Nitin Goel vs Raj Synthetic
1994 Latest Caselaw 3 Del

JUDGMENT

Usha Mehra, J.

(1) Master Nitin Goel through Mr. Surinder Kumar Gupta has filed a petition for winding up against M/s Raj Synthetic (Polychem) (hereinafter called the company) under Section 433, 434, and 439 of the Companies Act, 1956 (hereinafter called the Act). The Company took over the entire assets and liabilities of M/s Synthetic Polychem, and therefore, according to petitioner the Company is liable to pay all the debts of M/s Synthetic Polychem.

(2) It is the case of the petitioner that during January, 1987 M/s Synthetic Polychem was facing some financial crisis in the business, hence approached the petitioner for loan. Petitioner gave a sum of Rs. 70,000.00 as loan to the said M/s. Synthetic Polychem on 20.1.87 by pay order of the same date drawn on New Bank of India, Bahadur Garh Branch, Delhi. The said Company also agreed to pay interest at the rate of 15%. In April, 1987 M/s Synthetic Polychem again requested the petitioner for further loan of Rs.l0,000.00 which was given vide account payee cheque dated 14.4.87. The said M/s Synthetic Polychem subsequently merged with respondent-Company. The respondent-Company accepted and acknowledged the liability as well as the debts payable to the petitioner. As per the agreement/ undertaking, the respondent-Company only paid interest to the petitioner to the tune of Rs. 23,762/ - by different cheques on different dates. After crediting the interest, the principle amount still due comes to Rs. 80,000.00 and a sum of Rs. 20,900.00 towards interest. Respondent-Company has failed to pay the principal amount as well as balance interest inspite of the statutory notice dated 27.7.90. Inspite of the statutory notice no amount has been paid nor the respondent- Company is in a position to pay the amount as it is not financially solvent.

(3) Notice of this petition was issued to the Company. The Company was duly represented by an Advocate. On 11.4.91 the Advocate of the Company made a statement in the Court that he was not to file the reply because the Company intended to settle the matter by paying the amount due to the petitioner. In this view of the matter the case was adjourned from time to time. But when the respondent did not make the payment nor filed reply then this Court vide order dated 10.5.91, admitted the petition to hearing and ordered the citation to be published in the daily newspaper 'Statesman' (English) and 'Punjab Kesari' (Hindi), as well as Delhi Gazette for 30.9.91. Vide order dated 4.11.91, directions were given to the Official Liquidator to take all necessary steps. The provisional liquidator took over the possession of the factory premises of the respondent- company because the respondent did not make the payment even after the citation had been published pursuance to the order passed by this Court. The provisional liquidator informed this Court on 14.12.93 that there were no chances of the respondent-Company making any payment to the petitioner nor the company was commercially viable nor financially solvent.

(4) I have given my thoughtful consideration to the oral arguments and the documents placed on record as well as to the submissions made by the provisional liquidator. I have also perused the affidavit of Shri Surinder Kumar Gupta. A perusal of the documentary evidence placed on record shows that a sum of Rs. 80,000.00 was taken as loan by M/s. Synthetic Polychem. It is also established on record that the said M/s Synthetic Polychem with its assets and liabilities has been taken over by the respondent-Company. Hence for the liabilities of M/s. Synthetic Polychem the respondent-Company has become liable. The documents coupled with the statement of the provisional liquidator fully establishes that the respondent is not financially solvent to discharge its debt. The debt is admitted and proved on record. The factum that the debt has not been discharged by the company and it is not in a financial position to discharge its debt, I think it is a fit case where the winding up order should be passed. Ordered accordingly. The official liquidator attached to this Court is hereby appointed as the liquidator who will take possession of the assets of the company forthwith.