V.S.KOKJE, J. - (1.) THIS is an appeal filed by M/s. Sand Plast (India) Ltd., (hereinafter referred to as the 'appellant -Company') which is a Company registered under the provisions of the Companies Act, 1956 (in short 'the Act') against an order dated 19.3.2001 admitting a petition for its winding up, filed by M/s. I.T.C Bhadrachalam Finance and Investment Ltd. (hereinafter referred to as 'the Company -petitioner'), on the ground that the appellant -Company is unable to pay its debt. The company petition was filed in the High Court on 9.1.1997. On 6.2.1997, notice was directed to be issued to the appellant -Company to show cause as to why the petition be not admitted. Reply was filed by the appellant -Company in answer to the show cause notice and meeting the new points raised in the reply, rejoinder was filed by the Company -petitioner. In its reply to the winding up petition, the appellant -Company had raised certain preliminary objections. Learned Company Judge decided those objections by his order dated 15.9.1998. The preliminary objections raised were in respect of the defective affidavit filed in support of the petition in violation of Rules 18 and 21 of the Companies (Court) Rules, 1959 without any authority of law, affidavit not being in the specified form No. 3 of the Rules, affidavit not disclosing source of information on the basis of which contents of the petition were verified, absence of resolution of the Board of Directors of the Company -petitioner which filed the winding up petition etc. The preliminary objections were rejected by the learned Company Judge. An appeal was filed against the aforesaid order dated 15.9.1998 before the Division Bench of this Court which rejected the appeal on 14.12.2000 regreting the delay in disposal of the company petition and making the following observations: Under such circumstances, we direct that the company petition be posted before the Judge for formal admission of the petition and fixing of a date for hearing and for a direction as to the advertisement to be published and proceed further in accordance with the provisions of the Act and the rules made thereunder. We request the Hon'ble Company Judge to dispose of this matter within three months in view of the reasons mentioned in paragraphs, supra.
(2.) THE case was thereupon listed before the learned Company Judge who permitted the appellant -Company to file its reply on merits and passed order dated 19.3.2001, after hearing both the parties, admitting the petition and directing advertisement to be issued. It is this order, which passed order dated 19.3.2001, after hearing both the parties, admitting the petition and directing advertisement to be issued. It is this order, which is under challenge in this appeal. It is noteworthy that though the Division Bench had indicated that the Judge had to pass a formal order of admission and fix a date of hearing and for direction as to advertisement, the learned Company Judge gave full hearing on admission and then passed the order admitting the petition. The appellant -Company contends that mere inability to pay debt is not enough for admitting a petition for winding up or to order winding up of a Company. It is contended that the learned Company Judge, while admitting the petition, was obliged to consider as to whether the inability to pay debt is an outcome of any deliberate or designed action or mere temporary set -back affecting the economy and the market. It was further contended that the learned Company Judge was obliged to take into consideration not only the temporary inability to pay debts but the entire status and position of the appellant -Company in the market had to be taken into account. It is further contended that a petitioner claiming winding up is obliged to show that the financial status or monetary substratum or the commercial viability of the Company has gone so low and down that winding up is obviously unavoidable. It was contended that the appellant -Company was a running concern and even after passing through a critical phase, its viability had remained un -affected. It was also contended that the appellant -Company received concrete proposals on behalf of public sector as well as private sector undertakings for turn key plants for the manufacture of fly -ash bricks as also proposals from financial institutions and the Government of Kazakasthan for certain projects which showed that the services rendered by the Company were very much in demand and it was not a dead concern. It was further contended that the appellant -Company had almost a monopoly in the requisite technology for manufacture of bricks with the use of fly -ash. The need for promoting the fly -ash project was recognised by the Government of India as also by the Supreme Court and other High Courts and the Government of India had also made it mandatory to all thermal power plants to facilitate the setting up of fly -ash utilisation units and in view of this, the technology developed by the appellant -Company was very much in demand. In view of the utility of the company's service, the Delhi Development Authority had made available free of cost prime land in the heart of Delhi for setting up the fly -ash brick plant and for that very reason, the financial institutions and the Government had already granted permission for installation of the fly -ash brick plant at New Delhi and for shifting the plant from Behror. All these things were not considered, according to the learned Counsel for the appellant -Company, by the learned Company Judge, while admitting the company petition.
(3.) IT was further contended that the relief of winding up was a discretionary relief and the Court had to find out whether the winding up would be in the interest of justice and also in the public interest. As the Company was viable and solvent, it would not be in the interest of justice to wind it up. Also in view of the country's need to tackle the fly -ash issue, it was contended that it would not be in public interest to wind up the Appellant -Company at a stage when the Company was undergoing revival process. This aspect was also lost sight of by the learned Company Judge, according to the learned Counsel for the appellant -Company.;