Oil And Natural Gas Corporation Ltd vs M/S Hmt Limited on 21 October, 2009

[Cites 6, Cited by 8]

Karnataka High Court

Oil And Natural Gas Corporation Ltd vs M/S Hmt Limited on 21 October, 2009

Bench: B.V.Nagarathna

is: 'i':;;::. iiiiﬂi <..:<::.um* me' EiAi~;'?-£A'§'z%i{A AT uANGe;;;<)§e»r_£;~w.vV

:32=,';"£:.;_) 'mm: 'mm :22?' i}A'f or <;€.;';'0;~s;;'i~?'_¢,/:€} <}":;V.'  .

BEFGRE 

7': 11; ii(J§\f'i.iL££ Miss. w3:';cig L3. 5.-z,%\g.;*aG;.§1'¢ . ?1'*':--.: :; 

cm 1». 5»: Q..r9.i.»: ; 2064. _ ' "

BETWEEN:

am, AM} i'€A'i'i}i€AL {..;As"~       
{3{)i<'F{}i€z*%'I'£O£'€ um :;r»a1=;.,c3'{;:;z>;':s 1  

<;<.:»r-e'1*:msu':'<;zeY .::*;<uv:::2';;;;*»:'.{" ya; at kg: "mu  1'

mg, i3iiA'v'A}'\% m=;:..;1;_==A i.}Ui'~E:_2--.4¥8 {}(}3~.f* V. 
i~5§:}i~'£~ii£S£:;§\é'i'1Ji}L5?£"ifi".:} 2  _  j 
1::;<'.2::{;am\.:::: <_>:iii«§<:;;is:--s.'. »   " -
352:. M 5. :3: ;,;~a;5e'z~%.;. ; V V

 ----  ._  -<:.-- = .'..ir«'L§"i'i"i'i{}f~J1:2i~$

€13'; ::~..?:a:::;". _§3Af%3A'%'_5§;i§F;§$%£$.#%';':3,:I}%;§.'i'ii.;)

A335: 5 ' » _

  '  ya; s;;m~% s_.:':~.=z1f:';3u  """ H
 gs. ,c:0,M;?A:QY4:%N"c_Qm:>oRATED UNDER
'THE. CC'.E'§'i'I?i§'IP€'i-E5"; ACT, 1913 was

i€L*:{§»i.:i~"'£'i_§-£%€i{§i} :;;=:\::)1::;~:*:':1:3 i~'£<?<JV§8£i)NS
U?' z.ji;:::; £.1\.;>§vjm:~e1;::$ A{;"i', 39:39
HAVEPSG '*I'£'S'REG}STERED QFFICE AT

 _  'u_§¢;§;;';* szsmrzarq, 5:9, Bazmzw RGAD,
 ._i$g%E'i~!§}F,L{}i€i§~5{:U {:32
~._;:;5--;ir*;\:";;::s:::§~e*:*:a;.} :3'; rrs

  :v;;am{;zm; :,>;1«z1:;<:'s'=<;}:<

 £€i38P{}Ni}i§f-Vi'

 ESE' SK}; JGSHUA SEMUEL §'{}i=? CfAi€I[§1~'I%*'A A?-$3.} 

Tiiis {ii}? is {Had E1£'1£§f:.£" Sectiuii iiiﬁiife} ailtii {$5} :31" the;
Ccmpanies Act, 1956 praying that for 1111!': reasong stated
%;
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i'i1€::"ei11 this Hazﬁzie 6:31:14: may 33:: gﬂcased to: wmd up the
company M]s..1~IM'I' Limited unéer the pmvisiozm of the
iiozxzpaniss Aet, 19;'E36. .

Timis C-Oi' haV}.i1g iliﬁélii hearczi and reseﬁrved fer  _
this day, court proncunced the foiiowingz * .   ~

QEDEE

'i'};1iS peﬁtiozi is filéd #33" a 'i';j1}§t Cgiliesii "{}ﬁ'&_ 

Gas {3m*p0L'a1:io;1 Liﬁititftii   ._

i+'u;1d 'i'mst" seeking WB1dingV;a.,;§"wf thé."x*:%$.;2s3;):(i¢;i't;V(io:2:j:§a11§? "

iliiiiéf the §}1'€}ViSiOI1S csf §$ecti01:;.4§I  (1)  ﬁat:

2. '}'his peiiiicsn is  t#5~f,E:é;:..'ij.§3E':1'ty i'ﬁS€fVC{§_ in

Campaiiiy TP§3Tti{if::n 260$  ﬁle pe1fi':i<:;ﬂer iuarczin to
iﬁiﬁatr: iiﬁsia  inst that 1153 p0ﬁd€:z1t €.:::::11pa,s;1y in

tha §5f'ﬁ?f611f  'i:§:u;  .a7;%§.sp£5:1{§éi1t faiiing 23:: pay any; of 1:115

 V'  _AL:1s%a}__'i"£z:::,&:;1t3 as  in the: i3011i§3I'¥Ji'ﬁiS€ pﬁtition fﬂéd in

  g:§;fnpa;~1y}'éﬁt§n;g mg.24a/ 20006

3}  &¢;::3ii§;§;ig to the pétiiiaizézi', thug respomient campaiiy §s

 ~.:a §f'1i§}i§x3V':i;,;iIi1§t€fi Campmijg haviizg its mgiatereii oﬁiee at iiM'I'

3.a_11%§§;*, Beﬂarg' iéoad h£§3?§.i1g 33.1 autiaorizeii sssapiiai of

  :é;;~.-.23:3,<;o,€;«:;,:;00/- divided. um 13,50,000 équity Si1iart?';S of

 i{s,1{}/-- ti-:aci1.. 'Hie issued, Suﬁscriisﬁd and paid up capital 9f

the :.:;::ai11pa:1j§r £3 i€s.12{:,{>4,€;.3,4{}(3j-- divitieizéi into
.i2,€s€;,43,84»I}e:;;ﬁ1ity S.§i«z§.i'€S of 5-£35.31)/- ziacii. Tim (£133.33

32

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esziajﬁcts of {ha respondéiit company are in carry out thﬁ

busiiiess {sf mﬁchmiicai €13-:gi.11€::5ri11g, lilalilifaﬁfllfﬁ (}f as}; typés
of implizmeziis amzi maehinary aaci to 'trade in ﬁ1a€;iii13ut':i'_§?

iiﬁpitéﬂlfﬂlts, i1arc:iwarc': of aﬂ §:§}:i}§3.S.

3:», Accorsziiag to this patitioucr t£v1;r,"&r:*;'tsas«*i1'§.i:=:  

{jag (:.<:sz:s;1:3zis$ic:::1 had estabﬁsiiésii  "   

iimpiayeas Frevizlﬁiit Fmid £'u::_;3'i:.§$io;1a*;" E;-c:§,_ 1€s}i3'2?. "az;1e:i":t11& " V

game of H36 said f1ii1€iV__WaS   "&.V_f§at{11*ai Gas
{fOifpC)1'a{iOﬂ Liniitcci iﬁmp«i-§$fy'3e$  P1'::IVid€11t £~'um;i

'§'m:$t with eﬁect f::-om  "'i'*1:e';§é;tif:,£Qj:E;' iinagi 3:1-wasted

3 sum izgf Rs'. 1V,V(3VG;iﬁ;s'.:5;G£}'U[¥'vW1tii ﬂif.' £"E;'SpOl}dt':,§1t campany in
Z':€:£3U'~3rb  £EMT. ('1':l.'s§:a'£:~ie},_  t:s;§;{$€.:c31_§'ed, rvszdéemabiﬁ bands on

29.?._fiE%§»4. u§i5ig1§;€~§'§€1&  'n=:s.j';o11dm1t iiaiied to coiiapiy with tiits:

' "  _;;§;';::é:'0%f"LtheA-- bend, ésiéfﬁtoiy' iegai 11{3tic>::~, datczi 8.7.2000 was

 'S§{'ﬁ"?s;§ "ti4°::1€~ §*ia5{§:«e11d€11t escimpany Staiiixg that it was Jiabié 1:0

 éii1:iié§ :-.::¥f:=Vi§$,1,41,i§ifi-,{H}i}j~ in iﬁﬁpéﬁi of {£16 ijoilcisi.
A£iiié§ug§1:§;ii5;'V'§'«E$p0:1d&13t aiixxiittsd the iiaéxiiity, it faiisd £0

«. '   "t:§Ais;:§1a;rgz';"if;s ciébt amzi <::<:«:13equﬁm.iy, the §eti'£i«3:1 for Wiliiiiﬁg

«   €.j'-s.:;z:1pa;1jy' §~'ét£tie:sn P617-.2-48f 2009 was ﬁifid iii Whicii,

   tim ap§:ws:a1*a;1c:é: of the msgicildent cﬁmpany, 3:.

 C{}ﬂ1§_3I.,'0,il1iS€ was 3.i"i"iVf':i:i at anti {Em compaxay pﬁﬁtiﬂfl was

ﬁispoﬁéd af in €;:':rms {hf fig: cgmpromisc on 2€;.'?.2<j£}L



£3. Subsﬁqueixﬂy, tiiﬁ mapozziiexzt cc:m§3a.£1y in -:x::mp§.i.a11c€:
Wiﬁi £111: imrms of 111m c:<311::pr0mis6 had aiioﬁtci 1213311 se<":m"m:i
izaoncis Eb; £~is.}_,1iJ,{}{),GO{)_i ~«. ii0'Wf:V'€:1", it defauitﬁd  the

payment -.:rf i:1te1"ﬁst 011 f£"'€:Si"i S€<'f"z1i'€{i imiid £131' 

a moiiﬁt iii tt:r111:=; of clausst (vii) of the coizipzniziifsé  ~

"i'i1.-at tilts: ifispﬁﬂdﬁﬁi c:o111pa11y is ﬁgbié «:g*'pa:;1ii'ia;:££;1yea;~£;; 

iutearest ev€:;:32* yew' tiii the daiﬁ iiyf L?1atéiz'ii§§ ari" 

aiiimmt at the rate of 10% ii):-.f_£i1£: 15c:tjtio11cer{.'i?é{15£c£1VV i*g § 1151s  >

faiieci to pay. in ﬁiua ﬁ16aﬁWi1;i;f:V«_.ff;§i*€:VV re::;pe:i§*iE11t églﬂﬁipally'

iSS7E1ﬁd   '::dE"*;":1*ivé11;r";wpiacemexit 110$ aiiotiiieiﬁ 0f
SéC"£ii't'_i€Z{"~,._ :1-;3;'";~<:=.c3:'1:£?é1*iL€4iVE;a»%:%;V,A"i:::Ei'€:e:;i1a;:>ie ﬁends <:;f the faeﬁ vaiilzi

(sf i€s.3;£L(§1€§_,_{}{}{)[;' .&é;A:;1iV;3Fi11'$ua31t '£0 Whicrﬁi, tize pei:itio;;1a.=:r

 €:0i33~f1:rii1é1* ir:v¢st5:;d a 52.153: csf Has. 1:'3,()U,{}0,{)(}(}i -- in "mi:

  %}i:,s;::,€_i3  rx;":$pond€::1t cgmpwzy issued a h§1:ie.r for

L a.i_j:Lii%;;_:;s~e§VV1Z'i::'AV':_,~.",a_1:c;s{;:';"£'"E,8.i£{}U§. in {aspect of whiciz ama:::u11'i: ma

i'es;§i3t1d5iii'c¥§§;1:;3a11y £3 iiabiz"-: 'E-:2 pay" at {Em rate of 12% paw

 $25  gf maiz11'it§; {3} the pvsﬁtionms. aatcesiﬁiiig its the

 T. ' §:=¢t:i:E::§ﬁ€:i* Siiicé tiiazf: r:':t':~:pr<31:s:isnt emzmazzy has faiiﬁoi to make

 2 ..;_:2:§}r:316;2"i cf iustaiijnexxts «sf i:1t:=::'x:st 011 "am wcurtsd bends

V aiieﬂziéd fttsi" i€s.L1{)§i}€),{}£}();'- arid aiso 0:1 Sﬁiiuiﬁﬂi b0i}{§$

aiictieii fog' Rs. i€§,U£},U{},€_}{}{)f», a statatwy :1<3tis::& was iﬁﬁfiiﬁd

$3}; aim gzstaiéiiczgzm' on 2,1.12.2i}{}~'5§ umrier {£16 Camparziis Act
9%

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s.e:ekiz.1g paymerr: <31'? iizzieresit 0f £€.'s.';z'i',S(},{){}{}/ -- caicuiatéd up
ta 33..i.2{}{}4 in £'€S£)t'iC'"E of if)'-/u s€:<":u;:e{£ bonds cf

i~?s;.1,1i},€)(},{){}{}[~ zznd also iﬁffiiﬁﬁi an {.116 ssaiii i.nf£m'c*§;si'f.--_ in

farms of clause {'11) of the <::omprs:,:;21is& petitiml, 

dﬁiliaiiidfjd paymeiit of $~$s.4,?9,52,<%€;Uf«   V' 

unpaid i11'£erv5st of i€s.4,L3;'"S,4S,2{}ESf --'   54$".

1:29;, pa 12:13 uizpaici imterest at1'~:es--..é:»%:~,ua,2:3;4;.,. «.

31.1.2004 and a ma; sag:1.._g:;:*.._zes..i§,a9,9$g;9j3{5;:¥V"' 6111*'

31.1.2004» was €£€:mand§::i as pt;--:*.A s§ta':%;:.to1jv* :id£icﬁ.;$1'<3(iu:3ed

33 A1111€:xu:x=:-§~' mid the a{:£t;1aa2¢'l;:<}i'g'§neV:i%:A_efiris at A:1:;1e:»a1m--

G ta {£1-:2' ';3ét;:;g§.;=:. "ff 

£2. '§'i1€: 'i'2:~.:=sg:c:;;1c;i¢v::1i'i~--,_'¢t3iﬁ3pa1:}? admitted its ciesféauit iii

 ¢_ pay::13.=:£1;t_fi3:'_i.z1tm;é':3tinvtmitzzs vaf the. ietters of aH0t1ii6I1t an

 t:5i§Z?1;i3€;1:1{i}.i'E,_v£'V)i'".ﬂiiéilgéiai ='f:€Jl"i$t.i:"8.i:i'1iS mid stained ﬂiat may Wezre

maiéiiig €;§:l'§.'€§§f§-§S .,73:Vi£? pay' the: Gverdim iﬁtemsi: 23:1 fizz: bsiarzcis by

«V 3:3  18/ 23.3.2904 j_3£'Odi1t;3€:d ai ﬁ1iii1€X"i}i'€~§L

 is 131% pefiiieiier mg E3-zrxnci iiaiagi 1.€:§2U(}1 h&Vii1g

_  1i;r»f-,:i::i"iies.'i 0:1 1,{z.2€.)(}4~ €315: i"€Sp0.i1df:i"f1i mmpany was dug ta

 ":':é'ié1r11 théi said a;::1<3m1t cf i~2s.1,1{3,{}{},{}{)G/-- and a

U coiisaiiciatéd 3am ctf i-$s.€>,4i5§,S5?,834/» was dun: as an

},4.€:.2{3€.}4 3% $tatr:z:£ in ﬁiiﬁéxﬂif-J? 



- 5 -
T'. Thé petitioxzﬁi" has ﬁimzher mated in 112$ compmiy

petitiszsn that the: 1'ﬁSp0£1€i€5l1i <:s:m1pa;1y is in fimimczial xii-stmss

has incurred loss eoiitimiously for the: last ten yéaré' 

"iifiabiiﬁ ta} meet its <:ur::r::m: Gbligations anci £1&:1a>::"i1a$AT§5c:ééo:iit--T "

ca3131i}i€§£k:iaii3»' iiisoivexzt and ti1emfi3_ife., is 1iai3iae 1icsC§;e ir:c§:11:1i:';_V u

up as also 01': just 3.1115} fiiitlit.'-Zi§3§t3 g1'<:«3:113.::i: .é; ~ 

8. in :'s:':s;_3-(3113:: £112 t;i1:.=;  giétitiiu, :ﬁ'1é ifﬁgﬁﬂﬁﬁilt
compmzy féad its a:t3i"i{€%1ii'it  %.§;;:.=j{'~--fj1e  E3 not
;:1ai3:1taai11ab£f; as the ajnoiirﬁ;   ;_i.%;:t éi dtébt and

tizei'-e17;2i?:; "'§-'s?'-'T.f*ﬁV.i='i:;¥. 11€:ﬁ§:5ait1*ac--t $:i1e"p:rx&i$i<311s of tin': Ciompa mics
Act. i--t'i;:*t£15i' ﬂ':a'£:  j5:?€ii1ti§ji:s:=31"'£)c:i11g 3 '£'rL1st f0I"£{1€Zi{i by and
iiiﬁiliﬁi' '€.§.}(3VV{:§.._3f£.'$V:*i%°é'li'_1:§:3;i;'. awgjed by ii:-:;vm*itu1::~::1t (sf iizdia 213 per

c:irc.::§iéi" "fia'[v'E:C£  1:993" issued by ﬁle; {.3i3Vi':i"£1i].1ﬁ£1t 92F

 'i:{£ié::. d'i§§;3:its$ bﬁtwaén urns: {$=uvm"1nn€~:::'£ i_}epartm¢1:1t aﬂd

I   g~;:>v€r£:me:1i d€§3aj:"il}ii€'i£1i mzéer ;312§:2£i<::

€.:1€&;pris;£:~ £:Ii;1jii:S;'i Em croixsiciémd by E3115: {iaiaiuet §33€£':i'ﬁfa1'.i&':: as

 _siatgr;i .. iﬁyf the H:.:»;::'bi& M_Su;}re:1:& Lhmi in {ﬁe éiesscisiga

'.. ' ~:é§§}d1--"i;és;i in J? 1991 {4} SC 1338 arid the 33.3363: hag net $3561":

.  ﬁ.«.:r;i::' E;1 the instant case $33; the pﬁiiﬁ-Bikﬁi'. t"'iCCGI'{iifig to tins:

 " -~i'&:S§}0i1€f€i"1fL ii is 3 {}c:v€::*:7.m&:1t of iﬂciia o<3111pany with 98%; 9f

VV {£16. She'-:"11'€8 héiii by the Pregiiieixiz of i1}.(ii& aﬁci aii Dim-::tc;w:'3 in-

s::i1a;:g& {sf fiié ::iay-'ix::da3; aﬁaiiass arid maizagemasrxi Of '(Em

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compaﬂy am apgaiiitaii by the i~'rc:sicie21t 13f iizdia; that the

:%$§s0{1d&;1'€ camgxaﬂy anti its subsidiary' has az3:1ua.§ i11£1}

saver cf "var 4&0 a::mr<:';s and over 13,600 e::;:pic;yc*:es...%1jr  V.

xxxmztiiijsr saiaqr of 165.15 (mums is ﬁehig géajd  is tic  V' 

questigtan cf the cempany being u11zibi%:"t::« 'pay  

110:" as filié petitiaiicér simwn just __éq:;;ftab1i5_-vgxisanfidsij'.

the company it: be 'we:.nL:1d   p¢--t;t£x}x:f {i¥éi1ta; ins 'V

disputed qucéstisz-:13 of facts Whii':'i'1  '{0"§§g;».aciji1{§iC&tf:d
by the déiaﬂﬁd cvisziexiéiéé  a.::i1}_._v f':f{:§r;*  1=::=:asc>1:e. £11343 the:

mmpmv pemaa:ria_ 1iab.;e;":oVL%?~:=.  ;:£i$3%3i$éx:é;'; "it is 2.130 statcd

by ti1€::VE&sp€ji1c55<:_:11;  c':i'ff'c3:ctWc:f windiizg up putting 311
and to '(Ears E:--usix::::SsA:_L§3f['ti?.:§ 'v.:s;ri11pa:1y i'ii'S"£ii'{'ii"1g ii: i:;';1r: 1033 sf

:3:a2pioj¢me:1t €215 ses€é'1'ai'v_tE§iG§1$a:1ds of miipioyﬁes anti Lass of

3 V'  .pi'c:>'<£ij1itiz:ti§:::;1 ~vi7§?i1§C§£ 'we-aid aﬁsct ﬂaw: barger i§}.'{ﬁ1'€Si of the

  'axiézi,Vﬁ1at'~.di$::1*f:tio:1 <:a:tm<:»t be exmbised in fave::2.u* of

ﬂie gjiafiiiaziiiéif iii ﬁm instant case?

<§,  :%s. fai= $3 iiiﬁ -::"utsta:1<:ii;1g pajqmeﬁtrs am €:0ﬁ€:fi1"£1E{§3, the

 . Vbr3f§;,}_¢7>:3{£éi11i stafrsci fix,-a£ in is-5:sp€s.:i': Gf bexxds for :21 31113:: {if

  i'~?_é:§:,1'ji{3,{}{),€.}(}i}f-- aiaﬁg with i,iT&'t£i'ﬁS'€, :23, sum of

 " -~i+:%;.}_,1%,8{:,2.'_§;% had been ;;>ais:i $0 the p<3f.,it_%e:mer by ijemand

ikaft £3é:aIiz1g £'~i0.244~--'i~8{)« éaiﬁii i3.,4.2{}Ui3% 331:1 with rﬁgard; his

tém Oﬁiﬁf imxicis bﬁarizzg foﬁa :"*é«;:aJ?{>{3{}i tim same: W-esmigi

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- 3 -
matum 0:1 1.8.2006 and with reganzl to the ii}'[€£'f:Si pértian :3:

sum Qf §\'s.2,.f3E%,E~}1,?é>'1[- was paid by 23 d&:333,£1d_..§_i;'a.4:'i

baaring i'~Eu3.2444'.?'€9 datétd 5.4.2305 as part pajfilltiﬁt

p&ti{£::;n6r's <";i.:1'"I'I:g} of intérsst. Asseording t-3 tiirif-'  ~

campaay i~'1'a:;vis:i<.=:11t £~'um'i 'i'rust of o;1iﬂ3'::_1'e11t 5 ':.':V<jirifi.s;§ia:1ié:.*~v'*s2t;zi*i1c,~v 

had invﬁsteci in it hard gist timir s:iue:~i~:._seﬁ.tic:§ £:)é:»ﬁ_.m=: f:i1i'$ 

amt: aim") Dthﬁi' P1"-;:m1dm1t £+'1111:i sf:.:1%:.i1:i::€3s- 11g 5t"'zis.p:3;f:3e3t_§§i1e§ii  ;

aiij £Z'€fJ?.1£'i.. That 3 S3333}. {if RS.1,é$,ﬁ»}{}a.§}UU:/.-"  $30115; hﬁkiﬁlﬁ

haci £3661: sctﬂed iilitixaf a  ﬂzerzrsfom, tile
mspoizdent cg-mpaxiy stat¢g1"t%1Vat'V_j{§1:;:  pctiiicxta ouglﬁ.

:0 £36 CﬁSH1iS$§i£.s ':::('\..:. By 3.31?  _ i:'3if§':/l"i[.?_=?~iI?':i'iZ the i"&3p<:r:1cie:1t

campaziy géﬁféz. a:f§:£i::iii;3friQ1i' Wiﬁi 1'i;g.:-zmii to 'the a nmuﬁts

paiif by it $:1_b$ﬁqﬁc;1f  ﬁling of the cumgamy petiﬁmx.

 }.i'},  iii'  to {£113 Saixi f111"£:E1r::1" aiﬁciavit, ihé petiti<:u1&r

uﬁiéz;-§i_' _z:;E:{§&::a§tio;1s Stating that the a zﬁauiit «;::f

i{&i5«;.S9,T§"8,i}.i4i~ made 1337 £316 Iﬁﬁimﬂdﬁﬁi wﬁigaang" is aziiy

 '"~._ ""£.::";§*s.2*;:ia:":i%v.;§a.,zi ciiﬁcizargﬁ {sf {tie msp0:'1s:ic::ts Eiability agairxst

 a£:>r:a$ai<i bonds and that a baiaizaé of i€s.f»,34,Z$0,'?€.§{}[-

  VV  due as :31} :3}..:3.2;0{}i$ anzi i.x.1t:res1: after that dais and

 maturity 2313163112135 was else: to bé adciad. 'i'£1em is 0u.tsta1::x:ii11g

aiiiﬁiiiiis to be paid in }.'f":$p€C'{ af band ijaaririg 113110 f~a'<),?{}Uf.3?'
{}..{3':?'»i; EEME' i::<;3:1r:£ i3{'ii}--'%} as: wctﬁ, as faiia ?~§Cs.7'{3{}{}} (12%: iiiwi'
%_§}mr.



bond) which was to mature on 1.6.2006 and that Whatever

amounts have been paid has not been as per the cont1'ac*tt.ial

obligations and that the further affidavit is  '

incorrect.   ._

11. By an order dated 28.lt.:._'Z'CQz5   w L'

both sides admitted the the
publication of the  (jZ7.tpad:Ve.rtisement in the
"Hindu" newspaper on fiiting the date of
hearing on  the said petition
was taken   Vfpfherteafter at the instance of
the  time was granted for
making Vvof--,.i:'1:'i'«-étompliance of the order dated

22.3.2905 twd 'tdeEX1etnd.. drafts dated 5.4.2005 for

~'=,,.ﬁs.3;»59,3?8,01.4/~ t§:é':4d-it paid. Thereafter the matter was

frozrihgtime to time at the instance of the

respondent' tceinpany for settlement of the dues butlsince the

"same did not happen. the matter 'was posted for evidence by t~lb_i"detr"tf£ated 23.6.2006 and thereafter posted for arguments. if 12. I have heard Sri.Basava Prabhu S Patil} learned senior Counsel. with Smt.i\lalini Venkatesh, learned counsel for the i1()_ petitioner and Sri.Joshua Samuel for M/s Cariappa and Company. learned counsel for the respondent

13. Before considering the subinispsion .o1"'thej ,resp'cCtiveu"

counsel on merits, it is necessary to cc_s'nss.i:iei*..the submission of the counsei for the .responcle:1_t' corr1paAny..V_V_onl§ maintainability of the companyHpeti'tion. l

14. A point raised respondent is that the ":~a"igo=vernment company Within theillof the Companies Act.

ThoughthVe' company incorporated under the Provisions' of is nevertheless a government company clo'ntrollec'3. the Central Government and though "V..v_the':p_j'peti.tioner néea~----n*ot make the Central Government a 'pVai*r;y._ "vth'elv4"iic:ompany court has to notify the Central Governmentjj_hefore an order of winding up can be made. » ~._Counsel for the respondent has taken me through the ' Memorandum and Articles of Association of the respondent lwcompany and also through the Provisions of Industries Development & Regulation Act 1951 as well as the Government of India (Ailocation of Business) Rules. He has 9;.

f.u~"' . ,., also relied upon the decision of the Apex Court in the case of Oil 81, Natural Gas Vs. Collector of Centrai reported in 1992 Supp-(2) SCC 432 "

disputes between Public Sector UndertakirlgllandfvIlriion of ll India to contend that the matter has A.ijeliirefer:redll government. for resoiuiion of the'-dispute. He has =a_lso..stated = ' that since the respondent Coin-pally isxa the meaning of Article 12 of cannot be placed on the same footing as or a private company as lptzndert Companies Act and has suhrnitting that a petition under is not maintainable in respect as defined under Section 617 ofthe Co"mpani.es Ace"

said contentions of the counsel for the respondent"she:iiii be considered and answered, counsel for 'the respondeiii, company ought to have realized that these {contentions are outside the scope of the specific jurisdiction

--.l.70f"t;he company Court dealing with the Companies Act and allied acts. In the instant case, counsei for the respondent has inairily focused on the maintainability of the petition and the requirement of ordering notice on the {Janka} G\0V€1'£1ﬁ1€I1'¥Z raﬁzer than subnﬂtting on the 111€;i1§:;sxT.gf tbs 333:3. This Cﬁilﬁl would have been beﬁcr as$iéf,6{£.'_'ifj: _ iearnad 0061:1361 far the nsspmldmat had "

detail on 1:113 1126;'-£ts of zsxtlermg Wi£1ci}i:1g :13f;'ii:~i1.¢:;;_'I'{3{'3'Ji_')i3ﬂsf#€'I§:1i_ f company ratiimr than raiﬁiﬁg Wiigﬁy i.i'r::£é\':~sa1;1t <::¢::3§:i:-:-;z:1Vti};:11é;. '

17. At the auisset it i1a{:.:-:~';~~i:g:3 of the {3m1siit11tiv:;11 caf mcziia is .A'g?f""'¢311f01uement of fxzxxdajneniai Q.-ﬁﬁon is ﬁicd llﬁdﬁf the Act and thcniriizm, Wilﬂé 1111:': within the swept: of zarticie 3;:;4:€_cei' " 33133.6: cannot ha taken int":

c0ﬁsk1e:'ati{:¥13_'_AW,£1iit:.._ with the Wisidiug up of a gevesirilﬁéﬁi con'1j)a:1yj.____&¢.3=ecﬂo11 {:17 of the Compaaies Act ¢'£e:§:":'s-;:..n.e_V3 3' gzayvfﬁziggezlt caompany. it can be either undar the _§{1;'ié.'§i:€:ii§§:}:"_'g:sf Statﬁ Gsjverument or u.u::c£6;1' the Cmiztrai _ {_.:£€3'V€'1i.;i:§I.T.1C'iI:it.."..V§i';ji"1£3€ this rrzsgxjndcnt company is one cuming . ti1§§'ju1"iS{ii¢tio:1 of tim ijeiitrai (3m:e1*11mm";,t ami it is its act in aessmtianoe with the gilififiliﬁﬁﬁ and pa-Wciﬁs and instmcﬁons af {"2336 Céxitrai Govsrnment, in my " Vviﬁw, it is mt-i necessary that notice shoukti has issued to tbs ()&::1'ira1 (}<3vm*m115_1zt Eyaforza pasgsiﬁg an Gfiiﬁi" of wiucﬁslg up, fm' ﬁrm Siiiipifi .t"t;"faS{Jﬂ that the Qientral éievmumeiit would 110: ,5 :,/'' ..;4- Madras}, .3. Gowcrxlmmzt Company wag ozﬂczned to 1);: up because Qf its iaabiiity ta pay its debts, symb::gi;is<=..§_:£V' "act that it failed to lmnnur the statutory b said that a substantiai Gove1'nmerit s}§.é:1'¢fis3££i by itseif aﬁonﬁ S6C"i,}.1"it}-" to cxﬁdimrs éia{ﬁ€._ti1e to produce any detaiis; of its p;>sii:iQ1i;

a presumgetian of bad W513 raised axxd an «antler eaf 'i'}1erefom, the cs-0ntc11tim:z of" Eﬂﬁigicjﬂiielit that Gﬂvernmenj; crf Seetian 61'?' of the Act évinding up pmceedings e1:unciz:i1;ed--. Act uuder Section 433 reaci with Sactimi ~34-i_34 'H1161 Lgthe1* pmvisicms is 1"ejc«:x:ted. '.,i1§c§¢r thc xtircumstances, a pstitiou Ilildﬁl' éisssction Aéiijiéiiz) z";§j:t"fG:* winciing up of government company is £na:"11"'4:a1n"' Vabie: furthér ii: is um: ﬂ€Cf3SS&i'§r" to iﬁsuc Llotice K Vt-3_ thus {:'c:;£t1'ai Goveinzximzt 0:" the Stair Gcsvernaieni as the T 'Cass. may be, Whiie r:;sr;r::'cisi;1g jurisdicﬁon in the matter 13f Vggzidiilg up of a gma'e1'-ﬁmmzt company. As aimady statéd, axﬂclé 12 of the: ﬁsanstituﬂon of imiia $133130 rebvamx: with ntgaxd is the Winding up of a govmsnmﬁnt company. -17- has imcome irisoivcnt aﬁd it is a ﬁt casé where: disfgiiztion must be exerciszﬁd Imcier Smrtiorz 433(3) read aria: 434(3) 6:. (0) and Sectioxl 433$} in favmir of aiiii b U163 respcaadelit company ought ivcuziai L-'I;p--. it' just and equitabiﬁ 'to wind up the :'r;3pQncie11.t jg::g51n;i»aj:1§: 0v1:{ accﬁuut -:31" the suetxtressive 1oss@;$""that it and fhé huge a momzt -af 221s3;::¢j; ti1fe:.*i;"iEA i;é'£§}£lE'. is ' various pc=:r's<:r11s and entititzs.

2:3. £~'€£ cgﬁnéavg', ti:ic -zaompany has siatr.-"zd cempany patition, the beads :*$;;1at:i 'that aftar the ﬁling of the ~ have: been gajd by 111% 1'esp-Qgidusjt tczlﬂie pﬁtiﬁﬂilﬁf and that the company"

pﬁﬁﬁts in the years 2{}£}£3~(}4 up to ﬂit'? year 2G(}f>~ 9f delay in the paymcmt of the dues in féﬁﬁpéﬂfvf imtiticxzer' hefein. it caanat be that a ' foi9=JsTi:3::iii1g up has been made out by this pﬁtitiﬁliﬁi" and {V"'§i1cgfjef§';rc, the peﬁtion ought to be dismissed.

243. Tim: decisicans réferxtad ta at the bar have been Cs':ii1S5£§€I"€f1. Pram the ﬁitafiong citai at it i?}(i'EC'01}Il¢35§ C163}? that tile mmedy mxciar Sectiorz 433(3) évf the Companiés f -13- Act is not a matter of right and it is the discreti011 r:---f_ the Company (hurt which has to be uexercisﬁd in with {aw befmre passing aa order of Wi:1cIiI:,g'* 111:»: "

appropriate case. ixmbiiity to pay_;ii€bts fmm various facts and £,%i:'t:un1sta11c5::s ipém iizcioécfnuiévéi be CUI].$I1"'li6d as an appmp1"i:ité'*--a;fase flaws" wh;d'5;ig{_up:... it is * }' siecessary far the mmpaﬁy ~:;xv311s.i§;lv:*;s*T_ state. stre11gth_and and mam disability or izxability 1_11i:i1: ccmstittltcz a ground u1'1p;the oompaxly. On the ether V. on going C0.l1C61'i1 having ' ﬁmpioymeﬁt of hundreds 01' emp10y&¢;$,"'--t§_§€ oblivimls to this aspect, as tt';cf:'éi}Z-act oi""'wvi:;i¢iis1g: up Wonid be putting an end to the V" I ﬁusiﬁessiwi' _ii:r1ust:y or entrepxeneursimip and in turn "bf empioyment ta sevéral empioyess and £933"-<3f ga*o«:ﬁ.£cﬁon mid ﬁﬂkct on the: larger intmcest c:>f' that 'A -iii other words, since Winding up of a chompany is A m=.:.§;,:;§';;g but a Conzmtarztial death 01* izmelvency, the czcaurt has into <::<::rnsid&1*ati:3n the satire gtatus and pbsitiﬁﬂ «of thcsz ccmpany in the market and not 031}? temporariiy' inability or possibﬁity ta make fzayment of dehtss. The cozirt Wmiid aiso itﬂiiﬁidél" in ﬁlﬁ interest 0f justice {:3 give the eompauy w -19- some time in Cﬂiﬂiﬁ out of the mamentary i'111a1;t€:iaiWé2?i$is§ or my other temporary diﬁicuity as Wniding up is_ra;1"'}:xésg;a2§1@:_.v§:f _ fast resort. Vick, "i'ata 1503.1 and Steel .. Micm Forge (India) ;,;m:t:ed..

Company cases 1333. it is gagtineﬁth 110tc,vﬁ:%di é4fté): 1:i:zae"'V adverliisezzicnt: of the cc3133panjr""ﬁ;é'fiti613. fr.) filed any aﬁidavit in supporfofém' petitiéh§AVV 2?. PW. 1 bag eXaminati0n--i11- citzief LE-it6.§'éi.é}:'§«g petition and also in the pwviaus mund af by r6sp<:u:1dent company of ciause (\;vi:i}L peﬁﬁou. That a sum of I{S.§§,:¥?§,§9,96(;f"~._,g7f8S {i'ti€ as 011 31.1.2034 and that the r1v:a:§§::c£.ﬁx£.g€;.20{)1 was matursd €3.53. 1.6.2004 and tilt:

L"é3§3};{;a;;1A1'i"§$f._§{i=;f';i:i{).D0,£}{}{)f- W33 aiso 1:13 be paiii to the ;}c3£.{'£ion§:i";. the mspcmdent company is it} distress, has . s:1ff'¢1'ﬁd"*1§3sses and has bacame commﬁmiaiiy iizssyivexit and , A' iiiez-1-%fb1'e iiﬁﬁﬁfiiéﬁ to has wmmd up. PW. I has 21150 admitted % citzrixgxg the pcndsnay 0f thﬁ czompaimy" petitioxi, 21 Sum of VV i~£s.3,I39,?i$,{}}.4/~ was paid by the responcicmt and the same has ham: acceptﬁsti an 31.3.2005. Gut of the said amouﬂt, a sum 0f:»:$.3,,19,8{3,;«1'33/~ is with rﬁgard ta: HM'? 3{B"{::)01idS 3%» -29- and i{s.2,:39,9};,?'8ji is an iiivfi' 12% bands, but ti;x*:f_é§'§;'e ﬁlffhﬁf iiabiiiiiiazs to be met by 13:15 naspo;1dent_ abﬁfiiiﬂﬁ of paymmzst of the same, it is a pay the admittﬁd liability. PW. 1 113% 9;§§¢.u;-éar; £53'. supp<::r*£ of his de:p0Sitic:7n.

28. In the cross--exaniigati0n',"PQQ' §V *i1afs that in the iegal notice issucad to the i"'{3SpOI}.d¢3111C thzff aA1:i1au11t:'011 iI1t€f€S§- "Y msder fiﬁﬁiﬁd far argumnmts after PW1--.Txazzis%_¢;xii;$-cx'a§11i3:cd'z~3z3.::4;*'i1c: eviciencc has beer; Eat in thé rizsgoiideftiji; -~ VA

29. l=-'1*s3'm_ £116 '1i}aVt.f3.{;'ié?i'. f€a:01'd, it is eviiziem: that the peiiti§:n€:5:A Piéyvidant Fmzd Tstust had islvested in isE1.ﬁ.ITf:S}:):%¢;§i1I"J_u€£1j£ company initjaiiy a sum of i-Es. 1 ems? in L--}vf}V.:",""_;.<'§'¥3»'L» V"{'..ifé5:Xabi@, 1ZiiiSﬁ'C11i't'":(i§ recieemait-£3 bond) {:51

29.;i.,?19S34 that on aecsjunt of the dﬁfauit oamnﬂtted by *-w.__ the mspqiﬁdﬁat campany 0:11 the said bonds, 5: Statutory "'§i<airjcé"A_' was sent and i:hercafi:1=:r Windiﬁg up petition in V' €.l0ja1pa:1y }~'etitis:m 248/ 2000 was fiicxi in Wi1.ir;:h a u Gﬂmpiﬂﬁiiﬁé was entesmi mm ﬁatwean the pariiﬁs am} by

-mxier ilated 2'€;.'?.i3{}()1 1:216 said company petition I was fw petition while i§x.I--'4 is (iated 1.8.2001 subsequent to the Compmmisﬁ petition Wham aiiotment of 1:«,£"x'u pga (taiéaijle) llM'i' ﬂared nonmazcnnvmﬁble bond for a period of was issucxti in favour 01' tht: petition 'Hus: by thé;«'.;%espe3§iii¥:-;;;f"_"T ' szmnpaay, £51. 'i'her£~:f<3re, What is is h::.__;:1o1I;é {£16 earlier windiixg up geﬁﬁ0nAV.b¢%§i:g 'ﬁigtd i§}%'th¢ Vygitfjtionm' which resulted in a gihﬁﬁbnsir cxampany has made further andA'J3jgl1er"iﬁu;vé§§tﬁie.;it'i;:3L'.tJ:Tg;§3 Ti1éspondvE:x1t to 21 turns; of .!v£'$;'1 'sﬁbSéi;aaht to the disposal of the sariier céampény §&'s§y'.0f a mmgmlmse. i:}x.i~'?' is the iettér by tim respamtieut mmpany _ staﬁagg 3.: £;:as..a9;;mac:1eci the governmént for approvai t*.f):i'£i§.i_:S:f:; _fu::d$ 't%1;*0ugh gavernmmri guaraslteead bcmds so as for makiﬁg paymﬁntss. i§x.lr'8 is the V _ caiciiiatioﬁ. xégmﬁiﬁg the amaunt due by the mspandeni . . (H3. cssnskiwation of iix.I~'?', is: is eviciesxi that the 1'e$;pf<;;'1};im;:.t ccmpaﬁy was sacking '£0 mobilim funds for praérment of the petitimier dues afim' getting appxtevai from " Vibe Central {iiI3'€i'€}."i1i}1€£1L 1:1 fact evan (£1:L::i,i1g the p¢~*::::tie;:zCy {sf {he coﬁspaxiijsi petition, a 311111 01:' £€s.3,i"39,?'8,£} 14/ - has been §8}sz",i and accepted by ihé fjéﬁﬁﬁilﬁi'. 'Faki,m;; 110%: 0f these facts, I am Gf the viaew that this is not a ﬁt ca$e1f§K%§1.ﬁ1'e discmﬂan has in be éxemised in f€tVG1iI' of the Winding up tim respondent oompmzy as tE1i§.'u__'.i'§>~~.,l.1€3 3iV.V'E1 'case _ where the; mspsandeat campaiijv i$ 1:§13ab'ié't:) ;}_ay'its§.V d&:jhV1iS;"

.32. it is .-aiso neoessaijg _t!i::AA':;§3evss,g3(3::1{ient'V L' company is a pubiic secftor 1111:::_i_:_=,_-_"1'i;<;:14::M.;.":.1_g w1ii<:E;_¢mp_l§3y*s more than 3906 personuei iieiviVf1gAa-_ne:'3vé3Iiji1Aiimgch morn': than its iiabilities and ti1f:reI131'e of the pﬁtition wamici 1101': iirussineas of 11116:

oompa;:g;§..[.b{1z w;i§1;_l-6; ".ijf$i}.§_Ii5'i.i§¥."11Zit"3i1'iZ tat) its mputaiioxx silage: ﬁfié = has the poteutiai to earn pmiits i::"%1.f§c§*e':é 1'-sﬁﬁivai plan aubnﬁﬁed by it to thé G0ve1ﬁm§L1t which is evidﬁnt from the deposition of .Ai~§;z,g.'1. 11€:cessa.t'y* tat; btaar ix}; miliid the: fact that a " p€i:i:i§:1i"ﬁ§1*..wi::di11g up with a vitzw 1:0 enforcing payment of a :ﬁS§::I1i&:£ ' is an abuse: of tha process of the court. it "c~33:g:1atV'b€ gain said that an cmtiex' adixlitting a. winding up , ' 'p?e'ti€ibz1. and resuifant order for invitiilg claims fmm the V. ....rz%spect.ive parities hjv pubiic ilﬁiicé, i3 in many cases frcrm Cc:3£:i:i:J:11m'<:i3i pain': of view, the busijless point of vixzw, from the mariietainiiity poimt of View and also taking ijzxtn czonskiaratioii the hziemst of the work force not less iiljliriitliﬁ am

-35..

eiausee can be pressed into service for winciing up (if a company Where Substxfatum of the eompasiy has gcme er Where the company is fcrrmeci for the purpose of where full invesﬁgaiien is 11CC€S$&I"_V or Whene;"'ti1eIe. _»_ax complete cieadlcaek in the memagement ef the eii account of infernai strife, name of the ai3o=;e«'jsit11:a:"_iez33V_Lexﬁetj in the i£1s1:-ant case and 11e§.the1: has the ;':'retit.ionef3e_ ﬁjaiie £;'mi:<a case can this ground. On, Vcitbﬁl' nzrzigatw :13 caf sigiiiﬁeanee is that ﬁ1eVi'£::»3p0;1deiit 3V'V£:Qmpan'j%"i11'Vthe realm of pubiée sector of Heavy inciustriee, {3<)§:e:}e1:a1e11'i; V by the ileixtrai Governgeueni 3;1fiV.isa$*i;}.g"'eVa'i1.uge vmrk fame and was one of the tap p1i£3ii<:: ee{éE:3i*'Aeo:1i§;aniee once upon a time. Tilvallgh p1eee§ﬁﬁy.the is in a diﬁicnlt ﬁnaueiai situation, 'V that it is juet and equitable to wind up the e in: 'the «mar hand in the case of virgin seems In at Vs. mtestme mm Bistrlbutiart (P) Linniwa (2001) 6 Comp.L.J 16.1 (Rom), it has been stated that extra oxﬂixiaxjr yemedy imcier Section 433 and 434 ef the ijamganiee $0': is to be 3-pari.;i:1giy resorted to and not as 2: genera} pmvision made}: the generai eivii iaw. in the _ §":EiI'ﬁé}§§ bfcfar their own Costs.

"ZS-

Stffriig §.*1'i£l1ﬂ facie case on facets is made out for ad1:1£§S§s3£;._o£' the wimiiglg up pétitiﬁn against any company ivirf" . 1116 apiaiau that swam othm: rrsmedy" is peﬁﬁaner for maﬁzatimta {if the {i_ues,._. It;i.a;;-,_ remedy of Wiudialg up, tt::c:1jzr the is :ni§,;:;§i?ere§i to dismiss the petition. Sines the uﬁ 's;:":.:'1Af;{:e1;is t§1«*: death ofany 00111 pémy Wham pas:-'sing of such an Gfdfii', azourts' Qixésfe' $6 in tK:1e.'i'\ appmacit: as of thﬁ ﬁact for ﬁling a V because the debtcn"

§:nappe;;1s*: '{(Z)';'Jf; A;:ég co:ii:;;'a;ijy*.. ,

38. For f}15_ Vaf0r1=:s:aic{ "r:=.;a{so;:1s, the company petition is A; ;>;'''' W4 EEIDQ

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