(1.)THIS petition has been filed by the Registrar of Companies' (hereinafter referred to as 'the petitioner') under Section 439(5) read with Clauses (c) and (f) of Section 433 of the Companies Act, 1956 (hereinafter referred to as 'the Act'), for the winding up of M/s. Jai Agro Industries Ltd., respondent herein (hereinafter referred to as 'the company'), on the ground that the company has not been carrying on business for more than a whole year and has lost its substratum.
(2.)THE company was incorporated in the Union Territory of Delhi on July 21, 1969, and, subsequently, it changed its registered office from the Union Territory of Delhi to the State of Rajasthan. The main object with which the company was incorporated was to acquire and take over the existing agricultural and horticultural activities carried on by the Jaipur Udyog Ltd. and to carry on business of farming, horticulture, floriculture, sericulture, etc. The company is a wholly owned subsidiary of M/s. Jaipur Udyog Limited. It has three agricultural farms at Delhi, Sawai Madhopur and Jodhpur. In the petition it has been stated that the last balance -sheet and profit and loss account that was filed in the office of the petitioner was for the period ending on June 30, 1979, and, thereafter, the company has not filed any return in the office of the petitioner inspite of default notices being issued under registered A.D. cover and that from the balance -sheet of the company as on September 30, 1979, it appears that the company is not carrying on business for more than a whole year and has lost its substratum. The petitioner moved the Regional Director (Northern Region), Company Law Board, Kanpur, under Sub -section (5) of Section 439 of the Act for according sanction for presentation of the petition for winding up of the company under Clauses (c) and (f) of Section 433 of the Act and on receipt of the said application, the Regional Director gave a show -cause notice under Section 439(6) of the Act to the company and its directors and in response to the said noticean explanation was furnished by Shri Sikhari Lal Bagla, one of the directors of the company, and the said explanation was found to be unsatisfactory by the Regional Director and he accorded necessary sanction and thereupon the petitioner has filed this petition for winding up.
A notice was issued on the petition to the company and in response to the said notice a reply has been filed on behalf of the company. In the said reply, it has been stated that Jaipur Udyog Ltd. is holding more than 99% shares of the company and thus it is the holding company of the petitioner and M/s. Jaipur Udyog Ltd. nominates the directors of the company. Formerly, Shri A.P. Jain, Shri O.P. Kapoor and one Shri Rajeshwar Patel were the directors of the company. But since December 4, 1976, no meeting of the board of directors of the company was held because the then directors did not convene any meeting for preparing and laying the balance -sheet and profit and loss account. Subsequently, M/s. Jaipur Udyog Limited moved a petition under Section 186 of the Act before the Company Law Board on or about February 14, 1979, whereby it was prayed that an ordinary meeting of the company should be immediately convened for the purpose of electing new directors of the company and on the said application, the Company Law Board passed an order dated June 23, 1979, directing M/s. Jaipur Udyog Limited to take steps in accordance with Section 167 of the Act and, thereafter, the Regional Director of the Company Law Board by his order dated May 3, 1980, called an annual general meeting to be held on May 21, 1980, and in the meeting which was held on May 21, 1980, three persons were nominated as directors of the company out of whom two persons, namely, K.P. Saxena and Ms. Singatwadia, did not give their consent within the prescribed period and the third member, Shri S.S. Lohar, convened a meeting and appointed Shri M.S. Singatwadia as additional director until the next annual general meeting but before that on February 14, 1981, Shri S.S. Lohar and Shri K.P. Saxena resigned from the directorship of the company and the third additional director Shri M.S. Singatwadia convened a meeting of the board of directors on March 2, 1981, wherein Shri Kiran Chand Ghoshal, Shri Shikharilal Bagla and Shri N.S. Rajaram were co -opted as directors of the company. Shri Rajaram expired on January 24, 1982, and in his place Shri Loknath Bansal was co -opted as director. After the new management had taken over, they filed the balance -sheet and profit and loss account for the years ended June 30, 1980, and June 30, 1981, in the office of the petitioner on January 18, 1983. The balance -sheet and profit and loss account for the year ending June 30, 1982, were submitted in the office of the petitioner on January 17, 1983 (sic). In the said reply, it has also been stated that the balance -sheets and profit and loss accounts that had been filed by thecompany for the years ending June 30, 1980, and June 30, 1981, andJune 30, 1982, show that the company has been carrying on business regularly and that it is incorrect to state that the substratum is lost within the meaning of Section 433(c) and (f) of the Act.
(3.)A rejoinder to the aforesaid reply has been filed on behalf of the petitioner. In the said rejoinder, it has been asserted that the balance -sheets and profit and loss accounts that have been submitted by the company for the years 1976 -77 to 1980 -81 show that the company has not done any business worth the name and that the management was defunct during the period 1976 -77 to 1980 -81. Along with the said rejoinder, a copy of the resolution dated December 5, 1983, has been annexed as annexure 7 to the said rejoinder. By the said resolution it was resolved that consent is accorded to sell or otherwise dispose of the three farms of the company at the best market rates and the board of directors have been authorised to take necessary steps in that regard.