2015 (1) TMI 1344 - HC - Indian Laws

Affidavit verifying petition - Grant of leave - whether the Court can grant leave to the persons who have sworn the affidavit verifying the instant winding-up petition, as being duly authorised to do so by the petitioners? - Held that - This Court is of the view that in the facts and circumstances of the instant case, before such leave under Rule 21 of the Company (Court) Rules, 1959, is granted in favour of those persons, it is necessary for it to be satisfied that that all of them have been duly authorised by the petitioning-creditors to make and file the affidavit in support of the instant petition on their behalf. As such, the deponents are directed to satisfy this Court that they were duly authorised by the petitioning creditors to make and file the affidavit verifying the instant winding-up petition, by producing valid resolutions adopted by the Board of directors of the petitioning-creditors supported by powers of attorney given in their favour by the petitioning-creditors. Let such documents be produced before this Court on 29th January, 2015.

Summary

Issues:
Verification of winding-up petition under Rule 21 of the Company (Court) Rules, 1959.

Analysis:
The judgment dealt with the objection raised by the company's advocate regarding the verification of the winding-up petition under Rule 21 of the Company (Court) Rules, 1959. The advocate referred to various judgments, including those from the High Courts and the Supreme Court, emphasizing the importance of proper verification. It was argued that if the verification is defective, the court cannot order winding up, as seen in previous cases like Gaya Textiles Private Ltd. and Star Textile Engineering Works Ltd. The advocate also highlighted the mandatory nature of Rule 21, citing judgments from the Punjab and Haryana High Court and the Allahabad High Court. Additionally, a Supreme Court judgment was referenced regarding the limitations of a power of attorney holder in deposing for the principal. The advocate pointed out discrepancies in the verification of the instant petition, where the power of attorney holders seemed to depose for acts done by the principals.

On the other hand, the petitioning creditors' advocate argued that the verification of the winding-up petition was in accordance with Form no.3 provided under Rule 21. It was contended that the petitioners only needed to show that the person affirming the affidavit was duly authorized. The court examined Rule 21, which mandates the verification of a petition by an affidavit in a specific form. The provision allows the Judge or Registrar to grant leave to another authorized person to make and file the affidavit. The court noted that the affidavit in the present case was in compliance with Form no.3.

The court distinguished the judgments cited by the company's advocate, stating that they were not rendered at the preliminary stage before considering a winding-up petition on its merit. Regarding the Supreme Court judgment, it clarified that the context was different, focusing on the interpretation of the word "acts" in relation to a power of attorney holder's authority. The court emphasized that at this preliminary stage, the focus was on whether the persons verifying the petition were duly authorized as per Rule 21.

Consequently, the court directed the deponents to demonstrate that they were duly authorized by the petitioning creditors to verify the winding-up petition by providing valid resolutions from the Board of directors supported by powers of attorney. The court required these documents to be produced for verification on a specified date. It emphasized the necessity for proper authorization before granting leave under Rule 21.