2011 (1) TMI 1199 - HC - Companies Law

Amalgamation condonation of delay - enlargement of the time to file the certified copy of the sanctioned scheme with the Registrar of Companies beyond the permitted time.

Issues Involved:
1. Enlargement of time to file the certified copy of the sanctioned scheme with the Registrar of Companies.
2. Presumption of abandonment due to delay in filing.
3. Applicability of Rule 7 and Rule 81 of the Companies (Court) Rules, 1959.
4. Jurisdiction and discretion of the court to extend time limits.
5. Impact of procedural lapses by legal representatives on litigants.
6. Precedents and legal principles supporting the extension of procedural timelines.

Issue-wise Detailed Analysis:

1. Enlargement of Time to File Certified Copy:
The appeal was directed against an order refusing to enlarge the time for filing the certified copy of the sanctioned scheme with the Registrar of Companies beyond the permitted time. The court initially declined to condone the delay, prompting a formal application on March 22, 2010.

2. Presumption of Abandonment:
The company court dismissed the application, stating, "Upon the applicants not filing the certified copy of the order sanctioning the scheme within a month of the date of receipt thereof, a presumption arose that these applicants had abandoned the same." The court held that the applicants failed to rebut this presumption in their application and supplementary affidavit.

3. Applicability of Rule 7 and Rule 81:
The appellant's counsel cited Rule 81, which mandates filing the certified copy within 14 days or within such time as fixed by the court. Rule 7 empowers the court to enlarge or abridge the time fixed by an order of the court. The court has the discretion to extend the time even after the expiration of the appointed period.

4. Jurisdiction and Discretion of the Court:
The appellant argued that the court has the power to extend the time stipulated by the order dated July 21, 2009, under Rule 7, and there is no legal presumption of abandonment after 30 days. The learned judge did not specify under what law such a presumption arises, and sections 115 to 117 of the Indian Evidence Act, 1872, do not support such a presumption.

5. Impact of Procedural Lapses by Legal Representatives:
The appellant contended that the delay was due to the inadvertence of the clerk of the advocate-on-record, who obtained photostat signed copies instead of certified copies. The court should consider that a party should not suffer due to the lapses of their legal representatives. The appellant relied on precedents like Rafiq v. Munshilal AIR 1981 SC 1400 and National Bank Ltd. v. Dulai Kanti Chowdhury.

6. Precedents and Legal Principles:
The appellant cited several decisions supporting the extension of procedural timelines:
- Zolba v. Keshao [2008] 11 SCC 769: The Supreme Court held that procedural rules are meant to advance justice, not defeat it.
- Sambhaji v. Gangabai [2008] 17 SCC 117: The court emphasized that procedural laws should aid justice and not obstruct it.
- Coal Marketing Co. of India (P.) Ltd., In re [1967] 37 Comp. Cas. 720 (Cal.): Supported the appellant's case under Rule 7.
- Mahanth Ram Das v. Ganga Das AIR 1961 SC 882: Stated that procedural orders are in terrorem and do not estop the court from considering subsequent events.
- Chinnamarkathian v. Ayyavoo AIR 1982 SC 137: Highlighted that conditional orders create a guarantee for obedience but do not remove the court's jurisdiction to act justly.

Judgment:
After considering the arguments and precedents, the court concluded that the litigant should not suffer due to the advocate's procedural lapses. The court emphasized that procedural laws are meant to serve justice and should not be rigidly applied to deny substantive rights. Consequently, the court allowed the appeal, granting an extension for filing the certified copy of the order sanctioning the scheme with the Registrar of Companies within three weeks. The order of the single judge was set aside, and the appeal was allowed upon payment of costs.

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