ORDER
Sunil Ambwani, J.
1. Heard Shri R.P. Agarwal. for petitioner, and Sri A.K. Singh for the respondent No. 1
2. This is an application to bring on record the heirs of petitioner No. 1, Sri Anil Arora, who died on 10.11.2003, along with an application for condoning the delay under Section 5 of Limitation Act, 1963.
3. In this contributory’s winding up petition filed by the three shareholders under Section 433(c), (e), (f) of the Companies Act, 1956, the first petitioner, namely, Anil Arora, died leaving the applicant, Sri Sanjay Arora, who has filed no objection certificates given by his mother and sister, stating that the interest in the share will devolve only upon the applicant. Sri A.K. Singh has opposed the application on the ground that the applicant, Sanjay Arora, is not a contributory as his name was not registered as shareholder for at least six months before the filing of the winding up petition.
4. I do not find much substance in the objection. Section 439(4)(b) of the Companies Act, 1956, provides for the competence of the contributory to file a winding up petition. The right is vested in a contributory who is an original allottee of the shares, or have been held by him, and registered in his name, for at least six months during the 18 months immediately before the commencement of the winding up, or have devolved on his thought (sic) death of a former holder (1. Italicised for emphasis by the Court. 2. Clause (b) of sub-section (4) of section 439 (Sic) the Companies Act, 1956, reads thus: “(4) A contributory shall not be entitled to present a petition for winding up, unless–(…)(b) the shares in respect of which he is contributory, or some of them, either were originally allotted to him or have been held by him, and registered in his name, for at least six months during the 18 months immediately before the commencement of the winding up, or have devolved on him through the death of a former holder.”) . Rule 101 of the Companies (Court) Rules, 1956, will apply to the case. It is admitted that late Anil Arora was shareholder on the record of the company. The fact that his son has not been registered as shareholder for six months during the last 18 months is not material as the right devolved on him after the death of former shareholder during the pendency of the company petition. The judgment in B. Nagalakshmi v. Mannargudi Transports (P) Ltd. and Ors. is not applicable, as in that case, the person who had filed the company petitioner claimed to be heir of the shareholder and that the shares were not transferred in his name. It was not a case of substitution of the heir of original, allottee who had filed the company petition.
5. The objections are overruled. The delay has been sufficiently explained. The delay condonation application as well as substitution application are allowed. Let the death and substitution be recorded in the array of parties.
Application No. A-15
6. Heard Sri R.P. Agarwal, learned Counsel for the petitioner and Sri A.K. Singh for the respondents.
7. It is admitted that the company was incorporated on 26.8.1964 to manufacture aluminum and allied products as the targeted business in its memorandum of association. The company stopped manufacturing and has not carried out any business for the last 20 years. The last return submitted by the company with the Registrar of Companies on 27.2.2002, and the last balance sheet as on 30.9.2001 annexed as annexure-3 to the petition, show an authorised capital of Rs. 5 lakhs, and issued, subscribed and paid up capital of Rs. 4,90,000. As against the fixed assets of Rs. 1,40,333.17, and loan and advances Rs. 19,025 totalling Rs. 1,59,447.42, the total liability as on 30.9.2001 was Rs. 5,12,792.78. The accumulated losses are as high as 172 per cent of the paid up capital and reserve, and the net worth is in negative.
8. The petitioners are contributories shareholders and have prayed for winding up of the company. They hold 115 out of 490 shares of the value of Rs. 1,000 per share. The company was proposed to run as a family concern with close holding of shares.
9. In the counter affidavit, it is stated that some of the loans have been paid up. The bank loan, according to Bishambher Lal Arora, managing director of the company, were settled and paid of the January 2001 and that the original suit against electricity dues was decided in favour of the company. He has made an assertion in paragraph 11 that the company is now in a position to start the business and in the supplementary counter affidavit, it is staled that the memorandum of association has been amended to authorise the company to become a franchisee of the petroleum company.
10. There is nothing to show that the resolution has been approved by the Registrar of Companies and that the company has made any efforts to start the new business.
11. In the facts and circumstances, prima facie, I am satisfied that the company is liable to be wound up both on the ground that it has not done any business for the last 20 years, failed to submit annual returns and is heavily indebted and is unable to pay its dues.
12. Let the company petition be advertised under rule 24 of the Companies Court Rules, 1959 in ‘Hindustan Times’ published from Lucknow and ‘Amar Ujala’ published from Allahabad as well as Official Gazette of Uttar Pradesh within six week. Steps within fifteen days.
13. List on 17.10.2005. Until further orders, the company is restrained to dispose of or encumber any assets and to create any liability of any kind on the company.