Prashant Glass Works Pvt. Ltd. vs Banaras Marbles & Granites Ltd.
2003 Latest Caselaw 370 Del

JUDGMENT

Mukul Mudgal, J.

1. This is a winding up petition filed under Sections 433(c) and 433(f) read with Section 439(1)(c) of the Companies Act. The petitioner's claim is that the respondent company had the authorized capital of Rs. 1 crore divided into 10,00,000 equity shares of Rs.10 each. The petitioner company holds 2,80,300 shares of Rs.10/- each. The case of the petitioner company in this winding up petition is that it was persuaded to invest in the respondent company on the basis of its projected profitability and accordingly the petitioner company purchased 2,80,300 equity shares of Rs. 10/- each and paid a sum of Rs. 28,030,000/- to the respondent company. There are also averments in the petition regarding notice of cancellation of allotment of a valuable plot in NOIDA and non-completion of the factory to be constructed thereon. The petition also avers that the forfeiture of the plot by the order of the NOIDA authority has occurred and that the respondent has not commenced its business within an year of its incorporation. It is stated that the marble and granite project of the respondent has not yet been commenced and the company has lost is substratum as per the requirement of Section 433(c) and (f) of the Companies Act and this was discovered by an inspection done at the behest of the petitioner by an independent Chartered Accountant.

2. The respondent in its reply has contended that Mr. Ajit Kumar Gupta who is the Director in the petitioner company was a promoter director of the respondent company and had committed to invest Rs. 1,71,66,000/- as is evident from the letter dated 16th November, 1995 sent by the respondent company to the said Shri Ajit Kumar Gupta c/o Prashant Glass Works Pvt. Limited, petitioner company. It is submitted that the defaults in payment had occurred due to non-payment of the promoter's contribution by the petitioner. The respondent company had commenced its business within a year by applying for a plot of land in NOIDA as admitted by the petitioner in para 5 of the winding up petition. The cancellation of plot by NOIDA authorities was wrongful in spite of the approval secured from the Central Government for setting up of an industrial park at the allotted plot and stands challenged in the Allahabad High Court. The respondent has further referred to the demand made on the basis of requisition from the Noida Authority on which there is exchange of acrimonious notes between the parties and the denial of Shri Ajit Kumar Gupta about his liability to make any payment. The respondent has also submitted that in so far as the cancellation of the plot at NOIDA is concerned, a writ petition has been filed before the Allahabad High Court being CWP No. 2780/2002 and the writ petition is pending. In the said petition there is an interim order restraining NOIDA from making allotment of the plot to any other person. It is stated that the respondent is making full and diligent efforts to secure the possession of the said plot of land and the substratum of the company subsists.

3. It is not in dispute that Shri Ajit Kumar Gupta who is the Director of the petitioner company was a Director of the respondent company and was the Director on the date of filing of the present petition. The inter se dispute between the directors about the alleged profitability of the company and the liability to make further investments in the company by one of the directors are disputed questions of fact not capable of resolution under the winding up jurisdiction of this Court. Apart from the above fact an inter-se dispute between the directors ought not to be permitted to be raised in this forum particularly when prima facie satisfactory response has been given by the respondent company to the claim of the petitioner. The respondent has submitted that it is making full efforts to secure the plot at NOIDA and sustain the company. This is evident from the fact that in CWP 2780/2002 in the Allahabad High Court filed by the respondent an interim order has been filed restraining NOIDA authorities from making allotment of the plot to any other party has been passed. In any case prima facie satisfactory response has been given by the respondent company of commencement of the business within one year. The objectivity of an audit report at the behest of the petitioner can also not be given much credence.

4. I am, therefore, satisfied that this petition is liable to be dismissed due to the aforesaid reasons. However, learned counsel for the respondent states that statement of accounts and annual report of the company will be supplied to the petitioner in accordance with the rights which accrue to him as a shareholder. The petitioner's right shall continue to be honoured as a shareholder. Though initially the petitioner claimed to have resigned as a director his learned counsel later on asserted that he continues as a director. If the petitioner continues as a Director all his rights as the Director shall be honoured by the respondent company. The petition stands dismissed but with the observations in this paragraph.