MRIDULA BHASKAR Vs. ISHWAR INDUSTRIES LIMITED

JUDGEMENT

(1.) In this petition u/s 433, 434, 439 and 450 of Companies Act, 1956, the winding up of M/s. Ishwar Industries Ltd. ("the Company") has been souglit on 3 grounds. Firstly, that the Company is unable to pay debts, secondly, that the affairs of the Company are being conducted in a manner prejudicial to the interests of the general body of the shareholders and finally, that the financial position of the Company is deteriorating at quite fast pace and this has raised a grave apprehension in the minds of the shareholders and creditors of the company. It is alleged that the Company has even exceeded the maximum borrowing power which according to the resolution of the company is Rs. 1.25 crores.

(2.) It is well settled that a prima facie case has to be made out before the court can take any action in the matter. Even admission of a petition which will lead to advertisement of the winding up proceedings is likely to cause immense injury to the Company if ultimately the petition has to be dismissed. In view of that the proceedings of the petition which have been pending for quite sometime are at the stage of only show cause notice as to why the petition be not admitted. [In paras 3 to 8, petitioners allegation and their refutation is noticed and S. 433 of Companies Act is reproduced.]

(3.) Admittedly, Cl. (a) to (e) of S. 433 are not applicable in the present case and the only clause which remains is cl. (f). Taking position of the Company as depicted above the question for consideration is whether it can be said that it is just and equitable to wind up such a company. The Supreme Court in the case of Hind Overseas (P) Ltd. v. Raghunath Prasad, AIR 1976 SC 565 observed that the relief u/s 433 (f) based on the just and equitable clause is in the nature of ,a last resort when other remedies are not efficacious enough to protect the general interests of the company. There must be materials to show that "just and equitable" clause is invoked, that it is just and equitable not only to the persons applying for winding up but also the company and to all its shareholders. The company court will have to keep in mind the position of the company as a whole and the interests of the shareholders and see that they do not suffer in a fight for power that ensures between two groups.