Satish Chandra, J. - (1.) THIS is an application by the Registrar of Companies, U.P., Kanpur, under Section 433{c) and (e) of the Companies Act, 1956. It prays that Messrs. M. K. Brothers (Private) Ltd., Kanpur, be wound tip by the court under the provisions of the Companies Act, 1956.
(2.) MESSRS . M. K. Brothers (Private) Ltd., Kanpur, the respondent, was incorporated on June 15, 1950, under the Indian Companies Act, 1913. Its registered office is situate at Silver Oaks, Civil Lines, Kanpur. The main object of the company is to carry on the business of exporters, importers, distributors, wholesale and retail dealers, commission agents of textile fabrics of all kinds as also to buy and sell raw cotton, wool, silk, jute, hemp and other raw materials, etc. The share capital of the company was Rs. 33,000. It was held by three persons who were closely related to each other. Two of the shareholders, namely, Moti Chandra and Kailash Nath, were directors of the company. Moti Chandra was the managing director. The company filed a balance -sheet as at October 26, 1962, which disclosed the state of affairs of the company as follows : From the balance -sheet, it is apparent that the company has incurred miscellaneous loss and expenses to the tune of Rs. 8,95,147. It is evident that though the share capital of the company was Rs. 33,000, it had incurred loss and expenses to the tune of Rs. 8,95,147. The company had virtually no fixed assets. It is obvious that the losses and expenses incurred by the company are far in excess of the share capital. The share capital has virtually disappeared. The company and its directors did not file the balance -sheet after the year 1962. For default in filing the balance -sheets with the Registrar of Companies for the years 1963, 1964 and 1965, the company was prosecuted by the City Magistrate, Kanpur, on July 31, 1967. The City Magistrate imposed a fine of Rs. 1,200. The company and its directors were also prosecuted under Section 220 of the Act, for default in filing the balance -sheet as at October 26, 1966, and they were convicted and fined a sum of Rs. 100 each on December 13, 1968. In spite of it, the company continued to commit defaults and did not file the balance -sheets for subsequent years, namely, 1966 and 1967. For this offence, they were again prosecuted, convicted and fined by the concerned Magistrate. In spite of these prosecutions and convictions, the company continued its habit of default in filing the balance -sheets for the subsequent years. In fact, no balance -sheet for any of the years subsequent to 1967 has been filed till now. It is apparent that the company and its directors are habitual defaulters and in spite of repeated reminders, they have wilfully failed to file it with the Registrar of Companies.
(3.) IT has been stated in the counter -affidavit that the company was unable to file the balance -sheets because its account books were produced in a suit pending in a court of law. It has also been stated that the directors made various attempts to get the books but the courts refused to release them. It has, however, been stated in the reply of the managing director dated February 15, 1971, that the books which have been filed in court relate to the years 1962 -63 and 1963 -64. He further stated that the court had granted permission to inspect the books. At first, the box containing the books was not traceable but recently they have come to know that the same has been traced out and they have applied again to inspect the books. This was stated in the reply dated February 15, 1971, but till then and now balance -sheet has not been filed. There is no reliable explanation for all this delay. If the respondent -company's directors were keen to file the balance -sheet, there was nothing to prevent them from filing it. They have had several years at their disposal for this purpose.;