RUPA BHARATI LTD. Vs. REGISTRAR OF COMPANIES
HIGH COURT OF ORISSA
Rupa Bharati Ltd.
REGISTRAR OF COMPANIES
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Patra, J. -
(1.) THIS is an appeal against the order of the Hon'ble Company Judge directing that the Rupa Bharati Ltd. be wound up under the provisions of the Companies Act, 156. This Company was incorporated on 3rd October, 1947 as a public Company limited by shares with its registered office at Kafla Bazar, Cuttack. The nominal capital of the Company is Rs. 5,00,000/ - divided into Rs. 50,000/ - ordinary shares of Rs. 10/ - each. The amount of capital subscribed and paid -up is Rs. 2,92,283 -50 np. The main object for which the Company was established as per the Memorandum of the Company was to carry on the business of the proprietors, Managers and Agents of Theaters, palaces and balls, Cinematographic shows and exhibitions, Talkie houses, concerts dancing, lectures, public meetings musical dramatic or variety performance of every description and all kinds of public and private entertainments and in particular to provide for staging of dramas or plays and to let the premises of the Company to be used for such other purposes as may seem expedient. The Company was very irregular in the matter of filing the statutory returns and hence the Company and its Directors were prosecuted for the years 1957.61 for defaults in submitting the Balance Sheets and the Annual Returns. The Company thereafter filed its Balance Sheet and Annual Returns for the years 1957.62 which disclosed a sordid state of affairs. The Company had also suspended its business from 1957 onwards and did not carryon any business during this period. The Balance Sheet as on 31st December, 1962 disclosed that the subscribed and paid up capital comes to Rs. 2,92,283.50 p. and the total realisable assets amount to Re. 4,635/ -. The total liabilities of the Company as on 31 -12 -196 stood at Rs. 1,65,372/ -. The Profit and Loss Accounts for the year ending 31 -12 -62 would show that the Company has incurred a net loss of Rs. 185/ - during that year. Thus the net liabilities of the Company were increasing year by year and the Company was unable to pay its debts and thus is liable to be wound up. In view of the aforesaid state of affairs the Registrar of Companies after obtaining sanction from the Central Government as required under the 2nd proviso to Sub -section (5) of Section 43 of the Companies Act, 1956 filed an application in Court to wind up the Company under Clauses (c) and (e) of Section 433 of the Companies Act.
(2.) THE application for winding up was opposed by Sri Surendra Kumar Das, the Director in charge of the Company. He disputed the correctness of the allegations that the Company has suspended its business from 1957 onwards. He averred that the Company was always keen to carryon the business and produced in Court correspondence in support of this contention. Regarding the assets he stated that the Company being a Film Enterprise, the only tangible assets in which its capital can be invested is pictures which like other tangible assets is liable to depreciation year after year at a certain rate. Although the technical residual value of a picture (after writing off depreciation at the prescribed rate year after year) be shown as nil in the Balance Sheets, the picture may still exist and be capable of producing handsome incomes. In the circumstances, he contested the averments made in the petition that the paid -up capital amounting to Rs. 2,92,283 -00 is already lost. He also strongly contested the allegation that the Company was not in a position to pay its debts. According to him no debt excepting the one due to himself as Managing Direct or exists and that as no body has demanded payment it was not correct to say that the Company was not in a position to pay its debts.
(3.) SECTION 433 of the Indian Companies Act, 1956 so far as it is material for the purpose of this case stands thus:
A Company may be wound up by the Court
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(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
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(e) if the Company is unable to pay its debts
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