R.S. Garg, J.
1. The original petitioners, being dissatisfied by the order dated September 16, 2004, passed in Company Petition No. 51 of 2001 Rameshbhai Ramanlal Patel v. Shree Bansidhar P. Ltd. [2005] 127 Comp Cas 806 (Guj) by the learned company judge, whereunder, the prayer of the petitioners to wind up the company has been rejected, are before this Court.
2. Mr. Ashwin L. Shah, learned Counsel for the appellants referred to the following judgments:
(a) A. Ramachandran v. Narasaraopet Electric Corporation Ltd. [1972] 42 Comp Cas 182 (AP).
(b) Orissa Trunks and Enamel Works Ltd., In re [1973] 43 Comp Cas 503 (Orissa).
(c) Virendrasingh Bhandari v. Nandlal Bhandari and Sons P. Ltd. [1980] 50 Comp Cas 54 (MP).
(d) Jivabhai Marghabhai Patel v. Extrusion Processes P. Ltd. [1966] 2 Comp LJ 74 (Bom).
(e) S. Sundaresan v. Plast-O-Fibre Industries P. Ltd. [1993] 76 Comp Cas 38 (Mad).
3. Mr. Shah, learned Counsel for the appellants contended that where a company has lost its substratum, is unable to pay its debts and is not engaged in the original business, it would always be just and proper to wind up the company. He submits that the learned company judge was absolutely unjustified in dismissing the petition at the threshold, according to him, the petition was to be admitted, advertised and only then, final order could be passed in the matter.
4. It is to be seen that the appellants father Shri Ramanlal M. Patel and his two brothers and their respective family members including appellant No. 1 were interested in various companies and partnership firms as shareholders. Certain disputes had arisen between the groups of the said three brothers in connection with the management of the said companies and firms. The members of the said three families decided to divide, distribute and/or transfer the control and management of the said companies and firms to respective groups so as to achieve smooth running of each business, after taking into consideration various representations as per the requirement. It is to be seen that in July, 1997, this Court issued an order for closure of the operations of the company on account of carbonizing process done by the company. The matter went to the BIFR and the company stated that it could carry on business of processing. It appears that thereafter, the company could not continue the business of processing, therefore, it entered into the business of warehousing. It is to be noted that appellant No. 1 himself was in the management of the respondent-company. He was director of the respondent-company and chairman of the respondent-company in 1977-78 and became managing director on February 18, 1980, and continued to be so till April 21, 1986. It is to be seen that the present appellant No. 1, after filing the present petition, filed Company Petitions Nos. 200 of 2001 and 201 of 2001 on his own behalf and in the name of his wife, seeking winding up of the company on the ground that it had lost its substratum and is unable to pay its debts. It is to be noted that in the said two petitions, the amount due was paltry, but for recovery of Rs. 8,000 or so, in both the matters, prayer for winding up was made. In the said matters, money was paid and the appellants were forced to the withdraw their petitions. Immediately, after the said petitions were dismissed, the appellants started pressing this petition and started submitting that it would be just and equitable to wind up the company.
5. So far as the question of admission of the petition and its final hearing is concerned, it would be too much to say that in each case, company petition should be admitted and the same is required to be advertised. In the business world, everybody knows that whenever a company petition is admitted and advertised, it gives a brunt to smooth running and functioning of the company and the creditors, who are otherwise satisfied with the working of the company, start recovering their money. In the business world, when everybody wants to siphon out the money given by them to a running concern, the entire empire of the company would certainly collapse. It is also to be noted that in the present matter, notice to show cause was issued to the other side and the other party filed its affidavit and submitted before the learned company judge that it was not just and equitable to wind up the company. An order of admission, if, is a formality, then we would not say anything further, but if that affects the substantial rights of the parries, then only, it can be taken into consideration. In the present matter, the learned company judge has taken into consideration all the pros and cons and has observed that the petition is based on a mala fide intention and is virtually a design with vengeance. The learned company judge has also recorded that the appellants conduct does not provide good reasons for winding up the company.
6. After hearing learned Counsel for the appellants and on going through the findings recorded by the learned company judge, we must observe that the learned single judge was absolutely justified in dismissing the petition. We must add a note here that we are in general agreement with the findings recorded by the learned single judge, therefore, we are not repeating the said findings. The appeal is dismissed.