CINCO LABORATORIES PRIVATE Vs. STATE

JUDGEMENT

(1.) THIS application under Section 433(e) of the Companies Act, 1956, has been filed by the Registrar of Companies, Bihar, for winding up of the opposite party-company, Cinco Laboratories Private Ltd., Patna. The necessary sanction under Section 439(5) of the Companies Act for riling of this application of the Central Government has been obtained and it forms annexure " 1 " to the petition. The necessary facts in support of the prayer for the winding up of the company are set out in the petition to show that the company is wholly unable to pay its debts and requires to be wound up.

(2.) THE above sanction was accorded on the company's balance-sheet as it obtained on the 31st of December, 1963. A preliminary objection was raised on behalf of the company that sanction was to be treated as invalid in the eye of law in view of the fact that this petition was filed much later, i.e., on September 22, 1970, within which subsequent balance-sheets have come into being. Both sides were heard on this point and it was negatived in this court's order No. 21 dated November 26, 1971.

(3.) AFTER having carefully considered all the facts and circumstances of the case, I am inclined to think that the company does not deserve to be wound up at present. It appears that the huge loss, as suffered by the company as disclosed in its balance-sheet of the year 1963, has gradually been liquidated subsequently and according to the balance-sheet of 1970 it has a profit of the aforesaid amount of Rs. 2,479.79. This is a sound indication of improvement in the company's position by and by. It cannot, therefore, be said that the company's position is not likely to improve to the extent that even after allowing depreciation on its fixed assets, as above, it registers a profit and be in a position to pay its debts, if any. The company's position, as it stands at present, as disclosed in its balance-sheet of 1970, is not such that it is to be treated as being wholly unable to pay its debts requiring its winding-up as prayed for.