9911796707
TMI Blog1998 (7) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... particular emphasis on the observation "a petition for winding up cannot be placed for hearing before the court unless the petition is advertised, that is clear from terms of rule 24(1)." 2. Mr. Thakore, the learned counsel appearing for the original petitioner urges that requirement as to publication under rule 24(1) is referable only to the mode and manner of publication and that is subject to the directions of the court. Since, the court while admitting petition had not directed for publishing in the Official Gazette but had directed the same to be published in two newspapers only, it was not necessary for the petitioner to have advertised the notice by publishing the same in the Official Gazette. The non-publication in the Official Gazette does not vitiate the order under review. At any rate the issue as to effect of non-publication in Gazette being highly debatable, no review would lie. 3. The fact of non-publication in the Official Gazette is not in dispute. 4. The question thus arise for consideration is whether publication of petition for winding up is required to be advertised in all the three modes, namely, an English daily, a daily in regional language of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment does not flow from rule 24 itself. The rule 24 opens with the words 'where any petition is required to be advertised' makes it sufficiently clear that requirement of advertisement exist de hors and independent of the provisions of rule 24. Sub-rule (2) which vests power with the court to dispense with advertisements evidently relates itself to opening phrase of sub-rule (1) when it expresses 'dispense any advertise-ment required by these rules'. Obviously it refers to rule or rules under which petition is required to be advertised and not to directions contained in sub-rule (1) which comes into operation when a petition is required to be advertised under various other provisions. Power to dispensation of advertisement referred to in sub-rule (2) thus is also referable to require-ment of advertisement of the petition under the relevant rules and not to procedure of advertisement, under rule 24(1). As a matter of fact, rule 24(1) prescribes the time and the mode of advertisement of petition wherever it is so required to be advertised under the relevant rule. It directs that an advertisement of a petition unless otherwise ordered by the court or otherwise provided by the rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 69 governs the procedure for dealing with the petitions for a compromise or arrangement under sections 391 and 394 of the Compa- nies Act, 1956 ('the Act') and envisages directions that may be made by the Court in an application under section 39(1) of the Act for convening the meeting of the members or creditors, or class of them. The directions which are envisaged under rule 69 also envisages as to the notice to be given of the meeting or meetings and the advertisement of such a notice. 8. The rule 74 envisages that the notices of the meeting shall be advertised in such newspapers in such manner as the Judge may direct not less than 21 days before the date fixed for the meeting. It may be noticed that the time fixed for publication under rule 74 is different from what has been envisaged in rule 24(1). That is to say, a larger time gap has been provided between the date of meeting and publication of notice, than what has been envisaged for advertisement generally under rule 24. However, no specific provision has been made as to mode of advertisement of notice of meeting. Requirement of advertisement stem from rule 69. Minimum period before which such notice must be advertised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rules provide for discretion in the Court to issue directions for advertisement or not. That provision is to be found in sub- rule (2) of rule 24, which as noticed above, envisages dispensation of 'advertisement required by these rules' except in the case of a petition to wind up. Thus it is reasonable to infer that while advertisement required under rules 53,74 and 80 can be dispensed with, advertisement of petition for winding up required under rule 96 cannot be dispensed with. 12. The next question which arise for consideration is whether sub-rule (2) of rule 24 controls the provisions of sub-rule (1) of rule 24 as well? I am of the opinion that requirement to advertise a petition is a substantive requirement of the rules and the manner and method of fulfilling that obligation of advertisement is a part of procedure governed by sub-rule (1) of rule 24 or as envisaged in other rules as notices above. The rule 24(1) only provides generally in the absence of directions to contrary or provision to the contrary in rules that an advertisement should take place not less than 14 days before the date of hearing and it should be published in the Official Gazette, a daily newspaper i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invariably and inflexibly advertised in the manner prescribed under rule 24(1) and the Court had no discretion to order advertisement in a different or other manner. 14. The issue at hand corresponds more proximately with principle enunciated in Raza Buland Sugar Co. Ltd. v . The Municipal Board AIR . 1965 SC 895. It was a case arising under U.P. Municipalities Act, section 131 of which requires publication of proposals and draft rules along with notice. The publication of proposals and draft rules, etc., were further required to be published in a local newspaper published in Hindi and when there is no such local publication in Hindi, in such manner as the State Government may generally or by special order direct. The proposals were published in a local paper which was not in Hindi but in Urdu language. The contention, as has been raised in this petition, was raised that as the publication of draft rules, proposals, etc., had not been made in accor- dance with the scheme of the statute in local newspaper of Hindi it cannot be said to be a publication at all. The court drew the distinction between substantive requirement as to publication and the procedural requirement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved." In my conclusions reached above, I am fortified by the ratio referred to above. The rule 24(2) relates to jurisdiction of the Court to dispense with the substantive requirement of advertisement of any petition except in the case of petition for winding up. The object of advertising petition for winding up is discernible from format provided for the notice, in Form No. 48. It is to provide an opportunity to every creditor contributory or other person desirous of supporting or opposing the making of an order on the petition of winding up. Keeping the petition for winding up outside the pail of discretion under rule 24(2) serves the object. The rule 24(1) provides generally the manner of informing the creditors contributory or other person desirous of supporting or opposing the making of an order on the winding up petition. It may be noticed that while in case under U.P. Municipalities Act, the publication was not subject to direction of the Government in the case of availability of a local daily in Hindi, still the principle of substantive compliance was brought into play. This in my opinion, need not be invoked in the present case, inasmuch as, a close reading of the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting of lease governed under the notification in the State. The vesting of the property in State did not actually take place as a result of mere issue of declaration by the State Government but vesting takes effect, as a result of the provisions contained in section 4A, on publication of the notification. Thus, keeping in view the scheme of the Act the vesting was to take place on effective notification as per the manner and mode of notification. The statute itself provided emphasis by using the expression 'at least two issues of two newspapers'. Taking note of this, the Court observed: "The Court has also to appreciate the significance of the expression 'at least' used in sub-section (2) of section 3 and the further fact that this sub-section did not merely in general terms direct publication in newspapers but went on to specify that the notification must be published as a minimum in two issues of two newspapers. Such a requirement indicates the emphasis laid down by the Legislature on this manner of publication." 17. Thus considering the object and emphatic expression used by Legisla-ture, the publication specified was held to be mandatory. The statutory scheme was quite di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention raised by the learned counsel. 21. The learned counsel placed reliance on an unreported judgment of this Court in Sonal Cosmetics (Exports) Ltd. v. Harish J. Parikh OJ. [Appeal No. 8 of 1996 [dated 24-4-1996]. The learned counsel for the applicant drew my attention to the contention raised by him with reference to invalidity of the order of winding up made for want of publication in the Official Gazette and finding of the Court that even if it is taken for granted as stated by the learned advocate for the respondent that in Sandesh newspaper it was published on 31-1-1996 and in Indian Express on 10-2-1996, it cannot be said that the notice is published in accordance with the rules. In my opinion, this decision does not render much assistance to the learned counsel inasmuch as the issue whether the Court has power to issue direction to publish the advertisement in a manner different from provided under rule 24(1) was neither raised nor decided but the conclu-sion was reached on the assumption that publication in the three modes provided under rule 24(1) is required. A decision is precedent of conclu-sion raised and decided and not for the premise assumed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n place in accordance with direc- tions of the court, the petition ought to have been dismissed or postponed for hearing with further directions. In fact so far as the manner of advertisement is concerned, the rule 31 itself envisages the 'directions of the Judge or the Registrar as regards advertisement'. Thus rule 31 envisages non-compliance with the requirement of rules generally or non-compliance with the directions of the Court as regards manner of advertisement and service of the petition that would entail dismissal not otherwise. As a matter of fact, close reading of rule 31 also suggest that directions as to advertisement and service of the petition specifically are made subject to the directions of the judge or the Registrar before whom the petition or application is pending and are not to be dismissed if the same accords with those directions. It is not the case of the petitioner that advertisement of the petition has not taken place in accordance with the directions of the Court. This contention on also in my opinion must fail. 25. Lastly it was contended by the learned counsel that in any circum-stances, rule 24 envisages unless the Court otherwise orders and rule 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f exercising power to dispensing with, 'requirement of advertisement' of any sort which may be of petition, or of a meeting of members or of creditors of the company or for any other object, that may be required under various rules. This distinction also supports the conclusion that exercise of discretion under sub-rule (2) is independent of exercise of power to direct required advertisement in manner otherwise than provided under sub- rule (1). 26. No other contention has been raised. The application therefore fails, and is hereby rejected. There shall be no orders as to costs. The learned counsel for the applicant states that the operation of the order of main petition had been stayed during the pendency of these proceed- ings and as the petitioner could not have filed review petition after filing the appeal, petitioner has thus not preferred an appeal against the order of appeal which has remained stayed uptill now, the interim order operating in this application should be allowed to continue until 5-8-1998 to enable him to pursue his remedy of appeal. The learned counsel for the respondent No. 1 objects. However, in the facts and circumstances, the prayer is granted. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
