Skip to content


Dr. Avanindra Kumar Tyagi Vs. Bagai Foods and Beverages Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtDelhi High Court
Decided On
Case NumberCompany Application No. 701 of 1972
Judge
Reported in[1974]44CompCas543(Delhi)
ActsCompanies (Court) Rules, 1959 - Rules 24, 34, 35, 96, 99, 101 and 102
AppellantDr. Avanindra Kumar Tyagi
RespondentBagai Foods and Beverages Pvt. Ltd.
Appellant Advocate C.M. Kohli, Adv
Respondent Advocate S.C. Dhanda, Adv.
Cases ReferredHari Ram Aggarwal v. Bagai Foods and Beverages
Excerpt:
- - there is, thereforee, no necessity to have replies at this stage, and there is no necessity to keep these applications pending till such time as the original petition fails or is likely to fail in the manner mentioned in rule 101. these applications are accordingly disposed of, but this order will remain on the file ;and as soon as the list in form no......has been admitted it is to be advertised in accordance with rule 99 read with rule 24 of the rules. rules 100, 101 and 102 deal with the procedure to be followed for withdrawing a winding-up petition. it is provided in rule 100 that no winding-up petition shall be withdrawn without the leave of the court, and rules 101 and 102 lay down the procedure for substituting a creditor or contributory for the original petitioner. the obvious purpose of these rules is to prevent a winding-up petition being withdrawn or failing at the instance of a petitioning-creditor or contributory at the expense of the other creditors or contributories who are not before the court as petitioners. the purpose of this rule is to provide a method by which other creditors and contributories can be brought on.....
Judgment:

D.K. Kapur, J.

1. There is a winding-up petition, Hari Ram Aggarwal v. Bagai Foods and Beverages (P.) Ltd., Company Petition No. 81 of 1972, pending in this court. A number of applications have been filed in connection with that petition, under Rules 34 and 101 of the Companies (Court) Rules, 1959. They purport to support the winding-up petition. As it happens, the winding-up petition has not yet been admitted and so far only a notice to show cause why the petition should not be admitted has been issued to the respondent-company. Thereafter, various orders have been passed and even some statements have been recorded, but the winding-up petition has not yet been admitted nor advertised. A talk of compromise has been going on which has delayed the admission and advertisement of the petition or its dismissal, as the case may be. Pending the decision regarding the admission of that petition, the present application along with 80 more similar applications have been presented by various alleged creditors of the respondent-company purporting to support the winding-up petition. Notices were issued to the respondent-company to file replies in these applications, but no replies have been filed. I am told that in fact some replies have been filed, but that would not in any way affect the legal position which I am about to deal with. One of the questions that arises for consideration is, whether these applications should remain pending during the pendency of the winding-up petition or whether they can be decided forthwith. This would depend on the procedure to be followed in such cases, under Rules 34 and 101 of the Companies (Court) Rules, 1959. The procedure to be followed by the court when entertaining a winding-up petition is set out in Part III of the Companies (Court) Rules, 1959, framed by the Supreme Court, under Section 643 of the Companies Act, 1956. It is necessary first to refer to that procedure.

2. A petition for winding-up has to be placed before the court after presentation for the purpose of admission and directions regarding advertisement. This is provided for by Rule 96. After the petition has been admitted it is to be advertised in accordance with Rule 99 read with Rule 24 of the Rules. Rules 100, 101 and 102 deal with the procedure to be followed for withdrawing a winding-up petition. It is provided in rule 100 that no winding-up petition shall be withdrawn without the leave of the court, and rules 101 and 102 lay down the procedure for substituting a creditor or contributory for the original petitioner. The obvious purpose of these rules is to prevent a winding-up petition being withdrawn or failing at the instance of a petitioning-creditor or contributory at the expense of the other creditors or contributories who are not before the court as petitioners. The purpose of this rule is to provide a method by which other creditors and contributories can be brought on record as substitute petitioners. I need not at the moment deal with all the details of the procedure required to be followed. It is sufficient to state that if a creditor or contributory withdraws from a pending winding-up petition, there is a procedure which gives a right to other creditors or contributories to step into his shoes to continue the winding-up petition. If such permission is granted by the court, Rule 102 allows the court to permit the winding-up petition to be suitably amended so as to bring the grievances of the substituted petitioner before the court in place of the original petitioner. The question which I have to deal with now is as to when and how a creditor seeking substitution has to move the court.

3. The procedure in an advertised petition is for the advertisements to appear in the newspapers and any person may give notice to the counsel for the petitioner that he wishes to oppose or support the petition. This is stated in Rule 34. Now, the present petition has not been directed to be advertised ; is it, thereforee, open to a person to give notice to oppose or support the petition even if there has been no advertisement Learned counsel for the applicant submits that there is nothing in the rules to prevent a person appearing at the hearing during the pendency of a petition even before admission or advertisement is ordered, and there is nothing to prevent such a person taking up the position that he wishes to oppose or support the petition. On an examination of the various rules, I see nothing objectionable to a third person appearing at the hearing of such a petition and opposing or supporting the petition if he is so advised. I, thereforee, proceed on the basis that even though the winding-up petition has not been admitted and has not been advertised, it is still open to third parties to come before the court as supporting or opposing parties. The question still remains : How are they to come before the court ?

4. I think the proper procedure is provided for by Rule 34 of the Companies (Court) Rules, 1959, on which the applicant himself relies. That rule provides that 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 so to do at least five days before the hearing. The effectiveness of this rule does nut depend on the existence of an advertisement. Such a notice can be given without an advertisement to the advocate of the petitioner. If such a notice is given, the procedure to be followed by the advocate is to file a list of the persons who have given notice in the court. This list is provided for by Rule 35 of the Companies (Court) Rules, 1959. The form is Form No. 10. This form states:

' The following are the names of those who have given notice of their intention to attend at the hearing of the petition herein on . ...'

5. The remaining portion of Rule 34 already referred to states that any person who has not given notice to the advocate will not be allowed to appear at the hearing of the petition except with the leave of the court. Thus, the procedure seems to be that if a person wishes to support a winding-up petition, he has to give notice of this fact under Rule 34 to the advocate for the petitioner, who in turn, has to file a list in Form No. 10, giving the names of persons and their addresses opposing or supporting the petition. When this has been done, that person is entitled to appear as of right at the hearing of the petition. Thus, each one of the 81 applicants should have given notice to the advocate for the original petitioner and become entitled to appear at the hearing of the winding-up petition as provided for by Rule 34. Now, it happens that the present application is under Rule 101 read with Rule 34. I, thereforee, treat this application as an intimation to the advocate of the original winding-up petition that this petitioner intends to support the winding-up petition. All that now remains is that he should file a list in Form No. 10 setting out the names of those persons. I direct the petitioner to file such a list after which all these applicants will become entitled to be heard at the hearing of the petition in accordance with Rule 34. Once this has been done, it remains to be seen how the procedure under Rule 101 can be followed.

6. When the winding-up petition is heard and the petitioner is held not to be entitled to maintain the petition, or withdraws the petition, or fails to appear, etc., as provided for in Rule 101, then any of the persons, who have given notice are entitled to inform the court that they wish to continue the winding-up petition ; after which, the court can, in its discretion, pass an order under Rule 102 directing the winding-up petition to be amended by substituting the names of such persons as petitioners, and also permitting the necessary allegations to be substituted in the winding-up petition. This appears to be the procedure laid down in the rules.

7. Now it remains to be seen, how the present applications can be dealt with. As I have already indicated, they can be read as an intimation under Section 34 to the advocate of the petitioner that the various persons named therein intend to support the petitioner. The advocate for the petitioner has, thereforee, to file a list in Form No. 10, giving necessary particulars of the various applicants. After this the applicants will be individually before the court in the main winding-up petition. If and when any of the contingencies mentioned in Rule 101 occur, they can ask the court to be substituted as petitioners. They need not move any further application for this purpose. In any case, these 81 applications are already before the court intimating that these various parties are ready to be substituted. It is, thereforee, not necessary to keep these applications pending and to formally adjourn them for hearing on every date. These applications are only effective if any one of the contingencies mentioned in Rule 101 occur. There is, thereforee, no necessity to have replies at this stage, and there is no necessity to keep these applications pending till such time as the original petition fails or is likely to fail in the manner mentioned in Rule 101. These applications are accordingly disposed of, but this order will remain on the file ; and as soon as the list in Form No. 10 has been filed by the petitioner's counsel, as separately directed, the applicants will be before the court (all 81 of them), to ask the court to be substituted as petitioners, as and when the contingencies provided for in Rule 101 occur. This will, in effect, allow the applicants to get the relief they seek now, as and when the time for the grant of the same arises. This application and the 80 other applications of a similar type are disposed of. No order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //