Legal Reference Library

The Karnataka High Court, in the case of M/s Uttam Industrial Engineering Ltd vs M/s Shree Basaveshwar Sugars Ltd, has held that a winding-up petition has serious ramifications on the financial standing of a company and cannot be used in cases where there is a bona fide dispute regarding the amount owed by one party to the other and in such cases the company court should relegate the matter either to the civil court or arbitral tribunal. In this case, Uttam Industrial Ltd entered into a contract with Basaveshwar Sugars Ltd to provide machinery and equipment for a sugar plant. The petitioner fulfilled part of its obligation and demanded payment for the same. There was a dispute regarding the amount to be paid by the respondent company to the petitioner company. However, though the respondent company had initially agreed to pay a specified amount upon reconciliation of their accounts, they subsequently refused to pay the same. Therefore, a winding-up petition was filed before the h...

The Bombay High Court in Mr Sanjay Sadanand Varrier v/s M/s Power Horse India Pvt.Ltd. has held that a winding up petition filed by an employee under Section 439 r/w sections 433(e) and 434 of the Companies Act, 1956, as a creditor based on the claim of recovery of his unpaid salary and wages is maintainable. A division bench of Justice SC Dharmadhikari and Justice BP Colabawalla was hearing a company petition placed before them by the Chief Justice after a single judge in this matter took a different view from the one taken by another single judge in the case of Mumbai Labour Union vs M/s Indo French Time Industries Ltd. Petitioner Sanjay Varrier contended that from October 2009 till his resignation in March 2012, the respondent company did not pay him salary. Failing to reply .to the statutory notice sent by the petitioner under S. 434 of the Companies Act, the winding up petition was filed. While the respondent company relied on the decision of a single judge of the high court i...

Applying the principles laid down by the Supreme Court in M/s Madhusudan Gordhandas & Co. vs Madhu Woollen Industries Pvt ltd, the division bench of Chief Justice Manjula Chellur and Justice MS Sonak has held that once the debt owed by a debtor company is established as undisputed then the court shall wind up the particular company. This was held while the bench was hearing an appeal against an order dated June 28, 2016 by the Company judge admitting the winding up petition against the appellant company and ordering the advertisement thereof in accordance with provisions of the Companies Act, 1956 and the Companies Court Rules, 1959. Although there is no dispute that the appellant company owes the respondent an amount of Rs.90.90 crores, the appellant company has contended that the respondents owe them Rs.152.57 crores in damages on “account of certain acts of omission and commission on part of the respondents.”  Zal Adhyarujina argued on behalf of the appellant c...

In A. Talukdar & Company (Fertilizer) Private Limited Vs. Respondent: The Official Liquidator, High Court of Calcutta and Ors., the Hon'ble Supreme Court said that If an order to wind up a company is recalled and the company is revived, it is entitled to get back from the official liquidator its entire assets. Tenants who occupied the premises during the proceedings shall go out. The company court can evict them.

A Division Bench of Bombay High Court has held that the expression “suit or other proceedings” in Section 446(1) under chapter II of Part VII of Companies Act, 1956, does not include criminal complaints filed under Section 138 of the Negotiable Instruments Act, 1881 The Bench comprising of Justices Dr.Shalini Phansalkar Joshi and Dharmadhikari was answering a reference from a Single Judge to resolve a conflict between two views recorded in two Single Judges’ Judgments of Bombay High Court. Before the Single Judge, two decisions of Coordinate Benches of High Court were placed taking divergent views on the application of Section 446(1) of the Act to the proceedings under Section 138 of the N.I. Act, viz. (i) in the matter of Firth (India) Vs. Steel Co. Ltd. (In Liqn.), decided on 4th September 1998 [Coram : F.I. Rebello, J.], reported in AIR 1999 Bombay 75, taking a view that Section 446(1) of the Companies Act is not applicable to proceeding under Section 138 of N.I. Act; and (ii) unrep...

Karnataka High Court Kingfisher Airlines Limited vs State Bank Of India on 29 January, 2014 Author: Dilip B.Bhosale B.Manohar 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 29th DAY OF JANUARY 2014 PRESENT THE HON'BLE MR. JUSTICE DILIP B BHOSALE AND THE HON'BLE MR. JUSTICE B MANOHAR O.S.A.NO.1/2014 BETWEEN KINGFISHER AIRLINES LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND HAVING IS REGISTERED OFFICE AT UB CITY, 24, VITTAL MALLYA ROAD BANGALORE-560 001 REPRESENTED BY ITS AUTHORISED SIGNATORY ... APPELLANT (BY SRI K G RAGHAVAN, SR. ADV., FOR SRI RAJESH D M, ADV., for RAJESH & RAJESH, ADVS.) AND 1. STATE BANK OF INDIA A BANKING CORPORATION CONSTITUTED UNDER THE STATE BANK OF INDIA ACT 1955 (23 OF 1955) HAVING CORPORATE CENTRE AT STATE BANK BHAVAN MADAME CAMA ROAD NARIMAN POINT MUMBAI-400 021 AND HAVING ITS INDUSTRIAL FINANCE BRANCH 2 AT 61, RESIDENCY PLAZA, RESIDENCY ROAD BENGALURU- 580 025 2. AX...