Skip to content


Registrar of Companies Vs. Kt. Financiers Private Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtAllahabad High Court
Decided On
Case NumberCompany Petition No. 3 of 1975
Judge
Reported in[1978]48CompCas129(All)
ActsCompanies Act, 1956 - Sections 433 and 439(5)
AppellantRegistrar of Companies
RespondentKt. Financiers Private Ltd.
DispositionApplication allowed
Excerpt:
- - , as well as business as buyers and sellers, exporters and importers of all kinds of produce and merchandise. although notices were issued by the registrar of companies for making good the defaults to the company and its directors, they did not make good the defaults and prosecution was launched under section 220(3) of the companies act and section 159 read with section 162 of the companies act in the court of the city magistrate, kanpur. 3. i am satisfied from the material on record that the respondent-company has become financially unsound and is unable to carry on its business and has thus become liable to be wound up......or conveniently carried on by the company in connection with the business of the company. the last balance-sheet of the company was for the period ending march 31, 1969, but the subsequent balance-sheets of the years ending march 31, 1970, march 31, 1971, and march 31, 1972, were riot filed nor were the annual returns. although notices were issued by the registrar of companies for making good the defaults to the company and its directors, they did not make good the defaults and prosecution was launched under section 220(3) of the companies act and section 159 read with section 162 of the companies act in the court of the city magistrate, kanpur. the balance-sheet indicated that, while the paid up capital of the company was rs. 3,25,000, the accumulated losses amounted to rs. 5,38,233.30.....
Judgment:

A. Banerjee, J.

1. This is an application under Section 433(e) of the Companies Act, 1956. The Registrar of Companies has made this petition for the winding up of the respondent-company, Messrs. KT. Financiers Private Ltd., Lucknow. It was stated that the company was incorporated on 3rd October, 1956, and had its registered office at 14, Mahatma Gandhi Marg, Lucknow. The company was established to purchase, sell or hire out or sell on hire-purchase system all kinds of new and used motor vehicles, parts thereof, tractors, motor-cycles, cycles, sewing machines, radio sets, gramophones, cinematographs, etc., and to carry on the business as financiers, investors, brokers, merchants, agents, contractors, manufacturers, depot managers, secretaries and treasurers, managing agents, etc., as well as business as buyers and sellers, exporters and importers of all kinds of produce and merchandise. The object also indicated that they carry on the business of manufacturers, assemblers and dealers in batteries of various kinds and components thereof. The further objects were to act as transport agents, forwarding and clearing agents and to carry on the business of garage keepers, body builders and suppliers of and dealers in petrol, motor parts and accessories. The objects also indicated promoting other companies, carrying out contracts and to carry on any other trade or business of any description whatsoever which may seem to the company of being advantageously or conveniently carried on by the company in connection with the business of the company. The last balance-sheet of the company was for the period ending March 31, 1969, but the subsequent balance-sheets of the years ending March 31, 1970, March 31, 1971, and March 31, 1972, were riot filed nor were the annual returns. Although notices were issued by the Registrar of Companies for making good the defaults to the company and its directors, they did not make good the defaults and prosecution was launched under Section 220(3) of the Companies Act and Section 159 read with Section 162 of the Companies Act in the court of the City Magistrate, Kanpur. The balance-sheet indicated that, while the paid up capital of the company was Rs. 3,25,000, the accumulated losses amounted to Rs. 5,38,233.30 and the value of doubtful debts amounted to Rs. 3,04,789.60. The balance-sheet indicated that the total realisable assets of the company were Rs. 6,41.418.95 as against the liabilities of Rs. 11,54,485.10. The company's financial position was thus stated to be unsatisfactory and it was unable to pay its debts in terms of Clause (e) of Section 433 of the Companies Act, 1956. A show cause notice dated October 22, 1973, was issued to the company and its directors by the Regional Director, Northern Region, Company Law Board, Kanpur, under Section 439(5) of the Companies Act. The company and its directors did not reply to the aforesaid notice nor submitted any representation against the sanction being accorded to the presentation of the present winding-up petition. It was further stated that the Regional Director of the Northern Region, Company Law Board, Kanpur, had been delegated powers by the Central. Government to accord sanction to the petitioner under Section 439(5) of the Companies Act.

2. Although notice was served on the company and its directors no one has entered appearance to contest this petition. No one has appeared on behalf of the respondent-company and the averments made in the petition remain uncontroverted. At one stage, time was obtained by Mr. R.A. Sharma, on behalf of a creditor to support the petition but the matter was not pursued later on. However, the position remains that the allegations made in this petition remain uncontroverted. The statutory notice under Section 439(5) of the Companies Act had been served on the company and its directors. They made no representation against the same. The order passed under Section 439(5) by the Regional Director makes it clear that the company's liabilities far outweigh the assets of the company. As a matter of fact, the extract of the balance-sheet as shown in the petition makes it clear that the company has become financially unsound. The company did not file its balance-sheets for the years 1970, 1971 and 1972 or the annual reports which entailed commencement of prosecution under the provisions of the Companies Act. None of the directors of the company or the company responded to the various notices given. This indicates that the company is unable to carry on its business and it will be in the interest of justice that such a company is ordered to be wound up. The existence and continuance of such a company is not in the public interest.

3. I am satisfied from the material on record that the respondent-company has become financially unsound and is unable to carry on its business and has thus become liable to be wound up. I, therefore, allow the application and direct that the respondent-company, Messrs. KT. Financiers Private Ltd., Lucknow, be wound up. The official liquidator attached to this court shall be the liquidator of the company and he should immediately take steps to take in his possession the various assets of the company and its books of account.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //