Mr. Sudarshan Kumar Modi vs Seth Chiranjilal Multanimal R.B. Private Limited

Subrata Kumar Dash, Member (Technical)

In the present petition, the petitioner is seeking a remedy for winding up of the Company under Section 271(e) of the Companies Act, 2013, under just and equitable grounds. The present petition is being filed by the petitioner in the capacity of contributory to the company as defined under Section 2(26) of the Companies Act, 2013 namely, Mr. Sudarshan Kumar Modi holding 20.48% shares, i.e. 1024 shares in the respondent company.

The respondent No.1 i.e. Seth Chiranjilal Multanimal R.B. Private Limited having CIN No.U51909PB1949PTC002039, was incorporated as a Private Company Limited by shares on 21.02.1949 by Registrar of Joint Stock Companies, Patiala and East Punjab States Union, Patiala State under the provisions of Patiala Companies Act, 1996. The registered office of the Company is situated at Nabha Gate, District Patiala, (Punjab)-147001, India.

It is stated by the petitioner that the company is presently having authorized share capital of Rs.5,00,000/- (Rupees Five Lac only) divided into 5,000 Equity Shares of Rs.100/- (Rupees One Hundred) each and the Issued, Subscribed and Paid-up Capital of the Petitioner Company is Rs.5,00,000/- (Rupees Five Lac only) divided into 5,000 Equity Shares of Rs.100/- (Rupees One Hundred) each. (A copy of the Master data extracted from the MCA Site is marked herein and annexed as Annexure-A5).

It is submitted that presently, there are 28 Equity Shareholders in the Company comprising all family members, friends, and relatives as per the last annual return filed by the company for the Financial Year 2013-14 with the Registrar of Companies, Punjab and Chandigarh in Form No.20-B. It is further submitted that until 13.03.2018 there were two Directors of the Company namely Mr. Sudarshan Kumar Modi bearing DIN No.00333736 and Mr. Sanjeev Kumar Modi bearing DIN No.00443460. They were holding office since 30.06.1976 and 19.05.1989 respectively. Mr. Sanjeev Kumar Modi is the son of Mr. Sudarshan Kumar Modi.

It is averred that Mr. Sudarshan Kumar Modi resigned from the Directorship of the Company w.e.f. 13.03.2018 and the petitioner received the resignation letter of Mr. Sanjeev Kumar Modi on 26.03.2018.

It is submitted that the company has not carried out any business activity for a long time and has no further possibility to commence any business activity. There is a complete loss of substratum of the company and the same is incapable of being resolved in any manner. Due to deadlock among the Directors of the Company, the balance sheet could not be approved by the Board and could not be audited by the auditors of the Company for the Financial Year 2014-15 and subsequent years. However, unaudited balance sheets for F.Y. 2014-15, 2015-16, and 2016-17 are attached as Annexure-A10 of the petition. It is seen from the unaudited balance sheets, that there is no fixed asset in the company. However, there are only a few current assets in the form of Short Term Loans and Advances amounting to Rs.5,64,733/- as of 31.03.2017.

It is averred that the petitioner sent a requisition for convening the EOGM of the Company to move a resolution for winding up of the company by this Tribunal under Section 271(a) of the Companies Act, 2013 on 31.03.2018. The same was received by the company on 04.04.2018. The management of the Company has failed to convene the EOGM within the time as prescribed under the provisions of Section 100 read with Rule 17 of the Companies (Management and Administration) Rules, 2014 i.e. 45 days from the date of the receipt of the requisition.

It is stated that after the expiry of 45 days from the date of receipt of requisition i.e. 19.05.2018, the requisitionist himself called the EGM as per the provisions of Section 100(4) of the Companies Act, 2013, read with Rule 17 of the Companies (Management and Administration) Rules, 2014, on 12.06.2018 at 10.00 a.m at the registered office of the Company. It is further stated that no shareholder of the company except the petitioner turned up to attend the meeting and therefore no resolution was passed in terms of Section 271(a) of the Act. The notices along with reasons for moving a special resolution for winding up of the Company were sent to all the shareholders by speed post at their registered addresses as per the last available list at MCA Portal attached with Form-20B for the year 2014 (Annexure-A12).

It is submitted that the company has been regular in filing Income Tax Returns and there are no income tax dues outstanding as of the date of filing of this petition. (Copy of Income Tax Returns filed for the assessment year 2015-16, 2016-17, and 2017-18 are attached as Annexure-A14). It is further submitted that the company is not governed by any other sectoral or regulatory authority and thus no statutory and other dues towards such authorities are outstanding. Further, the Company has not taken any secured or unsecured loan from any persons/bank/financial institution, etc, and hence, the company is debt-free.

It is stated that the company is maintaining only one bank account bearing No.55041448333 with the State Bank of India, Patiala Branch with a present balance of Rs.8222/-. A copy of bank statements from 02.09.2014 to 05.03.2018 is attached as Annexure-A15. There are no employees on the roll of the company as of the date and there are no dues pending towards any previous employee if any.

Notice of this petition to respondent company No.1 and also to other respondents, shareholders of respondent company No.1 were issued by this Tribunal vide order dated 23.08.2018. In compliance with the above order affidavit of service has been filed vide diary No.3802 dated 04.10.2018. Except for respondents No.13, 27, and 28, the rest were served. Respondents No.13, 27 & 28 have been served through substituted service i.e. publication in daily newspapers. The compliance affidavit for the same is filed vide Diary No.817 dated 18.02.2019.

It is observed in our order dated 06.11.2019 that notices issued in the CP were duly served on the respondent on various dates but there is no representation for any one of them including the first respondent company. In spite of directing the first respondent company to file its objections, if any, along with the statement of the affairs, the same has been not filed and, the respondents were proceeded ex parte vide order dated 11.03.2019.

Notice of this petition was issued to the Registrar of Companies vide order dated 22.12.2021. Pursuant to the above notice, a report of ROC has been received vide Diary No.00114/4 dated 16.03.2022, whereby it has been stated the last balance sheet and the annual return of the company were filed for the F.Y. ending 31.03.2014. Further, it is stated in the report of ROC that there is no inquiry/inspection/complaint/legal action pending against the subject company at this stage. It is also stated in the report that the Company has not filed statutory returns with the office of ROC Since 2015. The petitioner has filed its response to the report of ROC vide Diary No.00114/5 dated 13.05.2022 whereby, it is stated that due to the deadlock amongst the directors of the company, the balance sheets of the company could not be approved by the Board and could not be audited by the Auditors of the Company for the F.Y. 2014-15 and subsequent years.

The learned counsel for the petitioner has filed an affidavit vide Diary No.00114/7 dated 17.08.2022, wherein it has been submitted that the respondent company has no existing liability and the respondent company has not taken any secured or unsecured loan from any persons/bank/financial institution etc. There is no liability towards secured/unsecured creditors and the company has no income tax dues outstanding.

We have heard the learned counsel for the applicant and gone through the documents produced. We have also gone through the report of the Registrar of Companies, wherein it has been mentioned by the RoC that there is no inquiry/inspection/complaint/legal action has been pending against the subject company at this stage. In view of the facts and circumstances as above, we are of the view that it is just and equitable to order the winding up of the company as there is no other remedy available to the petitioner and they are acting reasonably in seeking to have the company wound up instead of pursuing the other remedy.

In the light of aforesaid facts and circumstances of the case, after duly considering the legal position on the issue and, by exercising powers conferred on the Tribunal, under provisions of Section 273 of the Companies Act, 2013 and the Companies (Winding Up) Rules, Company Petition bearing CP No. 172/Chd/Pb/2018 is hereby allowed by ordering to wind up Seth Chiranjilal Multanimal R.B. Private Limited /R-1 Company with the following consequential directions:

(1) Official Liquidator, Chandigarh, attached to the Hon'ble High Court of Punjab and Haryana, is hereby appointed as Liquidator to take steps to liquidate Seth Chiranjilal Multanimal R.B. Private Limited/R-1 Company in accordance with law;

(2) All persons associated with the affairs of Seth Chiranjilal Multanimal R.B. Private Limited, and also the Authorised signatories to various pleadings filed in various Courts/Tribunal, on behalf of Seth Chiranjilal Multanimal R.B. Private Limited, before various Courts, are hereby directed to extend full assistance and co-operation to the said Liquidator to discharge his statutory functions;

(3) The Petitioner is directed to advertise this Winding up Order immediately but not later than 14 days from receipt of this order, in widely circulated news papers in vernacular language and in English Language in Punjab;

(4) The Liquidator is permitted to communicate this order to all the Authorities connected with the case, and also to the Courts, where litigation,if any, is pending on the issue;

(5) The Liquidator is directed to follow all extent provisions of Companies Act and the Rules made there under, in conducting the liquidation proceedings in the case;

(6) Registry is directed to serve the copy of this Order to the petitioner, RoC and Official Liquidator.

(7) List the Company Petition after eight (8) weeks for the report of the Liquidator.