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Demach Engineers Private Ltd. Vs. Mrs. Winny Xavier - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKerala High Court
Decided On
Case NumberApplication No. 85 of 1983 in Company Petition No. 1 of 1983
Judge
Reported in[1987]62CompCas499(Ker)
ActsCompanies Act, 1956 - Sections 439; Companies (Court) Rules, 1959 - Rule 96
AppellantDemach Engineers Private Ltd.
RespondentMrs. Winny Xavier
Appellant Advocate M.M. Thomas, Adv.
Respondent Advocate P.N.K. Achan, Adv.
DispositionApplication dismissed
Cases ReferredCotton Corporation of India Ltd. v. United Industrial Bank Ltd.
Excerpt:
.....(court) rules, 1959 - in response to petition notice affidavit -in-opposition was given to applicant company - company represented to court time and again for settlement of matter and prayed for time which was granted - subsequently it was found that no settlement could be reached - case adjourned for at least three times - no petition to revoke made until then - considerable laches and want of bona fides in application when it prayed at belated stage that admission of petition should be revoked - applicant not entitled at belated stage to attempt to revive plea which it did not make once in effect and substance waived it - application bereft of merit liable to be dismissed. - - 1 of 1983 and for stay of further proceedings like advertisement, etc. raman nair held :it is..........recorded read as follows :' it is reported that there is a talk of settlement and advocates want time. adjourned to june 30, 1983.'4. on june 30, 1983, the proceedings recorded are to the following effect:' counsel for the respondent wants two weeks' further time for settlement. adjourned to july 19, 1983.'5. on july 19, 1983, the proceedings are recorded as follows :' respondent's advocate requests as a last chance two weeks' time for settlement. adjourned to august 18, 1983.'6. on august 18, 1983, the matter was adjourned for evidence and arguments to august 29, 1983. on the next adjourned date, september 26, 1983, the matter was adjourned to october 6, 1983. thereafter, the matter stood posted from time to time for evidence, for filing documents, etc.7. application no. 85 of 1983 is.....
Judgment:

K.S. Paripoornan, J.

1. The respondent in the company petition is the applicant herein. This application is filed praying for the grant of the following reliefs :

(a) to stay further proceedings in Company Petition No. 1 of 1983.

(b) refusing advertisement of Company Petition No. 1 of 1983 ; and

(c) to revoke the order of admission of Company Petition No. 1 of 1983 as not maintainable in law.

2. The application is supported by an affidavit dated February 28, 1983. This is opposed by the petitioner in the company petition.

3. Company Petition No. I of 1983 was filed by the respondent in this application. The respondent was an employee of the company. Alleging that the company neglected and refused to pay a sum of Rs. 6,109.50 as salary and other dues in spite of repeated demands and that the applicant company is commercially insolvent, Company Petition No. 1 of 1983 was filed praying that the company be wound up under the provisions of the Companies Act. This petition was filed on December 21, 1982. Notice was ordered to the respondent on January 27, 1983. The company entered appearance and filed an affidavit in opposition dated February 28, 1983. The matter was adjourned from time to time. An affidavit in reply was filed by the petitioner in the company petition. When the matter came up for arguments on June 20, 1983, it was adjourned to June 30, 1983. The proceedings recorded read as follows :

' It is reported that there is a talk of settlement and advocates want time. Adjourned to June 30, 1983.'

4. On June 30, 1983, the proceedings recorded are to the following effect:

' Counsel for the respondent wants two weeks' further time for settlement. Adjourned to July 19, 1983.'

5. On July 19, 1983, the proceedings are recorded as follows :

' Respondent's advocate requests as a last chance two weeks' time for settlement. Adjourned to August 18, 1983.'

6. On August 18, 1983, the matter was adjourned for evidence and arguments to August 29, 1983. On the next adjourned date, September 26, 1983, the matter was adjourned to October 6, 1983. Thereafter, the matter stood posted from time to time for evidence, for filing documents, etc.

7. Application No. 85 of 1983 is dated February 28, 1983, long before the matter came up for consideration on June 20, 1983. After filing the above application praying to revoke the order of admission of Company Petition No. I of 1983, the matter stood adjourned from time to time on three occasions, June 20, 1983, June 30, 1983, and July 19, 1983. The matter was adjourned specifically for settlement. Even thereafter from March 18, 1983, up to March 13, 1984, the above application (No. 85 of 1983) was not pressed, but the proceedings were adjourned for evidence and for production of documents.

8. Counsel for the applicant company, Mr. M.M. Thomas, argued that this court has jurisdiction to revoke the order of admission of Company Petition No. 1 of 1983 as not maintainable. It is argued that the amount claimed by the petitioner in the company petition is disputed; that the petitioner should establish her claim in court and the petition filed under Section 439 of the Companies Act is intended to exert pressure on the company by a creditor to realise a debt without recourse to a civil court, and is an abuse of the process of the court and so the petition should be dismissed. Counsel for the respondent in the application--the petitioner in the company petition--stressed the fact that she is entitled to the salary and other dues stated in the petition and that the company did not pay the salary because the company is incapable of paying the amount, that the application filed praying amongst others to revoke the admission of Company Petition No. 1 of 1983 is not maintainable and that at any rate, the applicant having represented to the court and having obtained adjournments from time to time on the representation, stating that the matter was to be settled, cannot turn round at this belated stage, with a prayer to revoke the order of admission of Company Petition No. 1 of 1983 and for stay of further proceedings like advertisement, etc.

9. In George v. Athimattam Rubber Co. Ltd. [1964] KLT 1043 ; [1965] 35 Comp Cas 17 (Ker), Justice P.T. Raman Nair held :

'.....It is well settled that, even after the court has admitted a petition, it can, on being moved for the purpose by the company or some other interested person, stay proceedings and revoke the admission. Rule 96 of the Companies (Court) Rules, which deals with the admission of winding up petition and directions as to advertisement, recognises this, for, it says that the judge may, if he thinks Jit, direct notice to be given to the company before giving directions as to the advertisement of the petition--the hearing to be given to the company is not for the purpose of deciding the manner of the advertisement, but for deciding whether the advertisement should be made at all and the petition proceeded with.'

10. The above decision was cited with approval by the Supreme Court in a very recent decision, Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. [1983] 4 SCC 625, 644 ; [1984] 55 Comp Cas 423. In view of the above, the objections raised by the respondent in the application that the petition is not maintainable is devoid of force. I hold that the petition filed to revoke the order of admission of the company petition is maintainable. Even so, the further question is, whether, on the facts of this case, the applicant company is entitled to urge the said plea and at this stage. As stated earlier, the applicant company filed its affidavit in opposition as early as February 28, 1983. The matter was posted for arguments to June 20, 1983. It was adjourned from time to time. On three specific dates, June 20, 1983, June 30, 1983, and July 19, 1983, the hearing of the matter was adjourned on the specific representation that the matter was to be settled. More particularly, counsel for the applicant company himself got time on that basis when the matter came up for hearing on June 30, 1983, and July 19, 1983. Thereafter, from August 18, 1983, on many dates when the matter came up, it was posted for evidence and on none of these occasions, the applicant pressed for the grant of the relief prayed for in Application No. 85 of 1983. The question is whether by conduct, the applicant is precluded from being permitted to urge the plea prayed for in Application No. 85 of 1983 at this belated stage. Rule 96 of the Companies (Court) Rules is to the following effect:

' Admission of petition and directions as to advertisement.--Upon the filing of the petition, it shall be posted before the Judge in Chambers for admission of the petition and fixing a date for the hearing thereof and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. The judge may, if he thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition.'

11. The question as to whether the ' admission ', once made, should be revoked is a matter of ' discretion ' vested in the court. When the petition was admitted and notice was given to the applicant company, theapplicant company did file an affidavit-in-opposition. It opposed the company petition. Application No. 85 of 1983 was filed to revoke the admission of the petition. It was entitled to do so. It invoked the jurisdiction of this court in the 'matter. But the company did not pursue the matter. On the other hand, the company represented to this court on more than one occasion that it wanted to settle the matter and prayed for grant of time on that basis. Time was granted by this court for the purpose of settling the case. The applicant also got the 'advantage' of putting off the matter. But eventually it turned out that the matter could not be or was not settled. So, the case was posted for evidence. Having represented to the court that the matter was to be settled and having obtained adjournments on that basis at least on three occasions and having not pressed the petition filed to revoke the admission of the company petition at any of the stages till now, I am of the view that there is considerable laches and want of bona fides in the applicant when it prays at this belated stage that the admission of the company petition should be revoked The applicant is disentitled by its own conduct from urging the plea that the relief prayed for in Application No. 85 of 1983 should be afforded. The applicant was not 'earnest' or 'vigilant' in pursuing this application ; in effect, it gave up or waived the plea. Having done so, it cannot turn round at this belated stage and make an attempt to revive the plea, which it did make once, and in effect and substance, ' abandoned' or ' waived ' it. I refuse to entertain the plea and refuse to consider Application No. 85 of 1983 on the merits in view of the conduct of the applicant itself. On this short ground, I dismiss this application.


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