the petition that the Respondent-Company is a Company limited by shares and had been incorporated under and in accordance with the provisions of the Companies Act, 1956, and it has its registered office at 77/39, Coolie Bazar, Kanpur; and that the Respondent-Company at the relevant point of time was engaged in the business of Metal Wire Mesh/net.
4. The names of the existing Directors of the Respondent-Company have been mentioned in paragraph 5 of the Company Petition.
5. It is, interalia, further stated in the Company Petition that in the year 1998, Directors of the Respondent-Company approached the Petitioner for loan of Rs. 5 lacs in order to enable them to meet their financial liabilities; and that on the request of the Respondent-Company as made through its Directors , an amount of Rs.5 lacs was given by the Petitioner to the Respondent-Company vide cheque No. 354359 dated 17th October, 1998 drawn on Allahabad Bank , The , Mall, Kanpur; and that in terms of the mutual understanding, the said amount was liable to be repaid on demand along with interest @ 15% per annum .
6. It is ,interalia, further stated in the Company Petition that the said cheque was duly encashed by the Respondent-Company.
7. It is , interalia, further stated in the Company Petition that the statement of account for the year ending 31st March, 1999 showing the factum of payment of Rs.5 lacs by the Petitioner to the Respondent-Company and the interest liability of Rs. 34,100/- on the aforesaid amount, calculated @ 15% per annum, was duly confirmed by the Respondent-Company through one of its Directors.
8. Photocopy of the statement of account, as maintained by the Petitioner, has been filed as Annexure -I to the Company Petition.
9. It is, interalia, further stated in the Company Petition that the Respondent-Company made payment of interest component which fell due on 31st March, 1999 by means of a cheque for a sum of Rs, 34,100/- dated 6th April, 1999, and the said amount has been duly credited to the account of the Respondent-Company on 7th April, 1999.
10. It is, interalia, further stated in the Company Petition that the Respondent-Company paid a sum of Rs. 1 lac vide two cheques bearing no. 027648 dated 29th March, 2000 and no. 027649 dated 31st March, 2000, each for a sum of Rs. 50,000/-; and that the amounts of the said two cheques have also been duly credited to the Respondent-Company's account.
11. Photostat copy of the extract of the Petitioner's statement of account for the financial year ending 31st March, 2000 reflecting the aforesaid three entries towards repayment of the interest and the principal amount of Rs. 1 lac, has been filed as Annexure -II to the Company Petition.
12. It is , interalia, further stated in the Company Petition that the last payment on account of debt amount was made by the Respondent-Company on 31stMarch, 2000, and the same have been credited to the Respondent-Company's account on 31st March, 2000 itself.
13. It is, interalia, further started in the Company Petition that since thereafter not a single shell has been paid by the Respondent-Company in respect of the aforesaid debt either towards interest or towards principal.
14. It is, interalia, further stated in the Company Petition that when despite repeated request the Respondent-Connpany failed to discharge its liability, the Petitioner was constraint to cause notices to be issued to the Respondent-Company at its registered office and also to its Directors under registered cover; and that the said notices dated 21st /30th January, 2003 were dispatched under registered cover on 5th February, 2003.
15. Photostat copies of the said notice alongwith postal receipts have been filed and collectively marked as Annexure -III to the Company Petition.
16. It is, interalia, further stated in the Company Petition that all the said notices have been returned back unserved with the endorsement that the registered office of the Respondent - Company is lying closed.
17. Photostat copies of the postal envelopes, as returned, have been filed and collectively marked as Annexure -IV to the Company Petition.
18. It is, interalia, further stated in the Company Petition that as on date the liability of the Respondent-Company towards the Petitioner for the aforesaid debt towards balance of principal amount is Rs. 4 lacs, and Rs. 3,02,797 towards interest for the period between 1st April, 1999 to 15th January, 2003; and that the Respondent-Company is further liable to pay interest with effect from 16th January, 2003 till the date of payment.
19. It is, interalia, further stated in paragraph no. 17 of the Company Petition that according to the information available to the Petitioner , the business of the Respondent-Company has come to stand-still since fast one year, and the Directors of the Respondent-Company in order to avoid its creditors have even stopped opening its registered office; and that mostly the registered office remains closed.
20. It is, interalia, further stated in paragraph no. 18 of the Company Petition that the Respondent-Company has virtually no assets left from which it may meet its liability.
21. It is, 'nteralia, further stated in paragraph no. 19 of the Company Petition that the substratum of the Respondent- Company has gone, and it is no more commercially solvent.
22. It appears that by the order dated 25.3.2003, notice was directed to be issued on the Company Petition.
23. The said order dated 25.3.2003 is quoted below:-
" Issue notice returnable at an early date".
24. It further appears that pursuant to the said order dated 25.3.2003, notice was issued to the Respondent-Company by Registered Post A.D. fixing 5.5.2003.
25. The Office submitted its Report dated 21.7.2003/4.8.2003/11.8.2003, interalia, stating that "neither A.D. nor undelivered cover has been returned back".
26. In view of the said Office Report, the Court passed an order dated 11.8.2003, interalia, directing that fresh notices be issued to the Respondent-Company as well as to the Directors, mentioned in paragraph no.5 of the Company-Petition .
27. The said order dated 11.8.2003 is quoted below:-
" Perused the office report dated 21st July, 2003 In view of the said office report, it is directed that fresh notices will be issued to the Respondent-Company as well as to the Directors, mentioned in paragraph 5 of the Company Petition.
Notices will be issued fixing a date in the week commencing if1 October, 2003. Steps will be taken by the learned counsel for the petitioner within a week".
28. It further appears that pursuant to the said order dated 11.8.2003, notices were issued to the Respondent-Company , as well as to the Directors , mentioned in paragraph no. 5 of the Company Petition. .
29. The Office submitted its Report dated 13.10.2003/20.10.2003 in regard to the service of fresh notices issued pursuant to the said order dated 11.8.2003.
30. In view of the said Office Report dated 13.10.2003/20.10.2003, the Court by its order dated 20.10.2003 directed for service of notice through publication in Daily Newspaper "Amar Ujala" ( Hindi) , as mentioned in the said order dated 20.10.2003.
31. The said order dated 20.10.2003 is quoted below:-, " Learned counsel for the petitioner is required to take steps for service through publication in Daily Newspaper, "Amar Ujala" ( Hindi) published from Kanpur within three weeks from today.
List after service through publication".
32. It further appears that pursuant to the directions given in the said order dated 20.10.2003, notice was published in the Newspaper "Amar Ujala" dated 14.11.2003.
33. The petitioner filed an application being Civil Misc. Application No. 229094 of 2003 (Paper no. A-6), interalia, reporting compliance of the directions given in the said order dated 20.10.2003.
34. The Court passed the following order dated 5.2.2004 on the said application ( Paper No. A-6):-
"A perusal of the averments made in the affidavit accompanying the application shows that pursuant to the order dated 20th October, 2003 passed by this Court, notice in respect of the Respondent-Company ( M/s. Sri Hariwire and Wire Products Private Limited) was published in the Newspaper "Amar Ujala" dated 14th Nov. 2003. Copy of the said Newspaper "Amar Ujala " dated 14th Nov., 2003 has been filed as Annexure 1 to the affidavit accompanying the application.
In view of the aforesaid, service of notice on the Respondent-Company is deemed to be sufficient.
List the petition for admission in the week commencing 1st March, 2004 "
35. Thereafter, the Court ,by the order dated 16.4.2004, interalia, directed that the Company Petition be advertised under Rule 24 of the Companies ( Court) Rules, 1959.
36. The said order dated 16.4.2004 is as follows:-
"By order dated 5.2.2004, notice was deemed to have been served upon the respondents by publication . No one has appeared on behalf of the Respondent-Company . Consequently the petition is admitted.
Let the petition be heard on 12.7.2004.
Learned counsel for the petitioner will take steps for publication as contemplated under Rule 24 of the Companies Rules. Necessary steps may be taken within one month from today"
37. It further appears that pursuant to the directions given in the said order dated 16.4.2004, the Company Petition was advertised in the Newspapers, as well as in the Official Gazatte of the State of U.P.
38. The Petitioner filed a list of documents ( Paper no. A-7) annexing thereto copies of the said Newspapers as well as copy of the Official Gazatte of the State of U.P.
39. Thereafter , the Court passed the following order dated 31.8.2004:-
"By the order dated 16th April, 2004, the Company (Winding up) Petition was directed to be advertised under Rule 24 of the Companies (Court) Rules, 1959.
List of Documents (Paper No. A-7) has been filed on behalf of the petitioner annexing thereto a copy of the newspaper "Amar Ujala" dated 7th May, 2004, a copy of the newspaper "City Pioneer" dated 7th May, 2004 and a copy of the Official Gazette of the State of U.P. dated 22nd May, 2004.
A perusal of the copies of the said newspapers and the copy of the said Official Gazette shows that the Company (Winding up) Petition, was advertised in the said newspapers and the said Official Gazette showing the date of hearing as 12th July, 2004, as directed by the order dated 16th April, 2004 .
Let the said copies of the newspapers and the Official Gazette be taken on record.
List this case for hearing in the week commencing 11th October, 2004".
40. Pursuant to the said order dated 31.8.2004, the case was listed on 11.10.2004.
41. On 11.10.2004, the Court passed an order directing the Office to submit its report as to whether any reply/objection had been filed pursuant to the Company Petition having been advertised under Rule 24 of the Companies ( Court ) Rules, 1959, as directed by the said order dated 16.4.2004.
42. The said order dated 11.10.2004 is quoted below:-
" Office is directed to submit report as to whether any reply /objection has been filed pursuant to the Company-Petition having been advertised under Rule 24 of the Companies ( Court) Rules, 1959, as directed by the order dated 16th April, 2004.
List in the week commencing 22nd Nov. 2004."
43. Pursuant to the said order dated 11.10.2004, Office has submitted its report dated 22.11.2004/30.11.2004/7.12.2004/21.12.2004 which is quoted below :-
"In compliance with. Court's order dated 11.10.04, any reply/objection has not been filed by the Respondent-Company.
The case is put -up for hearing".
44. In view of the said Office Report, the Court by its order dated 31.3.2005 directed the case to be listed for hearing in the week commencing 9.5.2005.
45. The case is accordingly listed before the Court.
46. I have heard Sri Navin Sinha, learned Senior Counsel, assisted by Sri Vipin Sinha, learned counsel for the Petitioner, and perused the record.
47. It is submitted by Sri Navin Sinha, learned Senior Counsel appearing for the Petitioner that an amount of Rs. 4 lacs is due from the Respondent-Company towards the principal amount and Rs. 3,02,797/- is due towards interest for the period between 1st April, 1999 to 15th January, 2003.
48. It is further submitted that the Respondent-Company is liable to pay interest with effect from 16th January, 2003 till the date of payment.
49. Notice , as per the requirements of Section 434 of the Companies Act, 1956 , the submission proceeds,was given to the Respondent-Company by Registered Post A.D.
50. Similar notices were also sent to the Directors of the Respondent-Company. However, the said notices were returned back unserved with the endorsement that the Registered Office of the Respondent-Company was lying closed.
51. Sri Navin Sinha further submits that the notice , as per the provisions of Section 434 of the Companies Act, 1956 having been sent at the address of the Registered Office of the Respondent-Company by Registered Post A.D. , and the same having been returned back with the endorsement that the Registered Office of the Respondent-Company was lying closed, the service of the said notice would be deemed to be sufficient.
52. It is further submitted that despite the said notice having been sent to the Respondent-Company , the payment of amount due from the Respondent-Company has not been made to the Petitioner ,and , as such, the Respondent-Company would be deemed to be unable to pay its debts in view of the provisions of Section 434(1)(a) of the Companies Act, 1956.
53. It is further submitted that the Respondent-Company never appeared before the Court to controvert the averments made in the Company Petition, and therefore, the averments made in the Company Petition would be deemed to be correct.
54. It is further submitted that in view of the averments made in the Company Petition, the Respondent-Company is no more commercially solvent, and. it is unable to pay its debts. As such, the Respondent-Company is liable to be wound -up in view of the provisions of Section 433(e) of the Companies Act, 1956.
55. I have considered the submissions made by Sri Navin Sinha, learned Senior counsel appearing for the petitioner.
56. From the facts given above, it is evident that before the Company Petition was directed to be advertised under Rule 24 of the Companies ( Court) Rules, 1959, notice was directed to be issued on the Company Petition by the order dated 25.3.2003. Notice was accordingly issued to the Respondent-Company by Registered Post , A.D. fixing 5.5.2003.
57. The Office submitted its Report dated 21.7.2003/4.8.2003/11.8.2003, interalia, , stating that "neither A.D. nor undelivered cover has been returned back".
58. The Court by its order dated 11.8.2003 directed for issuance of fresh notices to the Respondent-Company as well as to the Directors of the Respondent-Company , mentioned in paragraph no. 5 of the Company Petition.
59. Notices were accordingly issued to the Respondent-Company as well as to the Directors , mentioned in paragraph no. 5 of the Company Petition.
60. The Office submitted its Report dated 13.10.2003/20.10.2003 in regard to the service of fresh notices issued pursuant to the said order dated 11.8.2003.
61. In view of the said Office Report dated 13.10.2003/20.10.2003, the Court by its order dated 20.10.2003 directed for service of notice through publication in Daily Newspaper" Amar Ujaja".( Hindi).
62. The notice was accordingly published in the Newspaper" Amar Ujala" dated 14.11.2003.
63. In view of the publication of notice in the said Newspaper, service of notice on the Respondent-Company was deemed to be sufficient by the order dated 5.2.2004 passed by the Court.
64. However, the Respondent-Company did not put in appearance in the Company Petition .
65. In the circumstances, by the order dated 16.4.2004, the Company Petition was directed to be advertised under Rule 24 of the Companies ( Court) Rules, 1959.
66. The Company Petition was accordingly advertised under Rule 24 of the Companies ( Court) Rules, 1959 in the Newspaper" Amar Ujala"( Hindi) dated 7.5.2004 and in the Newspaper "City Pioneer"( English) dated 7.5.2004. The Company Petition was also advertised in the Official Gazette of the State of U.P. dated 22.5.2004.
67. However, despite the Company Petition having been advertised, as per the provisions of Rule 24 of the Companies ( Court ) Rules, 1959, no reply /objection was filed by the Respondent-Company or by anyone else.
68. It is , thus, evident that the Respondent-Company has not put -in appearance in the Company Petition to controvert the averments made in the Company Petition.
69. It is, interalia, stated in Paragraph no. 16 of the Company Petition that the Respondent-Company is liable to pay to the Petitioner an amount of Rs. 4 lacs towards balance of principal amount and Rs. 3,02,797/- towards interest for the period between 1.4.1999 to 15th January, 2003.
70. It is , interalia, stated in paragraph no 14 of the Company "Petition that the notices dated 21st /30th January, 2003 were issued to the Respondent-Company under registered cover ; and that the said notices were dispatched under registered cover on 5.2.2003.
71. Photostat copy of the said notice along with Photostat copies of the postal receipts, has been filed as Annexure no. III to the Company Petition , and appears at page 19 of the Paper Book of the Company Petition.
72. It is, interalia , further stated in paragraph, no. 15 of the Company Petition that the said notices were returned back unserved . with the endorsement that the Registered Office of the Respondent-Company was lying closed.
73. Photostat copies of the postal envelops, as returned, containing the endorsement of the postal department have been collectively filed as Annexure no. IV to the Company Petition and appear at pages 22,24 and 26, respectively of the Paper Book of the Company Petition.
74. In view of the fact that the said notices were sent by Registered Post A.D. to the Respondent-Company , as well as to the Directors of the Respondent-Company at the Registered Office of the Respondent-Company ,and the said notices were returned back unserved with the endorsement , as mentioned above, I am of the opinion that the service of the said notices, sent by Registered Post A.D., to the Respondent-Company as well as to the Directors of the Respondent-Company, would be deemed to be sufficient.
75. It is further evident from the averments made in the Company Petition that no payment has been made by the Respondent Company within the period, mentioned in Section 434(l)(a) of the Companies Act, 1956, or even thereafter, despite the notice, as per the provisions of Section 434(1)(a) of the Companies Act, 1956, having been sent to the Respondent-Company under Registered Post A.D. at its Registered Office ,and the service thereof having been deemed to be sufficient, as mentioned above.
76. In the circumstances, the Respondent -Company would be deemed to be unable to pay its debts in view of the provisions of Section 434(l)(a) of the Companies Act, 1956 read with Section 433(e) of the Companies Act, 1956 .
77. Even otherwise, in view of the facts and circumstances stated in the Company Petition, which have not been controverted by the Respondent-Company , it is evident that the Respondent - Company is unable to pay its debts. As such, the. Respondent-Company is liable to be wound up under the provisions of Section 433(e) of the Companies Act, 1956.
78. As regards the averments made in paragraph no. 17 of the Company Petition regarding business of the Respondent-Company having come to a standstill since last one year, I am of the opinion that only vague allegation has been made by the Petitioner on the basis of information allegedly available to the Petitioner. In my view , in the absence of complete details regarding closure of the business of the Respondent-Company , it is not possible to go into the question as to whether the Respondent -Company is liable to be wound up on the ground of having suspended its business for a year , as contemplated under Section 433(c) of the Companies Act, 1956.
79. Again, as regards the averments made in paragraph nos. 18 and 19 of the Company Petition, namely, that the Respondent -Company has virtually no assets left from which it may meet its liability, and that the substratum of the Respondent -Company has gone, and it is no more commercially solvent, I am of the opinion that full and complete details have not been given by the Petitioner in regard to the said averments.
80. In my view, in the absence of the full and complete details in regard to the said averments, it is not possible to go into the question as to whether the substratum of the Respondent-Company has gone or it is no more commercially solvent. Therefore, no Winding Up order can be passed in regard to the Respondent -Company on the ground contemplated in Section 433(f) of the .Companies Act, 1956.
81. However, as mentioned above, the Respondent-Company is unable to pay its debts. As such, the Respondent-Company is liable to be wound up under Sections 433(e) read with Section 434 of the Companies Act, 1956.
82. Accordingly, the Respondent-Company , namely, M/s. Sri Hari Wire and Wire Products Private Limited having its Registered Office at, 77/39 , Coolie Bazar, Kanpur be wound up in accordance with the provisions of the Companies Act, 1956 and the Rules framed thereunder.
83. The Official Liquidator, attached to this Court, is appointed as the Liquidator of the Respondent-Company , as per the provisions of Section 449 of the Companies Act, 1956, and he is directed to take appropriate steps for winding-up of the Respondent -Company.
84. The Petitioner is directed to take requisite steps as per the provisions of Rule 113 of the Companies ( Court) Rules, 1959.
85. The Company Petition stands disposed of accordingly.