Allowed

Prashant D. Kshirsagar v. M.G. Fashion Private Ltd. - U18101MH2003 Ptc 141420

Bombay HC3 Jul 2013CP/19/2012

Case brief

AI extract

What is this about?

The petitioner filed a winding up petition against the respondent Company for failure to pay salary arrears. Despite an undertaking to pay by instalments, the company defaulted. The court admitted the petition and allowed the winding up due to the company's illiquidity and inability to pay established debts.

What did the court decide?

The Company Petition is allowed in terms of prayer clause (a) and (b) for the winding up of the respondent Company.

Prashant D. Kshirsagar Vs M.G. Fashion Private Ltd… — Company and Corporate | Bombay HC (2013)

CP19-12.doc

Sequeira

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY PETITION NO. 19 OF 2012

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Prashant D.Kshirsagar. .. Petitioner Vs M.G.Fashion Private Limited & anr. .. Respondents

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Mr.Satyajeet P. Dighe, for petitioner. None for respondents.

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CORAM: N.M.JAMDAR, J. Wednesday 3 July, 2013

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P.C.:

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By this petition petitioner seeks winding up of the respondent Company - M.G.Fashion Private Limited.

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The facts as enumerated in the petition are that the petitioner was employed with the respondent Company as a Senior Fabric Manager. The respondent Company is registered under the Companies Act 1956, and the main object clause of Garment Export and allied activities. The petitioner while working as Senior Fabric Manager was being paid salary of Rs.50,000/- per month. Till the month of October petitioner was duly paid the salary and thereafter the respondent did not pay any salary to the petitioner. The petitioner thereafter was constrained to resign on 1 April 2009 and resignation was accepted on 30 April 2009. Thereafter the petitioner sent series of correspondence addressed to the respondent requesting to clear his bills, however arrears of salary of the petitioner were not paid. The petitioner ultimately was constrained to send notice

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under section 433 of the Companies Act 1956 demanding the arrears amounting to Rs.2,46,058/-. Since there was no reply to the statutory notice the petition for winding up came to be filed.

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The petition was accepted on 11 January 2012 and notice of the petition was duly served on the respondent. On 8 May 2012 following order came to be passed -

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“Company petition was served on respondent - company on 27^th January 2012. However, till date the company has not filed its reply. As a last chance and only by way of indulgence Company Petition is adjourned to 11^th May 2012 high on board to enable the company to file its affidavit in reply, if it so desires.”

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Thereafter on 11 May 2012 following order came to be passed by consent-

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“ The following order is passed by consent :

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(i) The Respondent Company undertakes through its Counsel to pay an amount of Rs. 2,50,000/- to the Petitioner as follows :

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(a) Rs. 1,25,000/- on or before 15th May 2012. (b) Rs. 1,25,000/- on or before 15th June 2012.

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(ii) In the event of the Respondents not complying with the undertaking as recorded in clause (i) above, the Company Petition shall without reference to this Court revive and stand admitted; made returnable within six weeks from the date of such default and advertised in two local newspapers, namely, “Free Press Journal” (in English), “NavShakti” (in Marathi) and the Maharashtra Government Gazette.

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(iii) Upon default, the Petitioner shall deposit an amount of Rs.10,000/- towards the Publication Charges with the Prothonotary and Senior Master of this Court, within one week from the date of default, failing which the Petition shall stand

CP19-12.doc

dismissed.

2. The Company Petition is accordingly disposed of.”

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Thereafter since the respondent Company did not deposit any amount as directed by order dated 11 May 2012. Petitioner vide affidavit dated 28 June 2012 placed the default on record. In view of the default committed by the respondent Company, the petition was admitted and was listed for hearing. Accordingly, thereafter the admission of the petition was duly advertised.

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On 27 June 2013, the following order came to be passed -

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On 11 May 2012, an order was passed by consent whereby respondent Company had undertaken to pay an amount of Rs.2,50,000/- to the petitioner by way of instalment, in default the petition was to stand admitted. Since there was a default the petition came to be admitted and is listed for hearing today. None appears on behalf of the respondents even though appearance of advocate is shown on the board. S.O to 3 July 2013 to be placed under the caption 'for Directions'. It is made clear that if none appears on behalf of respondents on the next date Court will proceed to pass such order as may be required in the interest of justice. The learned counsel for the petitioner will give notice to the learned counsel for the respondents on the next date of hearing and the gist of the order passed today.

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Accordingly learned counsel for the petitioner states that notice of the hearing of the petition today was given to the learned counsel for the respondents. When the matter was called out in the morning session, none appeared on behalf of the respondents and the matter was kept back in the afternoon session. None appears for the respondent. No reply is filed. There is therefore no option but to proceed with the hearing.

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CP19-12.doc

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The learned counsel for the petitioner seeks leave to replace Exhibit 'E' as according to him the said Exhibit was wrongly annexed. Leave granted. Exhibit 'E' shall be replaced within three days from today. The learned counsel for the petitioner places on record the true copy of the Exhibit that he proposes to annex. The true copy is taken on record and marked ' X'.

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The learned counsel for the petitioner submitted that at the time of admission of the petition, order was passed by consent whereby the respondent Company through their counsel had undertaken to pay the amount of Rs.2,50,000/- to the petitioner in two instalments and it was provided in the order dated 11 May 2012 that in case of default the petition would stand automatically dismissed. No reply is filed to contest the averments made in the petition. The perusal of the petition and the correspondence annexed therewith shows that the demand made by the petitioner towards the arrears of salary have not been disputed by the respondent Company. The learned counsel for the petitioner has drawn my attention to the letter dated 14 July 2010 addressed to the petitioner by respondent Company wherein the respondent – Company has acknowledged that the respondent Company was liable to pay the arrears of salary to the petitioner however, they had taken time on the ground that they had no funds to settle his dues. Thus, it is clear that the legitimate dues of the petitioner have not been paid by the respondent Company. Inspite of repeated opportunities no reply has been filed to the petition, At the time of admission, the respondent had undertaken to pay the amount to the petitioner by way of instalments which is also not paid. No dispute of whatsoever nature has been raised in this petition by the

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CP19-12.doc

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respondent Company. It is clear that respondent Company is unable to pay the debt of the petitioner and the respondent Company is not commercially solvent. In view thereof this Company petition is allowed in terms of prayer clause (a) and (b).

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N.M.JAMDAR, J.

Prashant D. Kshirsagar v. M.G. Fashion Private Ltd. - U18101MH2003 Ptc 141420

Case brief

What is this about?

What did the court decide?

Prashant D. Kshirsagar v. M.G. Fashion Private Ltd. - U18101MH2003 Ptc 141420

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

Coram

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