TITUS DANIEL Vs. SOUTH INDIAN PARENTERALS PRIVATE LIMITED

JUDGEMENT

(1.) This Company Petition is filed by the petitioners who are the shareholders of the Company seeking winding up of the Company under S.433(f) and 439 of the Companies Act, alleging mismanagement, misappropriation of large amounts belonging to the Company, falsification of the Company's accounts and fabrication and forgery of documents for the illegal and unlawful acts of respondents 2 and 3.

(2.) The 2nd respondent who is the Managing Director of the 1st respondent Company has filed a counter affidavit on behalf of respondents 1 and 2 denying the allegations of mismanagement, misappropriation of the funds of the Company, falsification of the accounts, etc. In the affidavit it is further stated that the respondents have no objection in passing an order of winding up of the Company under S.433(f) of the Companies Act.

(3.) The 4th respondent Kerala Financial Corporation who is the creditor of the Company has filed a counter affidavit contending that the above petition is not maintainable and is liable to be dismissed on merits also. According to them, the above petition is filed in collusion between the petitioners and respondents 2 and 3 with deliberate intention to delay and obstruct the recovery proceedings initiated by the 4th respondent against the 1st respondent and its directors and their assets for the amounts due from the Company by availing a loan of Rs. 19.1 lakhs. They have also contended that since the 1st respondent had committed default of payment of instalments of principal and interest due to them as agreed and as on 1st January 1996 a sum of Rs. 39,29,537 was due from the 1st respondent. They have initiated proceedings under S.29 of the State Financial Corporations Act for realisation of the entire amount due under the loan account and according to them, a notice dated 1st February 1996 was issued by the 4th respondent to the 1st respondent and its directors demanding payment of the entire amount. Since the 1st respondent and its directors failed to comply with the demand made by them in the notice the assets of the 1st respondent mortgaged and hypothecated in favour of the 4th respondent were taken possession of by the 4th respondent in exercise of the powers under S.29 of the State Financial Corporations Act. According to them, the proceedings initiated by the 4th respondent is not liable to be interfered with and in the event of the 1st respondent Company ordered to be wound up, the 4th respondent should be permitted to proceed with the sale of the assets of the 1st respondent Company for realisation of the amounts due to the 4th respondent.