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Chemical Enterprises and anr. Vs. Kalpanalok Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtPunjab and Haryana High Court
Decided On
Case NumberCompany Petition No. 149 of 1980
Judge
Reported in[1984]55CompCas552(P& H)
ActsCompanies Act, 1956 - Sections 433, 434 and 439; Companies (Court) Rules, 1959 - Rule 34
AppellantChemical Enterprises and anr.
RespondentKalpanalok Ltd. and ors.
Appellant Advocate R.K. Talwar, Adv.
Respondent Advocate Bagirath Dass,; A.K. Jaiswal and; Ramesh Kumar, Advs
DispositionPetition dismissed
Cases ReferredBipla Chemical Industries v. Shree Keshariya Investment Ltd.
Excerpt:
.....with the leave of the judge, be allowed to appear at the hearing of the petition. 14. after taking into consideration all the aforesaid circumstances, i order that in case the respondents fail to pay the decretal amounts with costs of the trial court and costs of this petition to the petitioners by october 31, 1982, the petition shall be advertised......it on the petitioner or his advocate at the address given in the advertisement. again, in the form of notice which is served by such a person on the petitioner or his advocate, it is stated that he intends to appear at the hearing of the petition advertised. it is thus clear from the rule and the form that the hearing of the petition means the date/dates on which the petition comes up before the court after it has been advertised according to the rules.12. i am fortified in the above observations by the judgment of the supreme court in 'national conduils (p) ltd. v. s.s. arora [1967] 37 comp cas 786 (sc), wherein it has been observed by j.c. shah j., speaking for the court, that a petition for winding up cannot be placed for hearing before the court, unless the petition is.....
Judgment:

Rajendra Nath Mittal, J.

1. This is a petition under Sections 433, 434 and 439 of the Companies Act, 1956.

2. Briefly, the facts are that respondent No. 1 namely, Kalpanalok Ltd., is a limited company and respondent No. 2 is one of its directors. The registered office of the company is at Katra Jaimal Singh, Amritsar, in the State of Punjab. However, it is operating mainly from its administrative office at Bombay. The objects of the company, inter alia, are to arrange, produce, acquire, publish, dispose of and distribute films of every description and kind. At present, it is carrying on the business of production, distribution, exploitation and exhibition of motion pictures. It has been borrowing money from time to time for the purpose of their business. It produced some successful pictures.

3. Petitioner No. 1 filed Suit No. 9004 of 1972, in the City Civil Court, Bombay, for the recovery of Rs. 4,346 against the respondents which was decreed against respondent No. 1 for the recovery of Rs. 4,000 plus costs amounting to Rs. 272.47 and future interest at the rate of 6 per cent. per annum from the date of decree till realisation on the sum of Rs. 4,000, on August 23, 1976. The amount was to be paid by monthly instalments of Rs. 200 each and in the event of default of any two instalments, the whole amount was payable immediately. (Copy of the decree is annex. 'A').

4. Petitioner No. 1 filed another Suit No. 9028 of 1972, in the City Civil Court, Bombay, for the recovery of Rs. 12,494.10 against the respondents which was Rs. 11,000 only with future interest at the rate of 6 per cent. per annum from the date of decree till realisation and costs amounting to Rs. 504'35, on August 23, 1976. The amount was to be paid by monthly instalments of Rs. 400 each and in the event of default of any two instalments on the due dates, the whole amount was payable immediately. (Copy of the decree is annex. ' B ').

5. Petitioner No. 2 filed Suit No. 9167 of 1972, in the City Civil Court, Bombay, for the recovery of Rs. 8,518.73 against the respondents. The suit was decreed on August 23, 1976, against respondent No. 1 for Rs. 7,500 only with future interest at the rate of 6 per cent. per annum from the date of the decree till realisation and costs amounting to Rs. 405.06. The decretal amount was to be paid by monthly instalments on the due dates, (sic) the whole amount was payable immediately. (Copy of the decree is annex. 'C').

6. The company did not pay the decretal amounts in spite of repeated requests and demands. Consequently, the petitioners served a statutory notice of demand dated June 28, 1978, on the company (copy annex. 'D') which was duly received by it and yet the amounts have not been paid.

7. It is alleged that the failure of the company to pay the undisputed decretal amounts is conclusive proof of the fact that it is unable to pay its debts within the meaning of Section 434 of the Companies Act. It is further averred that the company owes an amount of Rs. 10,000 to Smt. Shakuntala Arora, Rs. 4,000 to Smt. Jagjeet Kaur, Rs. 7,500 to Smt. Kanta Anand, Rs. 5,000 to Naval Kishore Goenka, Rs. 5,000 to Ram Gopal Kalya, Rs. 7,500 to Smt. Shankuntala Bhalla, Rs. 5,000 to Smt. Pushpa Malhotra, Rs. 5,000 to Rakesh Bhalla, Rs. 5,000 to Smt. Prem Uppal and Rs. 15,000 to Smt. Shakuntala Jhaver. The company, in addition, is also liable to pay interest to them at the rate of 15 per cent. per annum from the dates on which the debts were taken by it. It is further alleged that the company has practically no assets and has very large debts which it is unable to pay. It is also unable to do any business for lack of funds. Consequently, it is prayed that the company be ordered to be wound up.

8. The petition was contested by the respondents who denied the allegations of the petitioners. However, on September 30, 1982, Mr. Bhagirath Dass made a statement that the respondent-company would pay the decretal amounts of all the three decrees along with costs of the suits and costs of the petition which would be assessed by the court, by October 31, 1982, and that in case it failed to do so, it would have no objection if the petition was advertised. From the above statement, it is clear that the company admitted its liability to pay the decretal amounts and agreed to pay the same by October 31, 1982, and it also agreed that in case the company failed to pay the amounts, the petition may be ordered to be advertised.

9. However, the learned counsel for the petitioners sought to urge that even if the company pays the amounts of the petitioners, the other creditors are still entitled to continue the petition and get it advertised. In support of his contention, he makes a reference to Rule 34 of the Companies (Court) Rules, 1959, and In re Bagai Foods & Beverages Pvt. Ltd : Dr. Avanindra Kumar Tyagi v. Bagai Foods & Beverages Pvt. Ltd. [1974] 44 Comp Cas 543 (Delhi).

10. I have given due consideration to the argument of the learned counsel but regret my inability to accept the same. He made a reference to Rule 34 ibid, relevant part of which reads as follows :

'34. Notice to be given by persons intending to appear at the hearing of petition.--Every person, who intends to appear at the hearing of a petition, whether to support or oppose the petition, shall serve on the petitioner or his advocate, notice of his intention at the address given in the advertisement ......Such notice shall be in Form No. 9, with such variations as thecircumstances may require, and where such person intends to oppose the petition, the grounds of his opposition, or a copy of his affidavit, if any, shall be furnished along with the notice. Any person who has failed to comply with this rule shall not, except with the leave of the judge, be allowed to appear at the hearing of the petition.'

Form No. 9

(See Rule 34)

(Heading as in Form No. 1)

Company Petition No.

of 19Notice of Intention to Appear

To

......................................

......................................

Take notice that A, B, intends to appear at the hearing of thepetition advertised to be heard on the day of 19and to oppose (or support) such petition. Dated (Sd.) (Name)Address : (Note : Grounds of objection or copy of the affidavit, if any, should be served with the notice.)'

11. From the perusal of the said rule and the form it is evident that a notice is given under that rule by a person that he intends to appear at the hearing of the petition in order to support or oppose the same. The question arises as to what the words 'the hearing of the petition' means. The rule provides that a person who serves the notice has to serve it on the petitioner or his advocate at the address given in the advertisement. Again, in the form of notice which is served by such a person on the petitioner or his advocate, it is stated that he intends to appear at the hearing of the petition advertised. It is thus clear from the rule and the form that the hearing of the petition means the date/dates on which the petition comes up before the court after it has been advertised according to the Rules.

12. I am fortified in the above observations by the judgment of the Supreme Court in 'National Conduils (P) Ltd. v. S.S. Arora [1967] 37 Comp Cas 786 (SC), wherein it has been observed by J.C. Shah J., speaking for the court, that a petition for winding up cannot be placed for hearing before the court, unless the petition is advertised. I also get support in the above observations from Bipla Chemical Industries v. Shree Keshariya Investment Ltd. [1977] 47 Comp Cas 211 (Delhi). In that case, after filing of the petition for winding up the company by the creditors, some other creditors appeared to oppose the admission of the petition forwinding up. It was observed therein that the creditors inclined to oppose the winding up were not entitled to be heard at the stage of the admission of the petition for winding up. It is relevant to point out that Rule 34 is meant for the creditors who want to join the proceedings to support or to oppose the petition for winding up.

13. The case In re Bagai Foods and Beverages Pvt. Ltd. [1974] 44 Comp Cas 543 (Delhi), referred to by Mr. Talwar, no doubt helps the counsel to some extent, but with utmost respect to the learned judge, I am unable to persuade myself to accept the said view. It may also be relevant to point out that Form No. 9 and the observations in National Conduits (P.) Ltd.'s case [1967] 37 Comp Cas 786 (SC), were not brought to the notice of the learned judge. It is further relevant to point out that in the present case none of the alleged creditors even served a statutory notice on the company claiming the amount alleged to be due to them. I, consequently, reject the submission of Mr. Talwar.

14. After taking into consideration all the aforesaid circumstances, I order that in case the respondents fail to pay the decretal amounts with costs of the trial court and costs of this petition to the petitioners by October 31, 1982, the petition shall be advertised. However, if they pay the amounts as stated above, the petition shall stand dismissed. Costs of the petition are assessed at Rs. 1,000. Adjourned to November 4, 1982, to see whether the amounts are paid by the company.


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