Judgment :- This Company Petition has been filed seeking to wind up the Respondent Company namely M/s Subhiksha Trading Services Limited under the provisions of the Companies Act, 1956. 2. The respondent company was incorporated as a private limited company on 10.4.1997 with authorized share capital of Rs. 33 crores consisting of 33 crore equity shares of Re. 1/- each and its main objects are as follows: (a) To trade in any articles, goods, rights possessions of any nature and of any use being industrial, commercial, household, technical and in such process to buy, sell acquire, lease any merchandise, goods or property of any form whatsoever as authorised dealers, stockists, agents, brokers, factors and render all such services in the ordinary course of business to market the goods in a consumable state. (b) To carry on the business of importers, exporters, buyers, sellers, dealers, stockists, suppliers, wholesalers, retailers, jobbers, contractors, storers, lessors, hirer of goods of every description and goods, components, sub-components, consumables, peripherals or products or articles involved in the goods and to act as agents for any products or articles involved in the goods and to act as agents for any such articles, goods or any services for Indian or overseas principals. (c) To carry on, in any mode, the business of storekeepers in all its branches and in particular to buy, sell and deal in goods, stores, consumable articles, chattels and effects of all kinds, both wholesale or retail and to transact every kind of agency business. 3. On the request of the respondent company, the petitioner bank granted a working capital demand loan of Rs. 15 crores on 13.12.2006 with a special limit of cash credit of Rs. 5 crores. In addition to that, a revolving short term loan of Rs. 15 crores was also sanctioned and the said short term loan should be used for suppliers of food grains and pulses to the Company. The said working capital demand loan and cash credit facility were granted on the basis of pari passu first charge on assets of the respondent company and pari passu second charge on the movable assets of the company. 4. The Managing Director of the respondent company Mr.R.Subramanian, executed various documents including promissory note and deed of hypothecation regarding movable assets and current assets of the Company in favour of the petitioner bank. 4. The Managing Director of the respondent company Mr.R.Subramanian, executed various documents including promissory note and deed of hypothecation regarding movable assets and current assets of the Company in favour of the petitioner bank. A deed of guarantee dated 13.12.2006 was also executed by him. The other lender banks have also given no objection for pari passu charges. Thereafter, the facility was enhanced to Rs.30 crores against working capital demand loan and a supplement deed of hypothecation was entered into apart from the deed of guarantee by Mr.R.Subramanian. Again, the said facility was enhanced to Rs.50 crores on 31.7.2007. An additional limit of Rs.25 crores was sanctioned on 20.8.2007. The company has repaid an amount of Rs.15 crores and the company has failed to repay the balance of Rs.35 crores with interest. As per the terms of sanction, the respondent company has to route a minimum amount of Rs.20 crores per month through cash credit account maintained with the bank and the company has never acted as per the terms. There was negligible cash flow with the petitioner bank. The Managing Director of the company, on discussion, agreed to pay the entire amount by 31.3.2008, which was not honoured. 5. The petitioner sent various letters to the respondent including the letters dated 2.7.2008, 9.8.2008 and 19.8.2008. In fact, in the letter dated 19.8.2008, the petitioner bank stated that there was a mutual agreement between the parties to waive all additional interest and charges and accordingly, the respondent company was to pay Rs.3597.27 lakhs to the petitioner on or before 30.9.2008, which the respondent failed to pay and even after the time was extended, the Company did not pay the amount. The Company, by letter dated 30.9.2008, requested the petitioner to renew the limit till 31.12.2008 stating that the facilities would be repaid on or before 31.12.2008, to prove its bona fide also enclosed a cheque dated 31.12.2008 drawn in favour of the petitioner towards repayment of entire facilities. The interest was increased to 16.50% p.a. from 1.10.2008, but the company failed and neglected to pay the dues of the petitioner. The cheque dated 31.12.2008 issued by the Company for Rs.35 crores was returned unpaid by its bankers when deposited by the petitioner and a notice under Section 138 of the Negotiable Instruments Act was issued. 6. As on 17.1.2009, Rs. The cheque dated 31.12.2008 issued by the Company for Rs.35 crores was returned unpaid by its bankers when deposited by the petitioner and a notice under Section 138 of the Negotiable Instruments Act was issued. 6. As on 17.1.2009, Rs. 38,66,88,190.87 was due from the respondent Company as well as Mr.R.Subramanian together with an additional interest at the rate of 2% p.m. at monthly rests from 16.1.2009 till the date of payment in full. By notice dated 19.1.2009, the facilities were recalled by the petitioner demanding the sum due to the extent of Rs. 38,66,88,190.87 comprising the principal amount of Rs.35 crores and interest of Rs.2,17,72,452.93 and penal interest of Rs.1,49,15,737.94 together with further interest at the rate of 2% p.m. at monthly rests from 16.1.2009. The petitioner has also invoked the personal guarantee executed by Mr.R.Subramanian. Despite the statutory notice issued on 19.1.2009, the respondent Company failed to make any payment. However, the respondent has raised technical objection that the notice was not served at the registered Office of the respondent Company. 7. In the reply given by Mr.R.Subramanian dated 12.2.2009, even though he sought for the recall of notice dated 19.1.2009, there was no denial of liability. That was replied by the petitioner on 18.2.2009. Through public media, it is understood that the respondent Company has defaulted to pay statutory dues including salary of employees and provident fund dues and Mr.R.Subramanian has given a press statement that the Company requires additional funds of Rs.300 crores to resurrect the Company from the financial crisis. The Company has even defaulted in payment of rents in respect of retail stores across the country since August, 2008. The petitioner has stated that Mr.R.Subramanian has floated several private limited companies to act as procuring agent for the Company and has diverted the funds from the Company to those Companies. The amounts, according to the petitioner, were diverted to various associate entities like, M/s. Cash and Carry Wholesale Traders Pvt. Ltd., Custodial Services India Pvt. Ltd., Pentagon Trading Services Pvt. Ltd., Shevaroy Holiday Resorts Pvt. Ltd., Triad Trading Services Pvt. Ltd., etc. The associate entities are controlled over by Mr.R.Subramanian along with few others. The said Mr.R.Subramanian is having 59% of shareholdings of the Company and therefore, the conduct of Mr.R.Subramanian requires a detailed investigation by lifting the corporate veil. 8. The Company has also not finalised the books of account from March, 2007. The associate entities are controlled over by Mr.R.Subramanian along with few others. The said Mr.R.Subramanian is having 59% of shareholdings of the Company and therefore, the conduct of Mr.R.Subramanian requires a detailed investigation by lifting the corporate veil. 8. The Company has also not finalised the books of account from March, 2007. The respondent Company has borrowed sums in excess of Rs.800 crores from various lenders and as on date, there are no assets worth the name available in the Company and the Company requires Rs.300 crores to restart its operations. The Company has not submitted stock statements to the petitioner since November, 2008 and there are no details available with the petitioner about the stock of the respondent Company as on date. Various shops throughout the country wherein the respondent Company was running business have been locked and therefore, it is necessary to have a detailed investigation about the affairs of the respondent Company. There is an apprehension that Mr.R.Subramanian has willfully transferred the assets of the company to various other entities. 9. A reference to the correspondence from ICICI Venture to Provident Fund, Tax and Insurance agencies, which was forwarded by the Company to the petitioner under the cover of letter dated 9.2.2009 shows the apprehension of the petitioner is correct. The letter shows that Mr.R.Subramanian is the sole decision maker of the Company, that the Company was promoted by a partnership firm called, R.S. Associates, that the Company was facing a financial crisis from November, 2008 which is contrary to the statement of Mr.R.Subramanian, that KPMG appointed by the Board is not able to get any information from Mr.R.Subramanian despite its efforts, that the Board was not provided audited accounts for 15 months, that there is a precarious situation and that there is no transparency and openness in the affairs. Hence, the petitioner filed this petition for winding up of the respondent Company. 10. It is seen in this Company Petition that there was an earlier order passed by this Court. Taking note of the serious situation, by order dated 31.3.2009, by dispensing with the notice under Section 450(2) of the Companies Act, this Court appointed the Official Liquidator as provisional liquidator, directing him to take charge of the assets of the Company as an interim measure. Taking note of the serious situation, by order dated 31.3.2009, by dispensing with the notice under Section 450(2) of the Companies Act, this Court appointed the Official Liquidator as provisional liquidator, directing him to take charge of the assets of the Company as an interim measure. This Court also directed publication of the Company Petition in one issue of Tamil daily 'Dinamani' and two English dailies, 'Times of India' and 'Indian Express'(All India Edition). 11. On the representation by the learned counsel appearing for the respondent Company in the above company petition and in the applications filed by the respondent Company in C.A. Nos.443 and 444 of 2009, this Court, by subsequent order dated 3.4.2009, taking note of the fact that the respondent would furnish security or deposit the amount proportionate to the claim amount made by the petitioner by way of settlement, ordered the publication to be deferred, making it clear that the earlier order appointing Official Liquidator shall not stand in the way of negotiation between the parties. 12. By a subsequent order dated 15.4.2009, this Court granted stay of publication of the appointment of provisional liquidator, but refused to stay the appointment of Official Liquidator indicating that the presence of Official Liquidator shall not stand in the way of the debtor company to effect any restructuring done through financial institutions. This Court suspended the publication of appointment of the provisional liquidator in Application No.443 of 2009 and C.A. No.444 of 2009 was also closed as no further orders are required. In the said stay order it is also stated as follows: "11. It is hereby made clear that apart from the accounts in electronic form 1.4.2008 to this date, the balance sheets of immediate three preceding years and the statements of the banks in respect of its operations, with all its liabilities and assets as on today shall be filed in the format as provided for in the Company Court Rules within a period of ten (10) days from today (15.4.2009)." 13. It is hereby made clear that apart from the accounts in electronic form 1.4.2008 to this date, the balance sheets of immediate three preceding years and the statements of the banks in respect of its operations, with all its liabilities and assets as on today shall be filed in the format as provided for in the Company Court Rules within a period of ten (10) days from today (15.4.2009). 14. It appears that as against the said order, an appeal has been filed and the Division Bench of this Court has stayed the said appointment of provisional liquidator and the appeal is pending. However, it is admitted that there is no stay in respect of further proceedings in the above Company Petition. Therefore, the company petition has been taken up for hearing. Thereafter, this Court by an order dated 28.8.2009 has passed the following orders: (a) Admit. (b) The petitioner is directed to advertise in Tamil Nadu Government Gazette fixing the date of hearing as 22.9.2009. (c) The petitioner is directed to publish the company petition in one issue of Tamil daily, 'Daily Thanthi' and in one issue each of English dailies, 'The New Indian Express' and 'Times of India' (All India Edition), fixing the date of hearing as 22.9.2009. (d) The petitioner is directed to publish the company petition in advance, giving not less than 14 days clear notice. (e) Call the company petition on 22.9.2009. Against the said order also the respondent herein preferred appeal before the Division Bench of this Court with an application in M.P.No.1 of 2011 in OSA No.449 of 2011 to condone the delay in preferring the appeal and that application has been disposed of. The SLP preferred by the respondent before the Supreme Court of India in Special Leave to Appeal (Civil) Nos. 3185 and 3186 of 2012 has also been dismissed by the Supreme Court, vide order dated 11.1.2012. Since the order passed by the learned single Judge in this Company Petition dated 28.8.2009 has become final and publication has been effected. 15. The learned counsel appearing for the respondent has made three fold contentions. 3185 and 3186 of 2012 has also been dismissed by the Supreme Court, vide order dated 11.1.2012. Since the order passed by the learned single Judge in this Company Petition dated 28.8.2009 has become final and publication has been effected. 15. The learned counsel appearing for the respondent has made three fold contentions. The first one is that the respondent has filed two applications in Company.A.Nos.132 and 133 of 2012, Company A.No.132 of 2012 is to accord permission to file a complaint under section 195 of IPC in respect of the offences of the Respondents of making false allegations in the petition before this Court in the above said Company Application. In Company A.No.133 of 2012 the respondent contended that the merger application is disposed of as per the order of the Apex Court dated 24.11.2009 passed in S.L.P.Nos. 29827 and 29828 of 2009 and the proceedings in the above Company Petition be deferred till a finality is reached on the merger proceedings in O.S.A.No.18 and 53 of 2011. The second contention made by the learned counsel for the respondent is that the petitioner has made several defamatory allegations against the respondent company and therefore, they must be examined and proved otherwise the company petition has to be dismissed. The third contention raised by the learned counsel for the respondent is due to global financial crunch happened in the year 2008 there is delay in disbursement of the amount and because of the increase of the outlets the respondent company had incurred heavy loss but it does not mean that the company has to be wound up. Hence, he prayed that the petition has to be dismissed. 16. Per contra, Mr.Karthik Sehsadri, learned counsel for the petitioner in this Company Petition contended that since the Company Petitions 239 and 240 of 2008 were already dismissed by this Court, there is no need to defer the hearing of Company Petition. He further contended that even after winding up order is passed, the scheme of amalgamation can be considered by this Court and Section 391 of the Companies Act specifically provides for such contingency and therefore, there is no need to defer the further hearing of the Company Petition No.68 of 2009. 17. It is the submission of the learned Counsel for the petitioner, Mr. 17. It is the submission of the learned Counsel for the petitioner, Mr. Karthik Seshadri that the stay of appointment of Official Liquidator as provisional liquidator by the Division Bench does not hamper the power of this Court in dealing with the main Company Petition for appointment of Official Liquidator after admitting the company petition. It is his submission that once the inability of the respondent to repay the debt is admitted on the facts, it requires a detailed investigation by the Central Government. It is his submission that as on date, nobody knows as to what are the assets of the respondent Company and there is absolutely nothing on record to enforce the rights of secured creditors including the petitioner. 18. It is no doubt true that the winding up is a last resort and such course would not normally be resorted to when there is a scope for making the Company live and act. On the facts and circumstances of the case, the liability of the respondent towards the petitioner bank as claimed in the statutory notice dated 19.1.2009 remains undisputed. Further, the above factual position as narrated by the Board of Directors itself shows that the respondent Company is not able to have control over its own stocks, assets, etc. It is a very strange situation wherein the respondent Company even as on date is not able to bring to light its actual assets available apart from existence of its stocks. It is anybody's knowledge that the respondent Company has been involving in the sale of perishable commodities also which formed part of the stock in trade and there is absolutely nothing to be presumed that any stock in trade in that regard even if it is available, is of any value for the purpose of payment to the creditors. In any event, the respondent Company which has just raised such a huge amount from various creditors is bound to explain as to what are the assets available as on date. When the respondent Company is totally out of control in respect of its assets, there is no purpose in refusing to interfere at least at this stage to find out as to whether there are any assets available and to retain the same in the interest of creditors to a limited extent. 19. When the respondent Company is totally out of control in respect of its assets, there is no purpose in refusing to interfere at least at this stage to find out as to whether there are any assets available and to retain the same in the interest of creditors to a limited extent. 19. Admittedly, there are umpteen number of cases where the employees are making demands for their dues, because there was no control by the Board of Directors of the respondent Company over the shops throughout India and there was vandalism and ultimately, the creditors whether they are lending creditors like, banks or non-lending creditors like, suppliers and persons who have rendered services will be left in lurch. 20. Considering the submissions made by the learned counsel appearing on either side, it is seen that the present respondent namely Subhiksha Trading Services Ltd., along with Blue Green Constructions and Investments Ltd., has come forward with Company Petition Nos. 239 and 240 of 2008 and A.No.308 of 2009 for sanctioning a Scheme of Amalgamation with effect from 30.6.2008, so as to be binding on all the shareholders and creditors of both the Companies and for the dissolution of the transferor company without being wound up. The learned single Judge of this Court by the order dated 25.10.2010 has dismissed both the petitions with an observation that the revival plan submitted by the petitioners therein, makes it obvious that the proposed Scheme is not financially viable, since it is structured on many ifs and buts and presumptions and surmises. Therefore, this court cannot permit consciously, the transfusion of the blood of several members of the public to a patient who has suffered multiple organ failure and various other ailments and whose chances of survival depends only on miracles. The appeal preferred by the respondent herein against the said order of the learned single Judge is pending before the Division Bench of this Court . 21. Now, the vehement contention of the learned counsel appearing for the respondent is that since the petitioner has made certain bald defamatory allegations against the respondent company, evidence has to be let in in this case and without letting evidence, this matter cannot be proceeded with further. Otherwise, this petition for winding up has to be dismissed. 21. Now, the vehement contention of the learned counsel appearing for the respondent is that since the petitioner has made certain bald defamatory allegations against the respondent company, evidence has to be let in in this case and without letting evidence, this matter cannot be proceeded with further. Otherwise, this petition for winding up has to be dismissed. Of course, the petitioner has made certain bald allegations against the respondent company for which whether oral evidence is required has to be seen by this court. 22. Before that, in Company Application Nos. 1066 and 1067 of 2009 filed by M/s Cash & Amp. Carry Wholesale Traders Private Ltd. for Scheme of Arrangement this Court by the order dated 28.8.2009 have been dismissed by this Court. Against which the applicants preferred appeal in OSA Nos. 301 and 302 of 2009 before the Division Bench of this Court. The Division Bench of this Court has also dismissed the appeals by order dated 5.11.2009 against which the petitioners preferred SLP before the Hon'ble Supreme Court of India in Special Leave to Appeal (C) Nos. 29827 and 29828 of 2009 and the same was also dismissed by the Supreme Court vide order dated 24.11.2009 with an observation that " Having heard the learned counsel on both sides, we see no reason to interfere in these Special Leave Petitions, except to the extent indicated herein-below:- "We are requesting the Company Court to take up for hearing on 26th November, 2009 the aforestated Scheme for Amalgamation first in point of time. On examination of the said Scheme, if the Company Court finds merit in the said Scheme in the context of financial viability of the said Scheme, then, dependent upon the view of the Company Court, it will look into the Scheme of Arrangement sponsored by Cash and Carry Wholesale Traders (P) Ltd. (C.A.Nos. 1066 and 1067 of 2009). However, if the Company Court finds that the Scheme of Amalgamation is not viable financially, then, consequent upon that finding, the Company Court will take up for hearing the winding up petitions (C.P.Nos. 26/2009, C.P.No.68/2009) and other connected winding up petitions). Before concluding, we may state that the Company Court will decide the financial viability of the Scheme of Amalgamation uninfluenced by the observations made in the impugned judgment". Hence the order of the learned single Judge has become final. 23. 26/2009, C.P.No.68/2009) and other connected winding up petitions). Before concluding, we may state that the Company Court will decide the financial viability of the Scheme of Amalgamation uninfluenced by the observations made in the impugned judgment". Hence the order of the learned single Judge has become final. 23. From the perusal of the above orders, it is seen that the winding up petition was admitted by this Court on 28.8.2009 and publication was ordered and publication was also effected. Company Application Nos. 239 and 240 of 2008 filed to approve the Scheme of Amalgamation were heard and disposed of by the learned Single Judge by order dated 25.10.2010 dismissing the said applications. Against which O.S.A.Nos. 18 and 53 of 2011 were filed by the respondent and the same is pending. 24. From the perusal of the above order, I am of the view that the respondent has not approached this Court with clear sets of facts and only in order to prolong the matter the respondent has filed applications one after another. The learned senior counsel for the respondent has already urged all these points in C.A.No.932 of 2011 and this Court after considering the same has dismissed the said application with costs of Rs.5,000/-. Even though the petitioner has made certain allegations against the respondent without producing any documentary evidence, the petitioner has advanced Rs.30 crores to the respondent and like wise other creditors also advanced some amount to the respondent, but the has not paid any amount to the petitioner as well as other creditors and most of them have come forward with Company Petitions before this Court, I am of the view that at this juncture, for the mere allegations this Court need not give any importance and with these facts I am of the view that the ingredients of Section 433(e) of the Companies Act, 1956 has been established by the petitioner since the payment could not be made by the respondent has been clearly made out. That apart, in so far as the act of the Respondent is concerned throughout all the courts have observed that the respondent has not made any payment to the creditors and default has been committed by the respondent, under such circumstances, I am of the view that the applications filed by the respondent to punish the petitioner for giving false allegations against the respondent and for examination of the petitioner in this regard are unnecessary since the Supreme Court has also held that this Court will decide the financial viability of the Scheme of Amalgamation. Hence, there is no need to clarify the order passed by the Supreme Court. Hence both the applications are closed as unnecessary. Further, the third contention of the respondent that due to the global financial crunch the company incurred heavy loss also not been proved. Even in the counter the respondent herein has not whispered anything about the stocks, cash and the details of reasons how they incurred loss to the tune of Rs.800 Crores. 25. Considering the facts and circumstances of the case, this Company Petition is ordered. The Official Liquidator attached to this Court is appointed as Liquidator to take over the assets and affairs of the respondent company. The petitioner is directed to deposit Rs.20,000/- towards initial expenditure before the Official Liquidator. the Ex-Directors of the respondent company are directed to file statement of affairs of the respondent company before the Official Liquidator within three weeks from the date of this order. Consequently, connected company applications are closed. 26. At this juncture, the learned counsel for the respondent seeks suspension of the order for a period of three weeks. Considering the circumstances narrated by the learned counsel for the respondent, this order is suspended for a period of three weeks from today.