HC orders winding up of company after two firms seek recovery of amounts due to them

The pioneer of low-cost airlines in India Capt. G.R. Gopinath’s second large business venture — Deccan Cargo and Express Logistics Pvt. Ltd. (DCEL) — known under brand name ‘Deccan 360’ — has been ordered to wind up by the Karnataka High Court.

Capt. Gopinath launched DCEL after he sold low-cost airlines Deccan Aviation to Vijay Mallya’s Kingfisher Airlines.

The High Court directed closure of DCEL in a recent order based on petitions — one filed by Dubai-based United Aviation Services (UAS) and another by M/s Patel Integrated Logistics (PIL) Pvt. Ltd. — seeking recovery of amounts due to them by winding up the company. The court observed that the DCEL did not pay dues to these two companies even after the court offered it many opportunities. The DCEL owes Rs. 39 lakh to the UAS and Rs. 1.36 crore to the PIL.

Now, the court has ordered the official liquidator to commence the liquidation process by selling the company’s assets. About a year ago, the court had prohibited the DCEL from selling any of its assets after the two petitions were filed.

Interestingly, the DCEL had opposed the PIL’s plea while alleging that the petition for winding up was filed to “pressurise the company [DCEL] to act in accordance with dictates of PIL.” But the DCEL did not file any objection against the plea of the UAS to wind up the company. Both the PIL and the UAS knocked on the court doors in 2011 after failing in their attempts to recover their dues pending from DCEL since 2009. It was pointed out in the petitions that the DCEL had asked many of its 600-odd employees to either quit or go on long leave owing to serious financial crisis and it was selling its assets to clear debts. As the DCEL too admitted its financial difficulties in making payments, the petitioner-companies pleaded for winding up of the DCEL.

The court referred five other companies, including MindTree, which approached the court later, to the official liquidator for claiming the amount due to them through the liquidation process. The DCEL was originally incorporated as Deccan Cargo Ltd. in 2001 and later changed to DCEL in 2007–08.

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