A company can be wound up on the grounds of insolvency and suspension of business for more than a year, even if there are objections from various parties, as the rights and liabilities of the company remain and can be enforced by or against the official liquidator.

( 1 ) THE company has sought an order directing it to be wound up on the strength of a special resolution passed at a general meeting of the company on June 24, 2005. By such resolution the company had resolved that steps be taken for it to be wound up.

( 2 ) THE Rehabilitation Industries Corporation Limited (the company)was incorporated in 1959 and promoted by the Central Government, inter alia, to establish industries and enterprises to provide employment to displaced persons from erstwhile East Pakistan and West Pakistan and repatriates from the then Burma and the then Ceylon.

( 3 ) IN Course of time funds have been poured into the company by the Central Government in furtherance of the cause for which the company was set up. There was little or no return but that was a social cost that the Central Government incurred through the instrumentality of the company. In course of time the company has outlived its purpose and does not carry on any business. The paltry amounts of income in recent times have been on account of lease rents. The once substantial staff strength has been brought down by the company offering a voluntary Separation Scheme (VSS) completely supported by the central Government.

( 4 ) THOUGH under section 433 of the Companies Act, 1956 (the said act) it was enough for the company to seek winding up on the strength of a special resolution passed by it, additional grounds of the company being insolvent and having suspended its business for more than a year, were also cited to justify the order sought. The petition has been advertised pursuant to an order of Court.

( 5 ) THE petition has been opposed by several persons having varying interests in the company. A set of workmen was against the company passing over to the stage of imminent death. A landlord sought to intervene seeking protection of the premises transferred in favour of the company and also claiming as creditor. The landlord moved a separate application being C. A. No. 423 of 2006. Tenants under the company (or sub-tenants) claimed that they would suffer if the management passed over to the official liquidator. The State was represented and though it was not opposed to the order sought, it required that the land made available by the State to the company should revert to the State upon an order of winding up being passed. A lessee under the company complained that its right to the land in its occupation would be in jeopardy if the company was wound up. A claimant in an arbitration reference involving the company sought protection of its claim. Another employee and a creditor wanted their claims to be secured.

( 6 ) THE company has relied on a notice issued on its behalf on september 1/4, 2000. By such notice a revised VSS for the employees of the company was introduced. The opening lines of such notice reads as follows:

"it is notified to all concerned that Government of India proposes to close down Rehabilitation Industries Corporation Limited. On closure compensation to the employees will be paid as per provision of I. D. Act, 1947. However, as a safety net it has been decided to introduce Revised Voluntary Separation Scheme (VSS) on the following terms and conditions. "

( 7 ) THOUGH such Scheme was initially for a period of two months beginning September 1, 2000 the same had been kept alive till september 30, 2000. Since the VSS was to be supported with loan (read, grant) to be made available by the Central Government, the company sought extension of the tenure of the VSS. The Central Government acceded to such request and by a writing of December 12, 2000 provided that the Scheme could be kept open till the date fixed for closure of the company. It appears from such writing that an expert group had been set up by the Department of Heavy Industries of the Central Government to examine the possibility of revival of the company. It is recorded that even the representative of the union did not contest the management's percep