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IN THE HIGH COURT OF GUJARAT
S.D. Dave, J.
Bharwani Bros. & Co. - Petitioner
Versus
Motorol (India) Ltd. - Respondent
Company Petition Nos. 159 of 1995, 37, 219, 235, 276 of 1996, 29, 72, 283, 301, 313, 383, 393 of 1997 and 39, 179, 180, 206 and 208 of 1998
Decided On : 19-08-1999
COMPANY WINDING UP - SECTION 433, 434 OF THE COMPANIES ACT, 1956 - INABILITY TO PAY DEBTS - WINDING UP ORDER PASSED.
Fact of the Case:
17 company petitions were filed by different creditors against Motorol (India) Ltd. for winding up due to the company's inability to pay its debts. The company had received statutory notices under section 434 but failed to pay the outstanding amounts.
Finding of the Court:
The court found that the company was unable to pay its debts within the meaning of sections 433 and 434 of the Companies Act, 1956.
Issues: Whether the company was unable to pay its debts and whether it should be wound up.
Ratio Decidendi: The court considered the following factors in reaching its decision: * The company had failed to pay the outstanding amounts despite receiving statutory notices. * The company had issued cheques that were dishonored. * The company had entered into memorandums of understanding with the creditors but failed to fulfill its obligations. * The company had failed to comply with conditional orders passed by the court. * The company had failed to make payments even after the admission of the petitions and the dismissal of appeals.
Final Decision: The court ordered the winding up of the company under the provisions of the Companies Act, 1956 and appointed the Official Liquidator as the liquidator of the company.
ORDER :
S.D. Dave, J.
Present orders shall govern the disposal of these seventeen company petitions presented by different petitioning creditors against the respondent-company known as 'Motorol (India) Ltd.' for winding up.
2. The respondent-company have got their office at Rinki R & D Centre, near Bombay Shopping Centre, R.C. Dutt Road, Baroda, and have got the Corporate Office at 116/117, Swastik Chambers, Sion-Trombay Road, Chembur, Bombay-400 071. The nominal capital of the respondent-company is Rs. 6 crores divided into 60 lakhs of equity shares of Rs. 10. The issued, subscribed and paid-up capital of the respondent-company is Rs. 5,83,71,660.
3. The following table shows the company petition number, the name of the petitioning creditor, the amount outstanding and the nature of the claim :
|
| Company Ptn. No. | Name of Petitioner | Amount out Stng. | Nature of claim |
| 1. | 159/95 | Jayco Press (P.) Ltd. | 21,90,000 | Bill discounting |
| 2. | 37/96 | Bharwani Bros. & Co. | 15,04,786 | Bill discounting |
| 3. | 219/96 | Videocon Narmada Electronics Ltd | 7,86,529 | Inter Corporate Deposit (ICD) |
| 4. | 235/96 | Metrochem Inds. Ltd. | 15,53,261 | ICD, Short-term |
| 5. | 276/96 | Century Textile & Inds. Ltd. | 27,49,760 | ICD |
| 6. | 29/97 | Lubrizon India Ltd., | 91,35,000 | Price for goods sold & supplied |
| 7. | 72/97 | Coimbatore Lakshmi Industries | 28,56,475 | Bill discounting |
| 8. | 283/97 | A T O (1) Ltd. | 1,70,202 | Tpt. charges |
| 9. | 301/97 | M.B. Parikh Fine-stocks Ltd. | 6,25,000 | Dues for purchase of shares |
| 10. | 313/97 | I.T.C. Classic Finance Ltd. | 36,10,006 + int. at 24% p.a. | Hire purchase and rentals. |
| 11. | 383/97 | Hindustan Petroleum Corpn. Ltd. | 2,97,42,392 + int. 24% p.a. | For goods sold & and supplied. |
| 12. | 393/97 | Mid India Inds. Ltd. | 25,00,000 | ICD |
| 13. | 39/98 | Jetu Jacques Taru Lalwani. | 1,52,61,561 | Decretal dues in summary suit No. 3131/96, decreeted by Bombay High Court. |
| 14. | 79/98 | vigro Frozen Foods (P.) Ltd. | 59,02,400 + 36% int. p. a. | ICD |
| 15. | 180/98 | Monsanto Mfgrs. Pvt. Ltd. | 84,32,000 | ICD |
| 16. | 206/98 | Radico Khaitan Ltd. | 77,61,750 | ICD |
| 17. | 208/98 | Carborundum Universal Ltd. | 25,73,194 | ICD |
These petitions have been taken out under the provisions contained under section 433 and section 434 of the Companies Act, 1956. The case of each of the petitioning creditors is that, the respondent-company is unable to pay its debts and that, it is just and equitable that the company should be wound up. According to the petitioning creditors, though the statutory notices under section 434 have been issued and served to the respondent-company for the huge amounts, the respondent-company has neglected to pay the said sum even after the lapse of the statutory period.
4. Upon hearing the learned counsels for the petitioning creditors and the learned counsel for the respondent-company Mr. Soparkar, it appears that the company is unable to pay its debts within the meaning of section 433 and section 434.
5. It cannot be disputed that before filing of the company petitions for winding up of the respondent-company every efforts came to be made by the petitioning creditors for realisation of the amounts due. Before the filing of these petitions, the respondent-company in some cases had given the cheques which have not been honoured and have been bounced. The respondent-company in some cases had held out the promises to make the payments in near future and necessary memorandum of understanding came to be executed by the respondent-company. Any how the respondent-company has failed to act according to the promises and conditions of the MOU. During the pendency of the petitions before admission, the respondent-company in some of the cases had preferred to handover the cheques once again but they have not been honoured, but have been
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