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TMI Blog1997 (8) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company. The company petition was filed on 29-3- 1990. Without any stiff opposition from the company a provisional liquidator was appointed on 4-4-1990. Coming to know of these develop-ments the Coffee Board got themselves impleaded in the company petitions so as to enable them to remove coffee kept in the godown of the company. The removal of the coffee was objected by the workers of the company. Therefore, an Advocate-Commissioner was appointed for supervising the curing operation. When the Advocate-Commissioner inspected the godown it was revealed that 17 tonnes of coffee kept in the godown of the company worth Rs. 43,52,977.64 have been stolen. There-after the Coffee Board filed a claim statement showing the adjustment of the amounts due to the company from the Coffee Board and the balance amount due to the Coffee Board which, according to the applicant, comes to Rs. 61,84,049.24. The real amount could be ascertained only after final settlement of the accounts. 2. There were several revival schemes put forward by several persons. This Court explored the viability of those schemes. But finally this Court could not approve any scheme for various reasons. In the meanwhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or to allow it to be dismissed, or the hearing to be adjourned, or fails to appear in support of his petition when it is called on in Court on the day originally fixed for the hearing thereof, or any day to which the hearing has been adjourned, or (4)if appearing, does not apply for an order in terms of the prayer of his petition, or where in the opinion of the Court there is other sufficient cause for an order being made under this rule, the Court may, upon such terms as it may think just, substitute as petitioner any creditor or contributory who, in the opinion of the Court, would have a right to present a petition, and who is desirous of prosecuting the petition." Shri E.R. Venkiteswaran, the learned counsel for the company opposed the substitution on the ground that the Coffee Board is neither a creditor nor a contributor so as to invoke rule 101. According to him, it is necessary to look into the provisions contained in the Companies Act, 1956 ('the Act') which deal with the winding up petitions. Section 433 of the Act deals with the circumstances under which a company may be wound up by the Court. Section 433 read as follows: " Circumstances in which company may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( e ). Unless the Coffee Board satisfies the requirements of sections 433 and 434 it cannot step into the shoes of the original petitioner. 7. In order to impress upon the above argument the learned counsel relied on a number of decisions of various High Courts and the Supreme Court. This Court in the ruling in Krishna Iyer Sons v. New Era M. Co. 1965 KLT 198 has considered the grounds on which the company is to be wound up. Justice Raman Nayar (as he then was) has succinctly dealt with the above aspects in the following manner: "19.1 shall now consider the two grounds on which the petitioners would have the company wound up and the allegations made in support of these grounds. The first ground, that the company is unable to pay its debts, both in the sense that it is actually unable to pay debts presently due and demanded, and in the sense that it has reached a stage where, in the language of Sir William James, V.C. in In re European Life Assurance Society [1869] L.R. 9Eq. 122 at 128, it is plainly commercially insolvent - that is to say, that its assets are such, and its existing liabilities are such, as to make it reasonably certain - as to make the court feel sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing up of the company. 8. In this connection it is pertinent to point out the various statements made in the counter-affidavit filed on behalf of the company to the application filed by the Coffee Board, which read as follows: "6. However, this respondent submits that the amount shown in item No. 21 is substantially true. However, this respondent reserves its right to dispute the same as and when books of accounts are made available to this respondent-company. This respondent understands that the books of accounts have been taken by the Coffee Board and therefore this amount could not be verified. However, the alleged interest claimed on various accounts are not payable. This respondent-company have incorporated interest when enforcement of Bank Guarantee executed by the Indian Bank and this amount is not payable. The said amount has been taken on account of the amount alleged to be due to the Coffee Board. This respondent denies the amount shown as item No. 24. The difference in interest charged on Rs. 16,59,000 from 20-5-1990 to 31-8-1991 has to be deducted. There is a double claim of interest by the Coffee Board on Rs. 22,00,000 from 1-2-1990 to 22-2-1990. This has been sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oints comes to 67957 and anticipated payment @ 3.60/point Rs. 2,44,645.00 Rs. 2,90,475.00 Interest on the above amount due @ 2 1.5% from the date of submission of bills to 31-8-1991 pending payments - vide statement Difference in interest - charged on Rs. 16,59,000 from 20-5-1990 to 31-8-1991 to be deducted by giving credit @ 21.5% (Item No. 24 refers in Coffee Board claim) Rs. 2,66,061.36 Rs. 4,59,184.37 Double claim of interest by Coffee Board on Rs. 22,00,000 from l-2-1990 to 22-2-1990 (21 days) @ 21.5% (Item No. 123 refers in Coffee Board claim) Rs. 27,213.70 Loss incurred due to damage of empty gunnies in Godown with Coffee stored due to improper storage during Monsoon months. Reason being the Coffee has not been lifted by Coffee Board in spite of Court direction for removal of coffee (entire empty gunnies stocks was sold by Liquidator only for Rs. 80,000) Rs. 7,25,000.00 Total Rs.23,44,868.48 Less : Alleged interest on various cash balances delayed refund, retention of pool balances, etc., Item Nos. 22 to 26 of the Coffee Board claim Rs. 13, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g their claims against the company. The transposition contemplated under rule 101 cannot postu- late a situation where a person who has issued a notice and waiting for filing company petition is to be transposed as an original petitioner. Such a petitioner need not come as a petitioner by way of transposition. He has got every right to file a petition. The transposition comes into play only in a situation where the original applicant disappears from the scene for some reason or other and there are other parties to the petition who have got similar interest in the prosecution of the petition. Therefore, it is only to be noticed whether the Coffee Board is really a creditor of the company or not. Only in that sentence the word 'creditor' in rule 101 is to be interpreted. Otherwise as indicated earlier there is no scope for a creditor who satisfies the ingredients of sections 433 and 434 to seek permission for transposition. 10. Considering this matter in the above perspective I am of the view that the Coffee Board satisfies the ingredients of rule 101 for transposition in the original petition in order to prosecute the petition. 11. There is yet another circumstance which thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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