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Judgment
Anand Byrareddy, J.—Heard the learned counsel for the petitioners. The respondent No. 1 who has been served, remains unrepresented. It is the case of the petitioners that the first respondent-company was incorporated in the year 1995 under the name and style of Mars Print Pack Pvt. Ltd., with an authorized share capital of Rs. 50,00,000/- divided into 5,00,000 shares of Rs. 10/- each and issued and subscribed capital of Rs. 23,00,000/- equity shares of Rs. 10/- each paid as on 31/3/2001. The main objects of the company was manufacturing of printed, laminated packing materials, apart from other incidental activities. The first respondent had commenced its business in the year 1995. The latest audited balance sheet as on the date of the petition was up to 31/3/2004.
It transpires that the first respondent had approached the respondent No. 4 for financial assistance and the same had been sanctioned as on 26./10/1996 in a sum of Rs. 50,00,000/-. The petitioners herein were the investors in the company and they were also related to the second respondent who was the Managing Director of the first respondent. It is the case of the petitioners that on account of mismanagement, the first respondent-company had incurred huge losses and was not able to repay the loans which had been borrowed from the respondent No. 4. Consequently there was default and recovery proceedings was initiated by respondent No. 4 before the Debt Recovery Tribunal, Bangalore, resulting in a recovery certificate being granted in favour of the respondent No. 4 for a total sum exceeding Rs. 1,00,00,000/- (Rupees One Crore only), with a condition that the respondent No. 4 was unable to recover the moneys from the company and its Directors, and it could proceed against the present petitioners. It is further stated that the respondent No. 4 has not taken any steps to recover the moneys in terms of the recovery certificate and there is a constant threat by the respondent No. 4, proceeding against the present petition. The petitioners therefore contend that it is evident from the circumstances that the first respondent is unable to pay its debts and the statutory notice issued in this regard by the petitioners, has been received by the first respondent, but there has been no reply. It is in that background that the present petition is filed, in terms of application in C.A. 208/12 u/s 439(8) of the Companies Act, 1956, read with Rule 97 of the Companies (Court) Rules, 1959. The said application having been allowed and notice having been ordered on the petition, though the respondents having been served, except the respondent No. 4, there is no representation on behalf of the other respondents.
It is evident from the material on record that the first respondent is unable to pay its debts and therefore the present petition having duly been advertised, there is due compliance of the requirement in law. Accordingly the petition is allowed. The Official Liquidator is appointed as the liquidator in winding up. The first respondent-company is ordered to be wound up. The petitioners shall deposit a sum of Rs. 50,000/- towards the expenses involved, in favour of the Official Liquidator. The petitioners to file a copy of this order before the Registrar of Companies, within a period of four weeks and the petitioners to take out an advertisement of the winding up order, within four weeks in the English daily "The Hindu" and Kannada daily "Udayavani".