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TMI Blog2002 (8) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... of undertaking to pay the abovesaid sum in instalments and it again defaulted. The petition was heard and order was reserved and at the time of pronouncement of the order, the respondent once again offered to effect payment of the amount in instalments and based on that, a further memo of compromise was entered into between the applicant and the respondent on 23-11-2001, whereby it is provided that out of the total amount of Rs. 1,70,70,080, a sum of Rs. 1.06 crores had been paid and the balance amount would be paid in instalments and if the respondent committed default in the payment of even one of the instalment, it would be open to the applicant to revive the company petition and in such circumstances, the respondent would waive all defences and such default would be a clear admission of respondent s inability to pay its debts. Once again the respondent failed and neglected to effect payment in terms of memo of compromise. The respondent has no intention of carrying out the assurance. Therefore the present application is filed. 3. The respondent in its counter has stated that the application is misconc-eived, without sanction of law and is liable to be dismissed in limine . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not neglected or failed in its obligation to the applicant. 4. A reply was filed by the applicant, in which, it has stated that the memorandum of compromise was recorded in the order, dated 23-11-2001 and consequently the company petition was dismissed, leaving it open to the applicant to revive the petition in the event of respondent failing to comply with one or more terms of memorandum of compromise. The order was passed in the presence of and with the full concurrence of the respondent and it has also not been challenged and has become final. Having defaulted to pay the amounts as per the compromise, the respondent cannot oppose the revival of the company petition. The contention of the respondent that the procedure should be followed afresh is more reprehensible. The word revive means to give life again and to bring again to life. Filing of a fresh petition will certainly not amount to revival of petition and therefore the contention of the respondent has to be rejected. The subscription amount is intended for subscribing to shares in the respondent-company and the question of paying interest on the same did not arise at that point of time. It is only when the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval of Reserve Bank of India and there is no express prior approval of Reserve Bank of India. The respondent in its counter has not pleaded specifically that the memorandum of compromises is void and it was only argued. Mr. R. Murari, learned counsel for the applicant, contended that the subscription amount was intended for subscribing to shares in the respondent-company and hence the question of paying interest did not arise at that point of time and it is only when the respondent fraudulently refused to allot shares to the applicant, after having received the entire subscription money, the question of interest arose and the applicant made an application to the Reserve Bank of India, in pursuance of which, the Reserve Bank of India by their letter, dated 30-3-2002, have permitted the applicant to receive a sum of Rs. 50,70,080 and further interest as per the memorandum of compromise subject to the condition that the interest so received would be credited to the applicant s NRO Account. A xerox copy of the letter, dated 30-3-2002, of the Reserve Bank of India is also produced. 9. It is true that under section 47(2) of the Foreign Exchange Regulation Act, 1973 every contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagement Act is devoid of merit and has to be rejected. The memorandum of compromise, dated 23-11-2001, is not against public policy and is not violative of the provisions of the law and is perfectly legal. 10. The second contention of Mr. Dulip Singh, learned Senior Counsel for the respondent, is that though the order, dated 23-11-2001, provides for revival of the company petition, it cannot be considered as restoration of the company petition and the applicant should follow the procedure afresh. According to him, the proceedings under section 433 of the Companies Act, 1956 are proceedings in rem and the company petition having been dismissed cannot be scurruptuously revived on account of likelihood of subsequent contracts having accrued after dismissal of the company petition. In short, his contention is that default in payment of instalments would not revive the original cause of action, though that conduct of debtor may amount to a fresh cause of action. Per contra, Mr. R. Murari, the learned counsel for the applicant, contended that the memorandum of compromise was recorded and the company petition was dismissed giving liberty to the petitioner to revive the company p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the Code. ...." In Satish Churn Law v. H.K. Ganguly AIR 1962 SC 806, the Apex Court held as follows. "8. ... Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Court s inherent jurisdiction." In Krishnan v. Krishnamurthi AIR 1982 Mad. 101, a Division Bench of this Court held as follows : "5. ..... Where the Code is silent and where the exercise of power is not opposed to or prohibited by the provisions of the Code, there could be no doubt that the court could invoke its inherent jurisdiction if it is satisfied that it is necessary for the ends of justice or to prevent the abuse of the process of the court." 12. The provisions of the Code of Civil Procedure, 1908 so far as applicable shall apply to all proceedings under the Companies Act and the Rules. The inherent powers can be exercised wherever the Code is silent in order to prevent abuse of process of court or to meet the ends of justice. It cannot be exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier writ petition was finally disposed of on 13-2-1991 in the terms noticed supra notwithstanding that there was no verbatim reproduction of the same in the order. The orders passed in this regard admits of no doubt or give any scope for controversy. While so, it is beyond ones comprehension as to how it could have been viewed as a matter of mere contract between parties and under that pretext absolve itself of the responsibility to enforce it, except by doing violence to the terms thereof in letter and spirit. As long as the earlier order dated 13-2-1991 stood, it was not permissible to go behind the same to ascertain the substance of it or nature of compliance when the manner, mode and place of compliance had already been stipulated with meticulous care and detail in the order itself. The said decision was also not made to depend upon any contingencies beyond the control of parties in the earlier proceedings." In Somdutt v. Govind Ram AIR 2000 SC 1638, the Apex Court laid down as follows : "4. ... It is not in dispute that the premises in question were in the occupation of Bishandas, the father of Govind Ram (Respondent). By virtue of the compromise which was entered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g been disputed at any point of time by any of the parties, the appellant long after that order came to be made chose to pretend as if no order had been made and it was under no obligation to purchase the shares which it had undertaken to purchase. It must be re-emphasized here that that order was at no point of time questioned in any legal proceedings by the appellants . . . . The facts already set out clearly show that the appellants derived a great advantage by making the statements they did through their counsel before the Company Law Board and persuaded the respondents to agree to the proposal, and after the agreement came to be recorded, the Company Law Board did not and was not required to proceed further in the matter regarding investigation into the affairs of the company. The investigation which the respondents had sought into the affairs of the company was thus successfully avoided. It is now not open to the appellants to turn round and claim that their actions should not be regarded as binding on them and that the technicalities of the Code of Civil Procedure should be imported in order to defeat the justice of the case. Acceptance of the arguments now advanced for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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