2001 (12) TMI 812 - HC - Companies Law

Summary

Issues:
Winding up petition under sections 433, 434, and 439 of the Companies Act, 1956 filed by Dhandhania Brothers (P.) Ltd. against Khaitan Overseas and Finance Ltd.

Detailed Analysis:

1. Affidavit Compliance: The first preliminary objection raised was regarding the proper form of the affidavit accompanying the company petition. The objection claimed that the affidavit was not properly affirmed and signed. However, the court found that the affidavit met the legal requirements as per Rule 21 and Order XIX of the Civil Procedure Code. The objections were deemed devoid of substance, supported by precedents like Gaya Textile (P.) Ltd. and Mool Chand Wahi v. National Paints (P.) Ltd.

2. Competence of Affiant: The second objection raised was about the competence of Sri S.K. Dhandhania, the Chairman and director of the applicant-company, to affirm the affidavit on behalf of the company. The objection cited judgments from the Bombay High Court and the Patna High Court. However, the court ruled that Sri S.K. Dhandhania was duly authorized by a resolution of the board of directors to file the winding-up petition, dismissing the objection based on legal principles of agency and company law.

3. Definition of 'Suit': The court delved into the definition of a 'suit' to establish the scope of legal proceedings initiated for any actionable claim. It emphasized that a winding-up petition falls within the ambit of a 'suit' as it involves legal proceedings for recovery of dues when a company is unable to pay its debts. This analysis clarified the authority of the board of directors to file a winding-up petition for recovery of loans.

4. Admission of Petitions: The counter-affidavit filed by the company did not deny the liability, and the objection regarding the debt being time-barred was not pursued. Consequently, the court admitted the company petitions and directed the applicant-company to proceed with the necessary steps for advertisement and hearing in accordance with the rules.

In conclusion, the judgment addressed the procedural and substantive objections raised by the respondent, affirming the validity of the winding-up petition filed by Dhandhania Brothers (P.) Ltd. against Khaitan Overseas and Finance Ltd.