REGISTRAR OF COMPANIES Vs. ATLAS TRANSPORT PRIVATE LTD

JUDGEMENT

(1.) THE Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh, has filed this petition for the winding-up of Messrs. Atlas Transport (Private) Ltd. on the ground that it is unable to pay its debts within the meaning of clause (e) of Section 433 read with Section 439 (5) of the Companies Act, 1956. The petition is vehemently contested by the respondent-company and the following issue was framed : " Is the respondent-company unable to pay its debts and is, therefore, liable to be wound up under Clause (e) of Section 433 of the Companies Act ?"

(2.) ON behalf of the petitioner Shri Brij Kishore has appeared as P. W. No. 1 and has stated that according to the balance-sheet for the year ending March 31, 1970, it appeared that the company was unable to pay its debts. He has admitted that no enquiry in this behalf was made by the Registrar of Companies or other officer on his behalf. The Registrar of Companies sent a report to the Regional Director, Company Law Board, at Kanpur, and obtained his sanction for filing this petition. The Regional Director only sent a notice to the company before according sanction, but after receiving its reply, no further communication was addressed to the company. It is, therefore, not known how the Regional Director felt satisfied that the company was unable to pay its debts.

(3.) SHRI Agya Ram, the managing director of the company, has appeared as R. W. No. 1 and has stated that in the balance-sheet for the year ending March 31, 1970 (exhibit P. 2), the amount of Rs. 32,407 is shown as due to the directors, which amount is due to him and he has never made a demand from the company for its repayment. Another item of Rs. 52,008 is due to the shareholders and none of them has ever demanded this amount from the company. A sum of Rs. 83,640 is shown as due to C. M. A. and P. (Controller of Military Accounts), on the basis of the decree against which the company has filed an appeal which is pending in this court. The company has reserved Rs. 70,446 for payment of the decree in case it is affirmed. This amount is invested in the vehicles of the company. There is an item of Rs. 89,450 due from the debtors and is shown as partly doubtful. The balance-sheet of the respondent-company for the year ending March 31, 1972, exhibit No. R. 1, shows that the amount due from the debtors and partly doubtful is Rs. 25,547. 76. This balance-sheet shows a profit of Rs. 19,289. 45. The balance-sheet fot the year ending March 31, 1970, also shows a profit of Rs. 6,517. The immovable properties of the company consist of 6 shops, 6 godowns, 6 offices and waiting rooms, one workshop, 10 garages and a big compound for the vehicles to stand, the market value of which is not less than Rs. 1,00,000. Some of these properties are let out and fetch a monthly income of Rs. 500. The Registrar of Companies has never written to the company to say that any creditor of the company has complained to him that his amount has not been paid. Neither the Regional Director nor the Registrar of Companies ever made spot enquiries at Pathankot with regard to the respondent-company.