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TMI Blog1967 (10) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... s, therefore, directed to be returned by U. N. Sinha J., the learned judge who was then in charge of the company cases to be refiled after removing the defects. The petition was lefiled on August 2, 1966. An affidavit of Kailash Chand Jain, however, was filed on September 12, 1966, wherein the contents of the petition, as previously filed, were verbatim repeated. This petition supported by the affidavit of Kailash Chand Jain was directed to be treated as a part of the original petition by order No. 7 dated November 4, 1966. According to the petitioner's case as made out in the petition for winding up, the company was incorporated with the object of dealing in, and manufacturing, all kinds of finished papers besides other objects. In paragraph 6 of the petition it was stated that the company was indebted to the petitioner to the tune of Rs. 20,000 besides interest amounting to Rs. 3,000 at the rate of 6 per cent, per annum. The amount was deposited by the petitioner with, the company as security for being appointed as the distributor of the company, meaning thereby as distributor for distribution and sale of the company's products. It was further stated that " the company stoppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company was indebted to the tune of Rs. 20,500 was refuted. Further facts were stated to say that the firm, by its letter dated December 11, 1963, purported to terminate the agreement and demanded the refund of Rs. 20,000 with interest but the termination was not in accordance with the terms of the agreement. Even after the demand dated April 1, 1964, referred to in paragraph 7 of the petition, the firm continued the distributorship agreement and placed fresh orders for supply of paper. At that point of time it was agreed between the firm and the company that the security deposit of Rs. 20,000 would be "repaid by the company to the said firm by adjusting 25 per cent, of the price of paper payable by the latter to the former in respect of paper supplied. It was in pursuance of this fresh agreement and understanding between the parties that the sum of Rs. 2,500 was adjusted leaving the balance of Rs. 17,500 as security deposit with the company. Thereafter, it was asserted in the counter-affidavit that the firm was guilty of various laches, breaches and violation of the terms of the agreement and was liable to pay Rs. 36,041 which was due from the firm to the company and after adjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erly presented by the proper person. The Registrar of Companies, Bihar, filed an affidavit on January 4, 1967, supporting the petition for winding up on various other grounds stated in that petition. On April 24, 1967, a registered partnership firm known as Sobha Ram Jokhi Ram of Sahibganj in the district of Santhal Parganas filed a petition not only in support of the petitioner's application for winding up but also giving details of the dues which this firm was claiming against the company. The company has filed counter-affidavits to the affidavit and petition filed by the Registrar of Companies and the firm, Sobha Ram Jokhi Ram, on August 23, 1967, and September 13, 1967, respectively. The said firm has filed affidavit-in-reply on September 29, 1967. Learned counsel for the company, which has vehemently opposed this application, submitted the following points ( i )That the petitioner in this case is Kailash Chand Jain who is not a creditor of the company and has no locus standi to file this petition. ( ii )That the petition does not disclose any ground for winding up and is not in form as prescribed by the Rules. ( iii )That, on the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the firm is the petitioner nor are all the partners of the firm petitioners for the winding up of the company. This is further clear, as I have indicated above, from the affidavit sworn by the petitioner in support of the petition, wherein he says "I am the petitioner (creditor) in this case". In various paragraphs of the affidavits filed by the petitioner subsequently, he has clearly drawn a distinction between himself and his firm. He has treated himself as the petitioner in this winding up proceeding. He purports, as stated by him in his affidavit filed on October 19, 1967, in reply, to have a right to file this petition for winding up. He has stated in this affidavit that the petition for winding up has been filed by the firm, Kailash Chand Jain and Co., through its partner, Kailash Chand Jain. But in the same affidavit he further states that Kailash Chand Jain is the managing partner of the firm and he alone is entitled to Lansact the business and to do everything on behalf of the firm "and as such he alone has filed the petition for winding up, legally representing all the partners". In my opinion, the error committed by the petitioner, although technical, is fatal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mself, under a wrong advice, being a managing partner of the partnership firm, entitled to present this petition alone. This is a misconception in law and the petition has got to fail on this ground alone. Apart from the technicality of the form, under rule 95 the petition for winding up by a creditor has to be in form No. 46 which provides under clause 6 that while stating that the " company is indebted to the petitioner in the sum of Rs.........., the petitioner has to state the consideration for the debt, with particulars, showing that the debt claimed is due ". In substance also, in a winding up petition facts must be clearly stated at the outset. As I have pointed out above, facts were too vaguely stated and particulars were not given as to when the security money was deposited, when there was a partial adjustment, since when the money was due and when the demand was made for the first time before the demand dated April 1, 1964. Not only chat, copy of no letter which passed between the firm and the company was annexed as annexure to the winding up petition. Even the statutory notice which-had to be given under section 434 of the Act was not appended as an annexure. The court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly accept without prejudice and refund back your security if so desired". It would appear from paragraph 5( c ) of the affidavit-in-opposition filed by the company on August 17, 1967, that the firm at one time, by letter dated December 11, 1963, purported to terminate the distributorship agreement but the termination was not in accordance with law. This letter is not on the record. Thereafter, there is reference to letter dated April 1, 1964, by the petitioner in paragraph 7 of his petition, as already stated, stating that it was a letter of demand for refund of the security money. This letter also has not been filed by any party. But it appears from letter dated December 21, 1964, a copy of which is annexure II to the affidavit-in-opposition of the company, that the stand of the company in this regard is correct, that even after tne letter dated April 1, 1964, was given by the firm, transaction and business dealings went on between the parties. By this letter, the firm made certain enquiries from the company about certain qualities of papers and then stated further that the other manufacturers were giving a commission of 15 per cent. I, therefore, get that till December 1, 1964 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in-reply of the petitioner although, as I have stated above, this copy was not filed earlier with the petition. I would not have attached any importance to the contents of the letter because it was filed late but for the fact that in the petition, with reference to the contents of this letter, it was stated that the company intimated that the money would be refunded very soon a fact which has not been denied by the company in its affidavit-in-opposition. I may, therefore, refer to the contents of the letter, a copy of which is annexure D. The company wrote to the lawyer who had sent notice dated January 4, 1966, on behalf of the firm : "We are making arrangements for the return of security amount to all our distributors at an early date. Our managing agents are also very keen on the returning of security deposit. We hope you will certainly wait at least for some more time without taking the course of legal proceedings". It is to be noticed, therefore, that even in this reply dated January 7, 1966, no claim was made on behalf of the company as it has been done in the affidavit-in-opposition. In the affidvit-in-opposition it is stated further that a fresh demand letter dated Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r admission of liability by the company to pay the debt to the partnership firm, and that being so, the dispute was there although the details of the dispute were not there. I am unable to follow this argument. In my opinion, the liability of the company to refund the balance of the security money was not disputed on any ground whatsoever at any stage of the correspondence, as is evident from the letters placed before me. It was not a case of lack of details in support of the dispute. But I am inclined to think that no dispute was ever raised by the company prior to the one which was raised in the affidavit-in-opposition. I may, however, conclude this point by stating that if the petitioner would not have failed on the first ground, I am not quite sure as to whether he would have failed on the second ground of lack of a statement of relevant facts and sufficient materials in his application for winding up, although, as I have indicated above, in all probability on this ground alone he should not have failed. Coming to the last point, 1 find that the Registrar of Companies in his affidavit has taken various pleas to support the case for winding up on one ground or the other. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It will be tantamount to starting a fresh proceeding for winding up on the facts alleged by that firm. It would be more advisable and convenient if that firm, if so advised, chooses to exercise its right, if any, by presenting another application for winding up. Secondly, as was pointed out by the learned counsel for the company, it is doubtful as to whether the court in the present proceeding can take recourse to the procedure suggested in rule 101 of the Rules in view of the powers of the court enumerated in section 443 of the Act at the hearing of a winding up proceeding and the orders to be made thereon. In the result, the application for winding up filed by the petitioner fails and is dismissed but I shall make no order as to costs. It is obvious that the petition filed by the company under section 34 of the Arbitration Act has become infructuous and in the view expressed above it could not be allowed either. It is accordingly rejected. On the failure of the petition for winding up, the application filed by the petitioner for transfer of title suit No. 64 of 1967 pending in the court of the Subordinate Judge, Samastipur, cannot be ordered to be transferred to this cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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