1972 (3) TMI 59 - HC - Companies Law

Summary

Issues:
- Jurisdiction of the court to entertain the petition for compulsory winding up.
- Whether the company was unable to pay its debts.
- Maintainability of the appeal under clause 10 of the Letters Patent.

Jurisdiction of the Court:
The appeal was filed against the judgment of a learned single judge regarding the compulsory winding up of Delhi Kiryana Private Ltd. The Additional District Judge had initially ruled that the court had jurisdiction to entertain the petition. The company contested the jurisdiction and also the claim of being unable to pay debts. The learned Additional District Judge framed two issues on merits after determining the court's jurisdiction.

Inability to Pay Debts:
After considering the evidence, the Additional District Judge found the company unable to pay its debts, leading to the order for compulsory winding up. An appeal against this decision was dismissed by M. R. A. Ansari J., which prompted the company and its directors to approach the court under clause 10 of the Letters Patent. The court, after hearing the parties, dismissed the appeal citing the lack of a second appeal under clause 10 of the Letters Patent.

Maintainability of the Appeal:
The court analyzed various legal precedents cited by the appellant's counsel, including cases from the Supreme Court and the Judicial Committee of the Privy Council. The court emphasized that the appeal did not meet the criteria for a second appeal under clause 10 of the Letters Patent. The court referred to provisions in the Companies Act, 1956, and previous legal interpretations to conclude that only one appeal was permissible, and no further appeal lay to the Division Bench of the court.

Conclusion:
The court accepted the preliminary objection and ruled that no second appeal lay under section 483 of the Companies Act, 1956, or under clause 10 of the Letters Patent. The appeal was dismissed without any order as to costs, affirming the decision of the lower courts regarding the compulsory winding up of the company. The court's decision was based on the specific legal provisions and precedents governing appeals in matters of winding up companies, emphasizing the limitations on appellate jurisdiction in such cases.