1983 (11) TMI 258 - HC - Companies Law

Summary

Issues: Recovery of dues under hire-purchase agreement, liability of guarantor, liability of ex-directors under Companies Act, abatement of petition due to failure to bring legal representatives on record.

The judgment pertains to a petition filed by the official liquidator of a company in liquidation seeking recovery of Rs. 6,000 under a hire-purchase agreement for a vehicle. The respondents, including the guarantor, failed to pay the amount due. Additionally, ex-directors of the company were sought to be made personally liable under sections 542 and 543 of the Companies Act, but the proceedings against them were held over by the court. The legal issue arose when it was discovered that respondents No. 1 and 2 had passed away, and no steps were taken to bring their legal representatives on record within the prescribed period, leading to the question of abatement of the petition.

The court analyzed the relevant provisions of Order 22, rule 4 of the Code of Civil Procedure, which mandates bringing legal representatives on record within 90 days of a party's death when the right to sue survives. The official liquidator argued that these provisions did not apply to the present proceedings under the Companies Act. However, the court held that as per section 141 of the CPC, the procedure applicable to suits must be followed in civil proceedings unless expressly excluded. Since no other provision under the Companies Act or rules was cited to suggest a different procedure, the court concluded that Order 22, rule 4 applied to the case, and the failure to bring legal representatives on record led to the abatement of the petition.

The official liquidator relied on a Full Bench decision of the court in a different case but the court found it inapplicable as it did not address the specific issue of bringing legal representatives on record. Another Full Bench decision from a different High Court was also deemed irrelevant as it concerned the applicability of CPC provisions to writ jurisdiction, which was distinct from the present case. Therefore, based on the failure to comply with the requirements of bringing legal representatives on record within the prescribed period, the court held that the petition had abated, leading to the dismissal of the case.