1990 (10) TMI 289 - HC - Companies Law

Summary

Issues:
- Amendment of winding-up petition for clarification of petitioner's constitution.
- Objection to the amendment based on defective verification and non-compliance with section 69 of the Indian Partnership Act.

Analysis:
The High Court of Delhi addressed a winding-up petition filed by a petitioner seeking to wind up the respondent company due to unpaid debts. The petitioner's constitution was not clearly stated in the petition, leading to objections from the respondent regarding the affidavit's verification and compliance with the Indian Partnership Act. The petitioner sought to amend the petition to clarify that it is a registered firm under the Indian Partnership Act, with one of the partners named in the firm. The court noted that under the Companies (Court) Rules and Civil Procedure Code, it has the jurisdiction to allow amendments as long as they are not mala fide or introduce a new cause of action. The court cited previous judgments to support the allowance of amendments in winding-up petitions if warranted by the circumstances.

The respondent objected to the amendment, citing defective verification in the affidavit and non-compliance with section 69 of the Indian Partnership Act. The court analyzed the verification issue, emphasizing that the absence of an ideal verification should not lead to dismissal if there is no prejudice. Regarding section 69, the court clarified that its provisions do not apply to winding-up proceedings under the Companies Act, as these proceedings are not to enforce contract rights but to determine commercial solvency. The court referred to previous judgments to support its interpretation of section 69 and emphasized that the amendment sought was clarificatory and did not introduce new claims or causes of action.

Ultimately, the court allowed the petitioner to amend the petition for clarification of its constitution, dismissing the objections raised by the respondent as hypertechnical and untenable. The court emphasized the need for a liberal approach in considering amendments to promote substantial justice and ordered the petitioner to pay costs for the amendment. The case was scheduled for further proceedings on a specified date.