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M/S Sharda Computer Forms Private Limited v. M/S Shrayash Paper Private Limited - SPECIAL APPEAL DEFECTIVE No. 520 of 2006  RD-AH 12655 (1 August 2006)
Chief Justice's Court
Special Appeal No. 520 of 2006
M/S Sharda Computer Forms Private Ltd.
M/S Shrayash Paper Private Ltd.
Counsel for the Appellant : Mr. Pankaj Bhatia
Counsel for the Respondent : Mr. Manish Goyal
Hon'ble Ajoy Nath Ray,CJ
Hon'ble Ashok Bhushan,J
We are in respectful agreement with the reasoning given and the order passed by Hon'ble Mr. Justice Sunil Ambwani on the 19th of May, 2006.
By that order his Lordship passed a final order of winding up after advertisement has duly been published on receipt of winding up petition of a petitioning creditor who had served the statutory notice of debt.
At this stage, where the advertisements have already been issued, the Company faces the steep and uphill task in resisting winding up. It has to show that it is so commercially viable that it would be unjust to wind it up even though the admitted debt of the petitioning creditor is outstanding.
This has to be proved to the satisfaction of the Court. If this cannot be proved, the advertisements after receipt of winding up petition are ordinarily presumed to brand the Company as a continuing threat to the commercial world, as it might incur further debts and land people up in financial problems even thereafter.
The Company would have to bring supporting materials from the secured creditors like Bank; the details of workers would have to be given; the current running of the Company would have to be shown by appropriate evidence. The bank accounts would have to be proved; the way the Company has been functioning regularly by holding annual general meetings and directors' meetings would also have to be shown to the Court.
The materials in this regard are practically zero. Only balance sheets have been produced before the Hon'ble Single Judge and it is not known whether these were passed by share holders at the appropriate annual general meetings or not, at least, that is the case so far as the 2005 balance sheet is concerned (year ending 31.3.2005).
In these circumstances, the appeal has to be and is hereby dismissed.
If the Company is viable, provision exists in the Companies Act for making it live and for obtaining orders of Court to that effect. As at present, the Company does not show itself as a viable unit on the papers before the Hon'ble Single Judge and before us. The appeal is dismissed without any order as to costs.
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