Hardeep Gill vs Pumpkin Studio Pvt Ltd & Anr.
2013 Latest Caselaw 3221 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI
                                         Reserved on:24th July, 2013
%                                       Date of Decision: 26th July, 2013

+      CO.PET. 379/2012 & C.A. No.1501/2012
       HARDEEP GILL                                  ..... Petitioner
                    Through: Mr.Sujeet Kumar Mishra, Adv.
                    versus
       PUMPKIN STUDIO PVT LTD & Anr.        ....Respondent
                    Through: Mr.Ajit Singh. Adv. for R-1.
                             Ms.Gurpreet Gill, R-2 in person.
CORAM:
MR. JUSTICE R.V. EASWAR

                             JUDGMENT

R.V. EASWAR, J.:

This is a petition filed by Mr. Hardeep Gill, one of the directors

of Pumpkin Studio Private Limited ("Company"), the first respondent

herein, for the winding up of the Company under sections 433(c), (f)

and (g) of the Companies Act, 1956 ("Act"). One of the other

directors, Mrs. Gurpreet Gill, has been impleaded as the second

respondent. She has filed the reply to the petition on behalf of the

Company.

2. The Company was incorporated in 2002 to carry on the

multimedia centre where training was to be imparted to students and

to carry on the software development. A franchise agreement was

entered into by the Company with Maya Academy of Advanced

Cinematics for period of five years in this behalf. Initially the

petitioner and the second respondent were the only shareholders of

the Company whose authorised, issued, subscribed and paid-up share

capital was Rs. one lakh only; subsequently, one Taruna Ummati was

inducted as a shareholder and she and the petitioner held 30% shares

each, whereas respondent No. 2 held the balance 40% shares in the

Company.

3. Soon there were allegations of mismanagement levelled by the

second respondent, who was stationed in Chandigarh, against the

petitioner herein, who was managing the Company‟s affairs in Delhi

and disputes arose. The franchise agreement was terminated in 2005.

The second respondent filed a petition under sections 397-398 of the

Act in the Company Law Board ("CLB") which directed that the

petitioner would manage the affairs of the Company together with

respondent No.2. An appeal against the order of the CLB is said to be

pending before this Court in Company Appeal (SB) No. 17/2009.

Despite the order of the CLB the disputes continued and the board

meetings could not be conducted. The annual returns of the

Company, the profit and loss accounts and the balance sheets could

not be filed with the Registrar of Companies ("ROC"). There was

thus a stalemate.

4. In the above background, respondent No.2 filed Company

Petition No. 182/2010 before this court under clauses (e) and (f) of

section 433 for the winding up of the Company. This petition was,

however, permitted to be withdrawn with liberty to file appropriate

recovery proceedings vide order of the learned single judge

(Manmohan, J.,) dated 20-9-2011.

5. It is contended in support of the present petition that it is just

and equitable that the Company be wound up. It is contended that

respondent No.2 herself had earlier sought winding up of the

Company on the same grounds and therefore there cannot be any

objection from her to the present winding-up petition. Moreover, it is

contended, the substratum of the Company is lost and hence it is just

and equitable that it is wound up. It is also pointed out that the

business of the Company has been suspended for more than a year

and therefore clause (c) of section 433 applies; and that the company

has not filed its annual return, balance sheets and profit and loss

accounts for five consecutive years with the ROC and therefore

clause (g) of section 433 applies.

6. On behalf of the respondents, the petition for winding-up is not

opposed. No reply to the present petition has been filed by the

respondent No.2. This Court, therefore, directed her to file the reply

in Court and to pay costs of Rs.5,000/- for the delay in fling the reply.

The learned counsel for the company however preferred not to file

any reply and submitted that she would argue the matter without

filing the filing the said reply. It is submitted that the petitioner has

started another company with a similar sounding name - Pumpkin

Academy of Digital Arts - and has taken away all the assets of the

respondent-Company which should be directed to be returned to it. It

is also submitted that criminal proceedings and proceedings for

infringement of trade mark are pending against the petitioner, in

addition to the Company appeal pending before this Court.

7. Considering the aforesaid submissions and the facts of the

case, the winding-up petition is admitted. The business of the

Company has been suspended for more than one year and so clause

(c) of section 433 of the Act applies; the annual accounts and annual

returns have not been filed since the year 2007 which attracts clause

(g) of Section 433. In addition to these two clauses, I am of the view

that it is just and equitable that the Company be wound up. Its share

capital is small and is held by only three persons. It is more akin to a

partnership concern. There are allegations against each other by the

two directors (the petitioner herein and respondent No.2) and the

business has ceased. There is a stalemate. In fact, the substratum of

the Company seems to have been lost. Moreover, the Company is

becoming debt-ridden due to the burden of maintaining of its office.

It is stated in the present petition that as on date the Company owes

an outstanding debt of Rs.50,00,000 towards ICICI Bank which the

Company is unable to pay. There are other proceedings against the

petitioner stated to be pending. It is therefore held that clause (f) of

section 433 is also attracted.

8. The petition is, therefore, admitted. The Official Liquidator

attached to this Court is appointed as the Provisional Liquidator

(„PL‟) of the respondent. The OL is directed to take over all the

assets, books of accounts and records of the respondent forthwith.

The OL shall also prepare a complete inventory of all the assets of the

respondent before sealing the premises in which they are kept. He

may also seek the assistance of a valuer to value the assets. He is

permitted to take the assistance of the local police authorities, if

required.

9. The Company and its directors/servants/agents etc. are

restrained from selling, transferring, mortgaging, alienating, creating

any charge, or parting with possession of any of its immovable assets.

10. The directors of the Company are directed to file a Statement

of Affairs with the Provisional liquidator within twenty-one (21) days

from today. They shall also appear before the Provisional Liquidator

on 7th August, 2013 at 3 p.m. and make a statement under Rule 130 of

the Companies (Court) Rules, 1959.

11. Citation to be published in two newspapers - The Statesman

(English) and Jansatta (Hindi) in terms of Rule 24 of the Companies

(Court) Rules, 1959 („Rules‟). The cost of publication shall be borne

by the Petitioner.

12. A copy of this order shall be issued to the Official Liquidator

within 5 days from today. He shall file status report before the next

date of hearing.

List on 29th October, 2013 for further proceedings.

(R.V. EASWAR) JUDGE JULY 26, 2013 Bisht