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2012 Supreme(Kar) 860
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
B.V. Pinto, J.
Ashok Gowda —Appellant
Vs.
Gopika Credit and Investment Co. —Respondent
Co. Petition No. 126 of 2006
Decided on : 17-01-2012
Advocate Appeared:
Mr. K. Shrihari, for the Appellant
Mr. K. Rama Bhat, for the Respondent
The main legal point established in the judgment is that a company may be wound up under the Companies Act if it is unable to clear its debts and liabilities, as evidenced by its financial position.
Headnote:
Companies Act - Winding up - The court allowed the petition for winding up of the respondent-company under Section 433(e) and (f) of the Companies Act, 1956, as the respondent company was unable to clear its debts and liabilities.
Fact of the Case:
The petitioners sought to wind up the respondent-company, a partnership firm engaged in accepting deposits and lending at a higher rate of interest. The respondent-company had incurred losses and failed to repay the amount due to the petitioners, leading to the petition for winding up.
Finding of the Court:
The court found that the respondent-company was unable to clear its debts, and therefore, allowed the petition for winding up. The Official Liquidator was appointed to take over the assets and liabilities of the respondent-company.
Issues: The main issue was whether the respondent-company should be wound up due to its inability to repay its debts and liabilities.
Ratio Decidendi: The court's decision was based on the respondent-company's failure to clear its debts and liabilities, as evidenced by the profit and loss account and balance sheet, leading to the conclusion that the petitioners had made out a case for winding up of the company.
Final Decision: The petition for winding up was allowed, and the Official Liquidator was appointed to take over the assets and liabilities of the respondent-company. The petitioners were directed to deposit a sum with the Official Liquidator to meet the initial expenses of winding up proceedings, and to serve a copy of the order on the Registrar of Companies within 30 days.
B.V. Pinto , J--This petition is filed under Section 433(e) and (f) of the Companies Act, 1956 (hereinafter referred to as 'the Act' seeking to wind up the Respondent-Company by name M/s. Gopika Credit & Investment Company (herein after referred to as 'respondent - Company', which is a partnership firm having its registered office at No. 1st Floor, Gopika Building, Main Road, Sullia -574 239.
2. It is contended by the petitioners that the first respondent is the registered Partnership firm and it is represented by its Managing Partner - the second respondent. Respondent Nos. 3 to 9 are other partners of the firm. The firm is deemed to be a Company under Section 582 of the Companies Act and the provisions of the Companies Act are applicable. The respondent Company is engaged in the business of accepting deposits from the general public and lending the same to the needy at an higher rate of interest and thereby, earn profits, his further stated that the respondent-company after running the Company for certain number of years has incurred loss and thereafter, it did not respond to the request of the petitioners for repayment of the amount deposited by them, leave alone the interest thereon. It is stated that a sum of Rs. 11,67,945/- is due to the petitioners which are the monetary value of the Fixed Deposit receipts issued by the respondent-company. It is stated by the petitioners that the liability of the respondent-company is more than five crores and the assets are not more than three crores as on the date of the filing the petition. It is further stated that the petitioners have issued notice to the respondent-company asking for repayment of the amount due to them. In spite of the lapse of 21 clays, the respondent-company has not paid the amount due to the petitioners. Hence, left with no other alternative the petitioners have filed this petition for winding up of the respondent-company.
3. The respondents had filed appearance before this Court through their counsel and also have filed Statement of Objections. In the statement of objections, it is stated that if the loans and advances made by the respondent Company are recovered, the respondent-company are able to repay the amount due to the investors. However, due to the financial crises and the globalisation of markets, the respondents are unable to repay the amount. It is further stated by the respondents that the respondents have no intention to defeat the interest of the investors, but the respondents have also filed documents namely the profit and loss account and balance sheet according to which the liability of the Companies are more than the assets.
4. The petition was admitted on 19.08.2009 and thereafter, the advertisement, was taken out in 'The Hindu' daily newspaper dated 31.08.2009. However, no further response has been received in this matter.
5. Heard Sri K, Shrihari, learned Counsel for the petitioners and Sri K. Rama Bhat, learned Counsel for the respondents.
6. Perused the entire materials on record. It is seen that the respondent Company is unable to clear the debts of the creditors and therefore, the petitioners have made out a case for winding up of the Company. Learned Counsel for the respondent-company submits that in the event of the company being able to mobilise the amount, the Company would file an application for recalling the order of winding up. However, there are no concrete proposals as on today.
7. In the circumstances, I pass the following:-
ORDER
1. Petition is hereby allowed.
2. Respondent-company is ordered to be wound up. Official Liquidator attached to this Court is appointed to take over the assets and liabilities of the respondent-company.
3. Petitioners are directed to deposit a sum of Rs. 25,000/- with Official Liquidator to meet the initial expenses of winding up proceedings.
4. Petitioners are directed to serve a copy of this order on the Registrar of Companies within 30 days.
5. Petitioners are further directed to take out advertisement
