REGISTRAR OF COMPANIES Vs. JAIPUR STOCK EXCHANGE LTD

JUDGEMENT

(1.) IN this petition, under Section 439(5) read with Section 433(c) and (f) of the Companies Act, 1956, the Registrar of Companies as a petitioner has prayed that the respondent, M/s. Jaipur Stock Exchange Ltd., Jaipur, a company incorporated under the Companies Act, 1956, be ordered to be wound up by this court.

(2.) THE facts of the case lie in a narrow compass and may be stated thus : The respondent company was incorporated on December 28, 1983, as a company limited by guarantee having no share capital. It is alleged that since the date of incorporation, the respondent company had not commenced its main business of stock exchange within a year from the date of its incorporation for which the company was formed. It is also alleged that the company has failed to obtain permission from the Stock Exchange Division, Department of Economic Affairs, Ministry of Finance, as required by the provisions of the Securities Contracts (Regulation) Act. The petitioner alleged that he had received complaints from the Federation of Employees of Delhi, Gujarat, Haryana and Rajasthan against the affairsof the company, wherein allegations were made that some of the promoters of the company were carrying on the activities with ulterior motive and requested cancellation of their registration. In view of the allegations made in the petition, the petitioner contended that it is clearly established that the respondent company has not commenced its business within a year from the date of its incorporation and it is a fit case that the company may be wound up under the provisions of Clause (c) of Section 433 of the Companies Act, 1956 (hereinafter referred to as 'the Act'). It is also alleged that it is just and equitable that the company should be wound up under the provisions of Clause (f) of Section 433 of the Act. The petitioner, Registrar of Companies, is required to obtain the previous sanction of the Central Government under Section 439(5) of the Act. It is, therefore, stated that the Regional Director has accorded sanction for moving the winding -up petition before this court.

(3.) SECTION 433 of the Act says that a company may be wound up by the court under the circumstances detailed in Clauses (a) to (f) of the said section, and provides that the company may be wound up by the court if the company does not commence its business within a year from its incorporation, or may be wound up if the court is of the opinion that it is just and equitable that the company should be wound up. Thus, the petitioner has taken two grounds for contending that the respondent company may be wound up by the court. These two grounds are as follows :