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TMI Blog1999 (1) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... 434 of the Act. In this company petition the Coffee Board has filed an application No. 96 of 1996 praying to substitute it as petitioner thereon. The above company petition was originally filed on 29-3-1990 and the company court appointed a provisional liquidator on 4-4-1990. When the Coffee Board came to know of the initiation of the liquidation proceedings it got impleaded in the company petition and obtained permission from the court to remove coffee kept in the godown of the company. In view of the objection from the workers against the removal of coffee 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 worth Rs. 43,52,977.64 was found missing. Thereafter, the Coffee Board filed a claim statement showing the adjust-ment of the amounts due to the company from the Coffee Board, which according to the applicant would come to Rs. 61,84,049.24. 3. There were several revival schemes to revive the company. Those revival schemes were not accepted by the company court for various reasons. However the company paid the amounts due to the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 (Mad.) cited by the petitioner observed that various High Courts took the view that when there was a bona fide dispute regarding the debt then the company court would normally order the winding up of the company. On analysing the facts the company court found that the company had accepted certain claims of the Coffee Board and in turn had made certain counter claims against the Board. Ultimately the court observed to the effect that the Coffee Board is a 'creditor' coming within the purview of section 434. That means the court took the view that the Coffee Board is satisfied of the ingredients of rule 101 for substitution in order to prosecute the Company Petition. The court further observed that in consideration of larger public interest also the substitution claimed shall be allowed. Finally the court directed the Coffee Board to make necessary amendments to the petition for winding up. 5. However, the learned counsel for the appellant company challenged the above findings of the learned company judge. He reiterates the plea that the Coffee Board is not a 'creditor' and therefore it is not entitled to file an application under section 434 for winding up of the company. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." The provisions contained in this rule are more or less akin to the provisions contained in Order XXIII rule 2 A of the Code of Civil Procedure, 1908. The underlying cause to be considered under this provision is whether the person applying for transposition has a substantial question to be decided as against any of the other defendants whereas under rule 101 the prime cause is whether the creditor who seeks substitution would have a right to present a petition for winding up. 8. When we analyse rule 101 it would be crystalline that the court has discretionary power to substitute as petitioner any creditor or contribu- tory who in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han two days before the day fixed for the hearing of the petition and a copy of the affidavit in reply shall be served on the day of the filing thereof on the person by whom the affidavit in opposition was filed or his advocate. What is revealed from this rule is that the petitioner can file reply to the affidavit filed in opposition and that is equally available in the case of a petition amended pursuant to the order of substitution under rule 102. In the present case it is uniformly submit- ted by the counsel on both sides that an amended petition had been presented to the court as required under rule 102 but the appellant- company had not filed the affidavit in opposition as required under rule 103. 10. The sole question which we are concerned is whether the learned company judge is justified in passing an order allowing substitution of the Coffee Board as the petitioner in the above company petition. As observed earlier rule 101 confers wide discretion on court to substitute as petitioner any creditor or contributory who in the opinion of the court would have the right to present a petition. This would indicate that when the court is prima facie satisfied from the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company. It may be possible to argue that this is only an observation and the question as such has not been decided. Whatever that be, we are subscribed to the view that substitution is not automatic and it is not ipso facto follow upon the application made in that behalf. We are also of the view, what is required is only a prima facie satisfaction of the court for ordering substitution under rule 101. 12. As pointed out above, the underlying question is whether the Company Court is prima facie satisfied that the Coffee Board is a creditor who would have a right to present a petition for winding up. The Company Court has placed reliance on the averments contained in paragraph 6 of the counter affidavit filed on behalf of the company. What revealed from the counter affidavit is that the company had accepted certain claims of the Coffee Board but at the same time certain counter claims had been made against the Coffee Board. In this context it may be noticed that an auditor had been appointed to verify the accounts as per the order of the court dated 1-10-1996. It has come out from the pleadings that various amounts are due from the company to the Coffee Board and f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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