Delhi High Court
Sukhdev Singh & Ors. vs Registrar Of Companies on 9 August, 2018
$~C-27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 09.08.2018
+ CO.PET. 748/2015
SUKHDEV SINGH & ORS. ..... Petitioners
Through: Mr. Risabh Jain, Advocate.
versus
REGISTRAR OF COMPANIES ..... Respondent
Through: Mr. Rishi Manchanda Standing
Counsel with Ms. Divya Singh,
Advocate for OL.
Mr. P.S. Singh, Advocate for ROC.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (ORAL)
1. This company petition has filed under section 518(1)(b) of the
Companies Act, 1956 (hereinafter referred to as the 'Act') read with Rule 9
of the Companies (Court) Rules, 1959 for complete stay on the voluntary
winding up of the respondent company.
2. The Board of Directors in their meeting date 22.02.2012 decided to
institute Member's Voluntary Winding-Up proceedings and gave the
Declaration of Solvency pursuant to section 488(2) of the Act. In the Extra
Ordinary General Meeting a special resolution was passed for
commencement of the winding up of the company under section 484(1)(b)
of the Act on 21.03.2012 and Ms. Kintoo Aggarwal, Company Secretary
was appointed as Voluntary Liquidator of the said company under Section
490 of the Act.
3. During the course of business with Mahanadi Coal Field Limited
(MCL) a dispute has arisen about the non-payment of full dues of the
respondent company. Hence, the said company had filed a suit against MCL
in the court of Civil Judge (Sr.Division), Sambalpur in the year 2005. The
suit was decided in favour of the respondent company vide judgment dated
02.03.2013. Further, the MCL filed an appeal before the Orissa High Court
and the Ex-directors of the said company want to contest the aforesaid
appeal. Hence on 27.11.2014 the Ex-Director cum Contributories of the said
company passed a resolution to restart the said Company. It is pleaded that
the said Company is fully solvent as the Declaration of Solvency filed on
behalf of the Board of Directors and last Audited Balance Sheet of the said
company shows a surplus of Rs.5,49,817/-.
4. Learned counsel appearing on behalf of petitioner has also pointed out
that the Voluntary Liquidator appointed Ms. Kintoo Aggarwal has filed an
affidavit to the effect that she has no objection to the present petition.
5. At this stage, learned counsel appearing on behalf of the petitioner has
relied upon the judgment of this Court in S.P. Sood Vs. Registrar of
Companies, ILR 1977 Delhi 474, to submit that this Court has the power to
stay the present proceedings in the voluntary winding up. Relevant portion
of the judgment reads as follows.
"3......Thus the question for consideration is whether the power to
stay the winding up exercisable under Section 466 in relation to
companies being wound up by the Court can also be exercised when a
company is in voluntary winding up. I find that the position taken up
by the petitioner is consistent with a large number of reported case.
In Punjab Co-operative Bank, Ltd. Air 1919, Lahore 305(1), it was
held under the old Act that the Court could stay a voluntary winding
up. In the matter of East India Cotton Mills Ltd. Air 1949, Calcutta
69(2), S.R. Dass J. (as he then was) examined the principles on which
a stay of winding up could be ordered and found that it was analogous
to the jurisdiction exercised while rescinding a receiving order or
annulling an adjudication in bankruptcy. There are some English
cases also in which a voluntary winding up was stayed. Examples of
those are: IN re: South Barrule State Quarry Slate Quarry Co. (1869)
8, Equity Cases 688 (3), re: Titian Steamship Co. (1888) W.N. 17(4),
and many other cases. It has been held in such cases that mere consent
of the parties is not enough but the Court should consider all the
circumstances. A leading judgment on the principle on which the
Court should act while ordering stay is in re: Telescriptor Synidicate,
Limited, (1903) 2, Ch. Div. 174(5). In that case, the Court detailed
various points for and against ordering a stay of the winding up and
decided that there was no ground for staying the winding up on the
facts as they were. The court, however, observed that at a later date,
the official Receiver could report whether all the liabilities and
creditors and contributories had been settled and the debts had been
paid and whether the members were prepared to reduce their share
capital by surrendering and cancelling their bonus shares, then the
Court would as at present advised be prepared a stay the proceedings
in the winding up'. Thus, there is no doubt that the Court does
possess the power to stay a winding up even when it is a case of
voluntary winding up. There must, however, be facts justifying the
stay. The words used in Section 466 are: "on proof to the satisfaction
of the Court that all proceedings in relation to the winding up ought to
be stayed. "Thus, I have got to find from the facts whether this is a
case where the winding up ought to be stayed or whether it is a case
where the company should be finally wound up".
6. Hence, this court does have the power to stay voluntary winding up
process.
7. In my opinion this is a fit case to exercise power under Section
518(i)(b) of the Act to permanently stay the voluntary winding up of the said
company. The Company is solvent. It is likely to receive funds in the
litigation against MCL.
8. The petition is accordingly allowed. The respondent company will file
all the statutory reports before the ROC, as per law.
9. The powers of the Ex-directors of the aforesaid company are restored.
The liquidator will hand over the charge of the said company to the
Ex.Directors pursuant to which the liquidator will be discharged from
further proceedings in the winding up process. After the filing of returns by
the said Company, ROC will mark the said company as active in their
records.
10. The Petition stands disposed of accordingly. All the pending
applications, if any, also stands disposed of.
JAYANT NATH, J.
AUGUST 09, 2018
p'ma
