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Current Transport and Finance P. Ltd. Vs. Sardar Singh and Others - Court Judgment

LegalCrystal Citation
Subject Company
CourtDelhi High Court
Decided On
Judge
Reported in[1986]59CompCas767(Delhi)
ActsCompanies Act, 1956 - Sections 141, 446, 446(2), 452, 477, 542 and 543; Companies (Court) Rules, 1959 - Rule 6; Code of Civil Procedure (CPC), 1908 - Sections 141 - Order 22, Rule 4; Limitation Act, 1963 - Schedule - Article 120
AppellantCurrent Transport and Finance P. Ltd.
RespondentSardar Singh and Others
Cases ReferredRam Kala v. Assistant Director
Excerpt:
.....or they cannot be made applicable. there is, thereforee, no escape from the conclusion that the provisions of order 22, rule 4, read with section 141 of the code of civil procedure apply to the present proceedings as well......the official liquidator has been obtaining adjournments for taking steps for bringing the legal representatives on record. till this date, no application has been moved for bringing such legal representatives on record. at the last hearing, an order was, thereforee, made that more than 90 days had already expired and the question arose whether the petition should be treated as having abated. mr. nand kishore, however, obtained adjournment, and has addressed arguments today. 5. order 22, rule 4, of the code of civil procedure makes provisions for bringing the legal representatives on record where one or more defendants died and the right to sue survives. an application has to be moved in such circumstances for bringing the legal representatives of the deceased-defendant on record.....
Judgment:

D.R. Khanna, J.

1. The official liquidator representing the Current Transport and Finance (P.) Ltd., now in liquidation, has moved this petition under section 446, 477, 452 and 543 of the Companies Act, 1956, for the recovery of Rs. 6,000. It is based upon a hire-purchase agreement which respondent No. 1 entered into with the company with respect to vehicle No. BRB-2478. Respondent No.2 stood as guarantor. According to the official liquidator, Rs. 6,000 is still due to the company under the agreement which respondents No. 1 and 2 have failed to pay.

3. Respondents No. 3 to 5 are the ex-directors of the company who were sought to be made personally liable under sections 542 and 543 of the Companies Act. Anand J., however, directed that proceedings against them would remain held over. Mr. Nand Kishore is not pressing these proceedings and states that if need be, appropriate independent action will be initiated.

4. As regards respondents Nos. 1 and 2, notices were issued to them. The order dated November 3, 1982, of Anand J. shows that it had been reported that both these respondents died. Thereafter, the official liquidator has been obtaining adjournments for taking steps for bringing the legal representatives on record. Till this date, no application has been moved for bringing such legal representatives on record. At the last hearing, an order was, thereforee, made that more than 90 days had already expired and the question arose whether the petition should be treated as having abated. Mr. Nand Kishore, however, obtained adjournment, and has addressed arguments today.

5. Order 22, rule 4, of the Code of Civil Procedure makes provisions for bringing the legal representatives on record where one or more defendants died and the right to sue survives. An application has to be moved in such circumstances for bringing the legal representatives of the deceased-defendant on record and made a party. Article 120 of the Limitation Act, 1963, prescribes 90 days' period of limitation for getting such legal representatives made a party. Order 22, rule 4(3), further lays down that where within the time limited by law no application is made under Order 22, rule 4(1), for causing the legal representatives to be made a party, the suit shall abate as against the deceased defendant.

6. Admittedly, no application under order 22, rule 4, has so far been moved for getting the legal representatives made parties to these proceedings. This is in spite of the fact that respondents Nos. 1 and 2 had died long back much before the prescribed period of 90 days. The official liquidator too had come to know of their death almost a year back. Mr. Nand Kishore, however, has contended that Order 22, rule 4, applies to suits only and that the present proceedings being under section 446 of the Companies Act, they cannot be treated as a suit. However, he ignores that as per provisions contained in section 141, CPC, the procedure provided in the Code in regard to suits has to be followed as far as it can be made application in all proceedings in any court of civil jurisdiction. In other words, proceedings set in motion on moving of applications, are as well governed by the same procedure as is applicable to suits, unless there is anything in the context to suggest otherwise, or they cannot be made applicable. None such has been shown which should render the present proceedings as not governed by the procedure applicable to suits. It may be noted here at this stage that rule 6 of the Companies (Court) Rules, 1959, envisages that save as provided by the Companies Act or by these rules the practice and procedure of the court and the provisions of the Code so far as applicable, shall apply to all proceedings under the Act and the Rules. No other provisions under the Act and rules has been brought to the notice of this court by the official liquidator which prescribes procedure other than that postulated by the Code of Civil Procedure with regard to the bringing of legal representatives of the deceased defendant on record. There is, thereforee, no escape from the conclusion that the provisions of Order 22, rule 4, read with section 141 of the Code of Civil Procedure apply to the present proceedings as well. No application having been moved for bringing the legal representatives of the deceased respondents on record within the period prescribed, the petition has to be treated as having abated.

7. Mr. Nand Kishore has placed reliance upon a Full Bench decision of this court given in Shri Jaimal Singh Makin v. Official Liquidator of Majestic Financiers (P.) Ltd. : AIR1978Delhi169 . The same, however, does not come to the avail of the official liquidator, inasmuch as the controversy involved in that decision was whether the remedy of a suit under section 446(2)(a) excluded the remedy by way of a petition under section 446(2)(b) was competent and the official liquidator need not file a suit under section 446(2)(a). The matter relating to the binding of legal representatives of the deceased respondent was not in controversy at all in that decision.

8. Reliance was next placed upon another Full Bench decision of the Punjab & Haryana High Court given in Ram Kala v. Assistant Director, Consolidation of Holdings, Punjab, Rohtak , is again of no assistance to the official liquidator as the question related to the applicability of the provisions of the Code of Civil Procedure to writ jurisdiction of the court. In this regard, the Explanationn to section 141, CPC, itself makes clear that the expression 'proceedings' under that section does not include any proceedings under article 226 of the Constitution.

9. In view of the discussion above, the petition has to be treated as


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