Adip Mittal v Offshore Holding Company: Permission to Commence Winding Up Under IRDA
In the case of Adip Mittal v Offshore Holding Company Pte Ltd, the General Division of the High Court of Singapore heard an application by Mr. Adip Mittal, a director of Offshore Holding Company Pte Ltd, for permission to commence winding up proceedings against the company under Section 124(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018. The court, presided over by Judicial Commissioner Goh Yihan, granted the claimant permission, finding that a prima facie case for winding up had been established and that the application was made for a legitimate reason.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Permission granted to the claimant to commence winding up proceedings against the Company.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court granted Adip Mittal permission to commence winding up proceedings against Offshore Holding Company under s 124(1)(b) of the IRDA, finding a prima facie case for winding up.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Adip Mittal | Claimant | Individual | Permission granted to commence winding up proceedings | Won | |
| Offshore Holding Company Pte Ltd | Defendant | Corporation | Winding up proceedings may be commenced | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Nigel Desmond Pereira | JWS Asia Law Corporation |
| Kwek Yuan Justin | JWS Asia Law Corporation |
4. Facts
- The claimant is one of two directors of the defendant company.
- The claimant applied for permission to commence winding up proceedings against the company.
- The company's principal activities are chartering ships and boats.
- The company was originally a wholly-owned subsidiary of Mercator Lines Limited.
- The company has two shareholders: Mercator Limited and Mercator International Pte Ltd.
- Mercator International Pte Ltd was ordered to be wound up on 9 April 2021.
- The claimant deposed to the insolvency of the company.
- The company's operations have ceased and its net liabilities have remained at no less than US$1.298 million across the financial years ending on 31 March 2020 and 31 March 2021.
5. Formal Citations
- Adip Mittal v Offshore Holding Company Pte Ltd, Originating Application No 370 of 2022, [2022] SGHC 239
6. Timeline
| Date | Event |
|---|---|
| Company incorporated | |
| Mercator International Pte Ltd incorporated | |
| Mercator International Pte Ltd ordered to be wound up | |
| Affidavit of Adip Mittal dated | |
| Plaintiff’s Written Submissions filed | |
| Hearing date | |
| Grounds of decision issued |
7. Legal Issues
- Grounds for Winding Up Petition
- Outcome: The court found that the claimant had established a prima facie case for winding up.
- Category: Substantive
- Prima Facie Case for Winding Up
- Outcome: The court determined the meaning of 'prima facie case' in the context of s 124(2)(a) of the IRDA.
- Category: Substantive
- Related Cases:
- [2016] 5 SLR 1052
- [2018] VSC 701
- [2002] FCA 879
- Relevant Considerations in Deciding to Grant Permission for Winding Up
- Outcome: The court outlined the relevant considerations for granting permission, including legitimate reason and absence of improper purpose.
- Category: Procedural
- Related Cases:
- [2018] VSC 701
- [2002] FCA 879
8. Remedies Sought
- Permission to commence winding up proceedings
- Order that any winding up application be notified to the Company’s shareholders
9. Cause of Actions
- Application for permission to commence winding up proceedings
10. Practice Areas
- Insolvency
- Corporate Restructuring
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| International Entertainment Corp Pty Ltd v Soccer Australia Ltd | Federal Court of Australia | Yes | [2002] FCA 879 | Australia | Cited for the proposition that an application for leave to apply for a company to be wound up raises the issue of whether the applicant can satisfy the court that there is a prima facie case that the company is insolvent and whether the court should exercise the discretion to give leave. |
| Re Emmadart Ltd | N/A | Yes | [1979] 1 All ER 599 | England | Cited to illustrate the historical practice in England of tolerating irregular winding up applications based on directors' resolutions. |
| Phosagro Asia Pte Ltd v Piattchanine, Iouri | Court of Appeal | Yes | [2016] 5 SLR 1052 | Singapore | Cited for the definition of 'prima facie case' as proving facts from which, in the absence of an explanation, liability could properly be inferred. |
| Sharda v Bansal | Supreme Court of Victoria | Yes | [2018] VSC 701 | Australia | Cited for guidance on the meaning of 'prima facie case' in the context of an application by a director to wind up a company, and relevant considerations for granting leave. |
| Fong Wai Lyn Carolyn v Airtrust (Singapore) Pte Ltd and another | High Court | Yes | [2011] 3 SLR 980 | Singapore | Cited to highlight the difference between a prima facie case and what appears to be a prima facie case, noting the lower standard applied in derivative actions. |
| Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and others | Court of Appeal | Yes | [2018] 2 SLR 1054 | Singapore | Cited to support the point that a director has an almost-presumptive right to inspect the documents of a company. |
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) | Court of Appeal | Yes | [2021] 2 SLR 478 | Singapore | Cited for the principle that the cash flow test is the sole applicable test to determine insolvency. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 124(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 124(2)(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(2)(c) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Insolvency
- Prima facie case
- Director's application
- Permission to commence proceedings
- Legitimate reason
- Improper purpose
- Net liabilities
- Cash flow test
15.2 Keywords
- Winding up
- Insolvency
- Director
- IRDA
- Singapore
- Court
- Application
- Offshore Holding Company
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 95 |
| Winding Up | 95 |
| Company Law | 40 |
16. Subjects
- Insolvency Law
- Corporate Law
- Civil Procedure