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Judgment
Mukul Mudgal, C.J.
CM No. 113 of 2010
Heard. Allowed subject to all just exceptions and CM disposed of.
CM No. 112 of 2010
Heard. Delay of 6 days in filing the appeal is condoned and CM disposed of.
Company Appeal No. 25 of 2010 (O and M)
This appeal challenges the judgment of learned Company Judge dated 13.8.2010. The learned Company Judge interalia held that the company was incorporated as a family concern, set up to settle Shri Ajay Nagpal, an Engineer Graduate and Shri Vijay Nagpal, a non-practising law graduate in the business of buildings construction contractors. Learned Company Judge also noticed that the company was black listed by the Military Engineering Services treating its performance unsatisfactory and the bank froze its accounts. Learned Company Judge further held that in a family concern where the Appellants hold large number of shares only, the exclusion from the management and/or acts of ''oppression'' and ''mismanagement'' can at best give rise to seek a remedy under Sections 397 and 398 of the Companies Act, 1956. Learned Company Judge thus held that being a family concern, the Appellants had not made out a case for winding up of the company.
Mr. Ramesh Kumar, learned Counsel appearing for the Appellant has urged that the Appellants had served a notice u/s 434 of the Companies Act but no reply to the said notice was filed and thus non-filing of reply to the statutory notice should have automatically led to winding up of the company. In support of his contentions, he has placed reliance upon Centuary Steel Industries Vs. Eider PWI Paging Limited, and Jayaswals Neco Limited Vs. Rita Machines (India) Ltd., . He further urged that in both the above judgments, the view taken that non-filing of reply to a statutory notice must necessarily led to winding up of the company has not been followed by the Company Judge in this case.
We are unable to agree with this plea of learned Counsel for the Appellant because a perusal of the above two judgments shows that in both the cases, the statutory notice and the winding up petitions were by the strangers who had business dealing for the company and not by those share holders who were family members; thus the observations made in those cases are based on different facts. Further more, while the learned Company Judge has not given this reasoning, in a family concern, a deposit by brothers, who hold substantial number of shares, need not invariably be said to be a debt.
Learned Counsel for the Appellant further urged that the Company is non-functional for the last one decade and therefore should have been wound up. A bare perusal of Chapter-II of the Company Act relating to ''Winding Up by the Tribunal'' lays down the class of the cases in which a Company ''may'' be wound up. The word used is not ''shall'' that this jurisdiction is discretionary. It is well settled that winding up jurisdiction is discretionary and winding up is not to be granted in all cases. It is not disputed that the Company is embroiled in various internecine proceedings as well as proceedings against banks etc. Accordingly, we find no merits in this appeal and the same stands dismissed in limini.