2000 (12) TMI 868 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the winding-up petition based on the affidavit's compliance with the Companies Act and related rules.
2. Validity of the affidavit's form and the deponent's authority.
3. Commercial insolvency of the appellant-company.

Detailed Analysis:

1. Maintainability of the Winding-Up Petition:
The appellant-company contended that the winding-up petition was not maintainable due to non-compliance with the affidavit requirements under the Companies Act and related rules. The affidavit, according to the appellant, did not conform to the prescribed form and lacked essential details such as the deponent's age, occupation, and place of abode. Additionally, the deponent, being a constituted attorney, lacked personal knowledge and did not disclose the source of his information.

The court held that the affidavit verifying the petition was in Form No. 3 and in accordance with rule 21 of the Companies (Court) Rules, 1959. It was observed that the affidavit was properly constituted, and the objections raised by the appellant were deemed frivolous and aimed at delaying the proceedings.

2. Validity of the Affidavit's Form and the Deponent's Authority:
The appellant argued that the affidavit was defective because it was not sworn in the manner prescribed by the Code or the rules framed by the court. They also contended that the deponent, Vivek Mazumdar, was neither a director nor a principal officer and had not obtained the court's leave to file the affidavit, as required under rule 18 of the Companies (Court) Rules, 1959.

The court clarified that rule 21, which deals with affidavits in support of winding-up petitions, was applicable in this case, not rule 18. Rule 21 allows a director, secretary, or other principal officer of the company to verify the petition. The court found that Vivek Mazumdar, as the assistant manager and constituted attorney, was duly authorized by the board of directors to file the affidavit. The affidavit complied with the requirements of rule 21 and Form No. 3, thus making the petition properly constituted.

3. Commercial Insolvency of the Appellant-Company:
The respondent-company filed the winding-up petition under sections 433, 434, and 439 of the Companies Act, 1956, claiming that the appellant-company was unable to meet its financial obligations and was in a commercially insolvent condition. The appellant denied the insolvency and argued that the dispute was of a civil nature arising from an alleged non-performance of a contract.

The court did not delve deeply into the commercial insolvency aspect in this judgment but focused on the procedural objections raised by the appellant. The court directed that the winding-up petition be formally admitted and proceeded with expeditiously, emphasizing the need to address the substantive issues without further delay.

Conclusion:
The court dismissed the appellant's objections regarding the maintainability of the winding-up petition and the validity of the affidavit. It held that the affidavit was in compliance with rule 21 and Form No. 3 of the Companies (Court) Rules, 1959, and that the deponent was duly authorized. The court directed the winding-up petition to be admitted and disposed of expeditiously, awarding costs of Rs. 5,000 to the respondent-company.