IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : 18.08.2010 C.P.No.87 of 1998 (O&M) IN THE MATTER OF Som Nath Bhalla and others …Petitioners Versus M/s Bee Gee Corporation (P) Limited and another …Respondents CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA Present : Mr. A.C.Jain, Advocate, for petitioner Nos.1 to 5. Pt. Vinod K. Sharma, Advocates, for petitioner Nos.6 & 7. Mr. Anand Chhibbar, Advocate, for respondent No.1- Company. Mr. H.N.Mehtani, Advocate, for respondent No.2. Mr. Gurmeet Sandhewalia, Advocate, for the Punjab Financial Corporation. HEMANT GUPTA, J. (ORAL) Present is a petition for winding up of respondent No.1- Company i.e. M/s Bee Gee Corporation (P) Ltd, 25 Factory Area, Patiala, incorporated on 30.06.1947 under the Patiala Companies Act, 1996 (Samvat). After the enactment of Companies Act, 1956 (for short ‘the Act’), the affairs of the Company are governed by the provisions of the said Act. C.P.No.87 of 1998 (O&M) It has been pointed out by the petitioners that during inspection of the record in the office of Registrar of Companies, it has been found that the Company has filed the balance-sheet as on 31.3.1973 and thereafter no other balance-sheet has been filed. It has been further pointed that as per the report addressed to the shareholders of the Company, the sales have dwindled down from Rs.103.93 lac to Rs.29.59 lac for the year ending 31.3.1973. It has been also pointed out that the respondent-Company is not conducting any business and is lying closed for the last 20 years and as per the balance-sheet, the total liabilities amount to Rs.19,82,543.53. The respondent-Company has earlier filed its reply, but an additional affidavit dated 03.02.2009 was filed alongwith C.A.No.108 of 2009. In the additional affidavit, it has been pointed out that the majority shareholders of more than 75% are opposed to winding up of the respondent-Company. It has been also pointed out that petitioner Nos.6 & 7 are not the shareholders and that the other petitioners are shareholders to the tune of 10.5%. It has been stated that if in case the shareholders are aggrieved, the only remedy available to such shareholders is under Sections 397, 398 and 402 of the Act. It has been further stated that for the period ending 31.3.2007, the Company has filed annual returns and balance-sheet and that the delay in filing of such annual returns and other records has since been condoned. It has been also pointed out that the balance-sheet upto the year 31.3.2008 has been prepared and filed with the Statutory Authorities. There is no unsecured creditor of the respondent-Company except a sum of Rs.5000/- towards the Auditor’s fee. It has been also pointed out that the claim of secured creditor i.e. State Bank of Patiala stands fully paid and no outstanding amount is due and payable to the said secured creditor. It has been also pointed that the dispute with the other 2 C.P.No.87 of 1998 (O&M) secured creditors i.e. Punjab Financial Corporation is pending for final adjudication before this Court in separate proceedings. It has been also pointed that in terms of objects & ancillary objects to the Memorandum of Association, the respondent has given the premises of the Company to Rajiv Gandhi National University of Law, Patiala on the monthly lease of Rs.50,000/- and that the winding up of the Company is not at all tenable. Reference is made to the Income-Tax paid on 31.10.2006, 25.05.2007 and 25.10.2007 to point out that the Company is working and deriving profits. Petitioner No.6 filed C.A.No.946 of 2008 before this Court, pointing out that the said petitioner is a prospective buyer, who is ready and willing for purchasing the land and building of the Company for a sum of Rs.3 crores on ‘AS IS WHERE IS BASIS’ and the said purchaser undertake to discharge all the liabilities of the creditors. In reply to the said application, the Bank has stated that on the basis of final decree dated 14.10.1993, the Debt Recovery Tribunal issued a recovery certificate dated 21.8.2003 against the Company and other defendants. During the course of execution, the Recovery Officer ordered the auction of House No.17, Nihal Bagh, Baradari Garden, Patiala, which was auctioned in favour Kuldep Singh, Surinder Kumar and Devi Dayal for a sum of Rs.87 lac. The said auction was confirmed on 24.7.2006 and that the amount due to Bank stands already recovered. It has been also pointed out that the first appeal against the judgment and decree dated 14.10.1993 is pending adjudication in the Court of learned District Judge, Patiala and that the Bank’s claim against the Company and the guarantors stood satisfied subject to the decision of the first appeal filed by the borrower and guarantors before the learned District Judge, Patiala. 3 C.P.No.87 of 1998 (O&M) From the facts mentioned above, it transpires that petitioner Nos.1 to 5 are the shareholders of the Company having less than 11% of the shareholding. The petitioners have sought the winding up of the respondent-Company for the reason that it has suspended the business for a whole year, therefore, it is liable to be wound up in terms of Section 433 (C) of the Act. From the averments made in the additional affidavit dated 03.02.2009, it has come on record that the Company was deficient in its annual returns, but has filed annual returns upto the year 2007 and delay in filing the same is condoned. The Company has filed annual returns for the subsequent years as well and has paid income-tax for certain years. Therefore, it cannot be said that the Company which might have suspended its operations at some time is not working these days. I am unable to agree with the argument raised by the learned counsel for the petitioners that the affairs of the Company are to be seen on the date of filing of the winding up petition. The Court is to examine the status of the affairs of the Company on the date of passing of the winding up order. Of course by virtue of Section 441 of the Act, if the winding up is passed, it is deemed to have commenced at the time of the presentation of the petition for winding up. Therefore, the argument that the affairs of the Company as it exists on the date of filing of the petition itself are to be examined does not merit any acceptance. Keeping in view the fact that the petitioners are the minority shareholders and that defect in filing of returns stands condoned and that Company is deriving income and paying income-tax, therefore, I do not find any case for winding up of the respondent-Company at their instance. Consequently, the present petition is dismissed. 4 C.P.No.87 of 1998 (O&M) All other applications do not survive, as the petition for winding itself has been dismissed. 18.08.2010 (HEMANT GUPTA) Vimal JUDGE 5