ORISSA TRUNKS ENAMEL WORKS Vs. STATE

JUDGEMENT

(1.) THIS is an application under Section 439 of the Companies Act, 1956 (hereinafter referred to as 'the Act'), filed by the Orissa Trunks and Enamel Works Ltd. (hereinafter referred to as ' the company ') for winding up the company. This company was incorporated in April, 1959, as a joint stock company (private) limited by shares. Its nominal capital is Rs. 3,00,000, divided into three lakhs equity shares of rupee one each. The amount of capital paid up or credited as paid up is Rs. 1,45,000. The objects for which the company was established are to run the business of manufacture of trunks, suitcases and enamel products as a pilot project for the development of small -scale industries and to do all such other things as are incidental thereto.

(2.) IT is alleged that the ex -managing director, Sri S. F. Haque, furnished fraudulent accounts to the board of directors and furnished a list of sundry debtors most of whom were found to be fictitious. Besides, he did not hand over the records and books of the company for which reason accounts could not be finalised, with the result that after submitting the profit and loss account of the company for the year ending 3Ist March, 1963, further balance -sheets could not be prepared and statutory reports required to be submitted to the Registrar of Companies could not be submitted. The company also suspended business from November, 1964. In view of the above -mentioned facts, the company passed a special resolution at a general body meeting held on 18th June, 1971, to apply for winding up of thecompany. It is in pursuance of this resolution that the present application was filed.

(3.) IN the rejoinder filed by Sri S. T. P. S. Jagannathacharyulu, who was authorised by the resolution dated 18th June, 1971, to file the present application, he refuted the allegations made by the managing director in his affidavit. It was asserted by him that due notice of the meeting held on June 18, 1971, was issued to the ex -managing director who after ceasing to be managing director still continued to be one of the directors of the company, but that he deliberately avoided to attend the meeting. It is asserted further in his rejoinder that the company is not in a position to revive its business due to the following reasons :