HC Allows Dissolution Plea as Company Had No Further Assets to Realize and No Claim Exists

Case Details: Mitmilan Enterprises v. Ravindra Dyechem (P.) Ltd. - [2024] 163 taxmann.com 530 (HC-Delhi)

Judiciary and Counsel Details

• • Dharmesh Sharma, J.
  • Rajat Malhotra, ASC, Ms Dipita Pal, Ms Namrata Sanyal, Ms Jivika Jolly, Ms Priya Mishra, Amit Agnihotri, Priyanka Midha, Sachin Katkar, Himanshu Kaushik, Sahil Wadhwa, Antosh Srivastva, Ms Sudha Srivastava Saxena, Tariq Khan, Vivek Kumar Karn & M.M. Sharma, Advs. for the Respondent.

Facts of the Case

In the instant case, the winding-up order was passed against the respondent company, and an Official Liquidator (OL) was appointed. The OL filed an instant application praying to dissolve the respondent and to discharge OL as its liquidator.

The record showed that ex-directors of the company (in liquidation) had filed a Statement of Affairs and undertook to appear before OL as and when required.

As per the Statement of Affairs filed by the ex-director of the company (in liquidation), it appeared that the company (in liquidation) had one secured creditor, besides a preferential creditor, which was Central Sales Tax and an amount of Rs. 24 lacs was repaid to the secured creditor. Such payment was made by one of the ex-directors by way of the sale of his personal assets.

Moreover, the company (in liquidation) also had five unsecured creditors. However, at present, the company (in liquidation) had no assets, either movable or immovable, from which any money could be realised and the funds position of the company as on 8-5-2024 was stated to be Rs. (-) 22 thousand.

Further, despite the requisite publication of advertisements, OL received no claims in respect of the company (in liquidation). Therefore, the liquidation process had been carried out in full, and the affairs of the company (in liquidation) had been wound up.

High Court Held

The High Court held that no fruitful purpose would be served in keeping winding up proceedings pending, and thus, the instant application filed under Section 481 of the Companies Act, 1956 for dissolution of the company (in liquidation) was to be allowed, and OL was to be discharged as its liquidator.

List of Cases Reviewed

• • Meghal Homes (P) Ltd. v. Shree Niwas Girni K.K. Samiti & Ors (Para 11) followed.