1. This is a creditors' petition for an order for winding up of a company registered under the Companies Act, named Chitale Agricultural Products Ltd.
2. The petition is based on the ground that the company is unable to pay its debts, and in support of that contention reliance is placed on the provisions both of section 434(1)(a) and of section 434(1)(c) of the Companies Act. The petitioner has claimed a sum of Rs. 5,320 in respect of which a statutory notice as contemplated by section 434(1)(a) has been given, and it is an admitted position that the said amount has not been paid by the company. On that ground alone, the petitioner is entitled to a winding-up order being made on this petition.
3. Mr. Sorabji for the petitioner has, however, further contended that the company is also commercially insolvent within the terms of section 434(1)(c) of the Companies Act, and, in support of that contention, he has pointed out that, on the company's own balance-sheet for the year ended July 31, 1966, its total assets are Rs. 79,05,290, of which Rs. 43 lakhs consist of amounts invested in a subsidiary company named Chitale Sugar Works and Rs. 20 lakhs have been advanced without interest to the same subsidiary company. It is not disputed that the said subsidiary company has not yet even gone into production, though registered as far back as the year 1954. As against these assets, the company has liabilities to the tune of Rs. 60,12,285 as stated in paragraph 6 of the affidavit dated August 18, 1967, filed by the petitioner in reply to the judge's summons which was already disposed of by me. These liabilities to the tune of Rs. 60,12,285 which have been set out by the petitioner in his said affidavit have not in terms been denied on behalf of the company by Shrikrishna Dattatraya Chitale in his affidavit in rejoinder dated August 21, 1967, as Mr. Sorabji has pointed out. It is unnecessary for me to discuss the financial position of the company any further, in view of the fact that it is not disputed that the company is commercially insolvent. In fact, that position has been admitted in the affidavit of Shrikrishna Dattatraya Chitale dated August 11, 1967, filed in support of the said judge's summons. On that ground also, the petitioner is, therefore, entitled to a winding-up order being made on the present petition.
4. Mr. Mistree, who appeared for some of the creditors, has, however, submitted that the court should, at this stage, instead of making a winding-up order straightaway, merely appoint a provisional liquidator in order to safeguard the assets of the company, and in order to make arrangements for prosecuting the appeal filed by the company in the Supreme Court which is still pending, and on which, according to Mr. Mistree, the fate of this company depends. I do not, however, see any reason why, in view of the strong case for winding up that has been made out by the petitioner, a winding-up order should not be made by me on this petition.
5. Under section 457(1)(a) the liquidator in the winding-up has the power to prosecute the said appeal if he can make arrangements for being put in funds by the creditors. If any scheme, which is practicable, is brought up, the same can be gone through in the course of the winding-up proceedings also, as section 446(2)(c) clearly shows.
6. In the result, I make the petition absolute in terms of prayers (a) and (b). The liquidator should, if it is possible for him to prosecute the pending Supreme Court appeal on suitable arrangements being made by the creditors to put him in funds, make all possible efforts to do so.
7. As far as costs are concerned, the costs of the petitioner as well as of the company will come out of the assets of the company in two separate sets. The shareholders who have appeared on this petition will also be entitled to their costs out of the assets of the company in a separate set. The other creditors who have appeared on this petition will, amongst themselves, be entitled to one set of costs out of the assets of the company.
8. The winding-up order passed by me to-day should be advertised in the same newspapers in which the petition itself was advertised, and should also be published in the official Gazette.