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Wednesday, Jul 02, 2003

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HC orders winding up of Ahura Welding

Our Legal Correspondent


THE Madras High Court has ordered winding up of the Coimbatore-based Ahura Welding Electrode Manufacturers Ltd, producers of iron and steel materials, for failure to meet their debts by paying the outstanding liability.

Mr Justice A. Ramamurthi, who heard the petition filed by Steel Authority of India Ltd, Coimbatore, under Sections 433(e) and (f), 434(1)(a) and 439(1)(b) of the Companies Act, for winding up of the company, said that the respondent (Ahura Welding) had transaction with the petitioner, and in the course of the deal, the respondent was liable to pay a sum of about Rs 2 crore. Statutory notice was also issued, and no payment had been made.

Considering the fact that in spite of admitting the company petition and even after the publication of the petition in newspapers, and in spite of sufficient opportunities given, the respondent had not paid the amount, and as such, was unable to pay the amount. There was no other alternative to order winding up of the respondent company on the ground that it was just and equitable.

According to the petitioner, which was a Central public sector undertaking, the respondent's representative had discussions on July 13, 1999 with the petitioner, and vide their letter dated July 14, 1999, the respondent had agreed to settle the outstanding sum of Rs 2.50 crore by March 31, 2000. However, the promised payments were not forthcoming from the respondent, and this constrained the petitioner to address a letter dated December 22, 1999 reminding them about the dues.

In response to the legal notice dated May 17, 2000, asking the respondent to pay the sum of Rs 2,42,21,173, the respondent replied on August 4, 2000 admitting their liability and requesting the petitioner company to withhold initiation of legal action to recover the dues.

Since the respondent, despite the legal notice, was deemed to be unable to pay their dues within the meaning of Section 434(1)(a) of the Companies Act, the petitioner had filed the present petition for winding up.

The Judge, while ordering winding up of the respondent company, said that the Official Liquidator was appointed as liquidator of the company, who shall take charge and proceed further.

The directors of the respondent company shall file statement of affairs within three weeks.

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