In Re : Sharda Refrigeration Co.Pvt. Ltd.,Allahabad and Gupta Gasoline Distributor,Meerut

M.C. Jain, J.—This is winding up petition made by the petitioner Gupta Gasoline Distributor against the respondentcompanySharda Refrigeration Company Pvt. Ltd. having its registered office at 48/48A, Baluaghat, Allahabad for its winding up. The petitioner is a creditor of the respondentcompany. The petition has been presented with these allegations:

The respondentcompany was appointed the sole distributor of Birla Blue Flames Ltd. SCO 837, Mani Majra, Chandigarh engaged in distribution of Imported LPG under the parallel marketing of LPG Policy of Government of India, for several Districts of State of U.P. including District Meerut, The respondentcompany was assigned by Birla Blue Flames Ltd. to appoint dealers for Meerut District for the smooth running and effective working of the business in LPG Cylinders. For this purpose the respondentcompany appointed the petitioner as its subdistributor for appointment of dealers in Meerut District. An agreement was entered into between the petitioner and the respondentcompany on 6111993 on payment of Rs. one lac as security deposit. The amount was agreed to be refunded at the rate of 24% interest per annum. Besides, premium of Rs. Three lacs was also charged bearing interest at the same rate. On the assurance of the respondentcompany, the petitioner appointed dealers in District Meerut but no progress in business was made by the respondentcompany. The petitioner surrendered subdistributorship of the respondentcompany in the (sic) 1995 vide letter dated 2061995 and asked for the refund of its deposit and expenses incurred as also for damages on account of loss of business. The amount asked for was Rs. 10,92,500 plus interest at the rate of 24% per annum from the date of deposit. In response to letter of the petitioner the respondent desired a personal meeting to settle the claim. The meeting was held on 1871995 and the settlement was arrived at for payment of Rs. 5,92,500 only plus interest at the rate of 15% from 141994. This settlement was confirmed by the respondentcompany by letter dated 1971995. However, no payment was made and only empty assurances were given by the respondentcompany inspite of several letters sent by the petitioner. Statutory notice was sent by the Petitioner to the respondentcompany on 21996 in reply whereof the respondentcompany confirmed the outstanding amount but requested for one month''s time to make payment. However, nothing materialised and the petitioner filed this winding up petition.

While moving the winding up petition, the petitioner simultaneously moved an application for passing restraint order against the respondentcompany regarding the disposal of their property during the pendency of the petition. While issuing notice to the respondentcompany on 2381996 this Court restrained the respondentcompany from selling/transferring the land and construction of Khasra plot Nos. 120,130,131 and 133 in village Dulhapur, Tehsil Phoolpur, District Allahabad.

On service of notice, the respondentcompany made an application dated 481999 (A11) seeking permission to dispose of land and construction over the khasra plot aforesaid so as to clear of its liability owed to the petitioner. An affidavit of Rajendra Kumar, Managing Director of the respondentcompany came to be filed in support of this application. Paragraphs 2, 3 and 4 of the same are material. Herein, the respondentcompany has clearly accepted its liability to pay the amount in question to the petitioner viz. Rs. 5,92,500 with interest at the rate of 15 per cent per annum from 141994. However, it has been averred that it is facing serious financial crises and has decided to dispose of its assets consisting of land and construction. It has, accordingly, sought permission to sell off the land and construction of the khasra numbers aforesaid.

I have heard Sri Arjun Singhal, learned Counsel for the petitioner and Sri Vishnu Gupta, learned Counsel for the respondentcompany.

The petition is at admission stage. What is material at this juncture is that the respondentcompany clearly admits its liability towards the petitioner in respect of the amount claimed by it (petitioner). Therefore, the petition should be admitted and advertised under Rule 24 of the Companies (Court) Rules. 1959.

It may be stated as a passing reference that so far as the prayer of the respondentcompany for permission to sell its land and construction is concerned, sale of the assets of the company on the passing of the winding up order, for the purpose of distribution of dividend amongst creditors, is part of the proceedings held by the official liquidator. The winding up of the company is deemed to commence at the time of presentation of the petition for the winding up as per Section 441 (2) of the Companies Act, 1956. The Companies Act, 1956 also contains a provisions for the appointment of provisional liquidator, at any time after the presentation of the winding up petition and before making of winding up order (vide Section 450 of the Companies Act). In the present case, the respondentcompany has been restrained from selling or transferring its land and construction till further orders. For the present, this Court does not consider it proper to permit the respondentcompany to sell its land and construction. It shall be considered subsequent to the publication as required under Rule 24 of the Companies (Court) Rules, 1959 as to what further appropriate orders should be passed in the interest of justice.

To come to the point, this winding up petition is admitted for advertisement under Rule 24 of the Companies (Court) Rules, 1959. Let steps for advertisement as per this rule be taken by the petitioner within two weeks from today. The office will fix a date for hearing in the notice to be published and shall list the case on the date fixed for hearing. Notice be published in Hindi newspaper Aaj'' published from Allahabad and English newspaper Times of India'' published from Lucknow. Publication shall also be made for the same date in Official Gazette. Petition admitted.