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TMI Blog2002 (3) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ontentions raised before this court, the order sought to be reviewed by the applicant (original petitioner) is reproduced as under: "On January 10, 1995, by a common order along with other matters, this matter was also notified on a special board. Occasion arose for this court to pass the common order because, in many matters listed for final hearing, the petitioners had not taken trouble to get the matter advertised or to file affidavit as to the advertisement. Under the Companies (Court) Rules 31, this would amount to a default in carrying out the direction. With a view to give one chance time was fixed up to January 23, 1995, to submit to the court that there is no breach of the said rule and the directions as to advertisement have been carried out. The Department was instructed not only to affix the board prominently at all the places where boards are published and affixed, but as far as possible to inform the concerned advocates individually also. On account of personal reasons, the matter could not be taken up on January 23, 1995, and, therefore, the entire board of that date was adjourned to January 30, 1995. This happens to be one of the matters, where in spite of grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined to dismiss the matter for want of prosecution in reference to rule 31 of the Companies (Court) Rules. 4. A plain reading of the order passed on January 31, 1995, in Company Petition No. 51 of 1990 clearly indicates that on January 10, 1995, a common order along with other matters was passed and the matter was also notified on a special board. Occasion arose for passing the common order is also reflected in the order. Company petition was ordered to be dismissed for default as the court had found that : "there is no compliance of the directions as to publication of notice and filing of affidavit. This matter is therefore, liable to be dismissed under rule 31 of the Companies (Court) Rules." Undisputedly, the court had felt that in spite of granting of this much time and bringing to the notice of the concerned learned advocate that there was no compliance with the directions, the petition must be dismissed. 5. The resistance in the reply affidavit, if perused and appreciated with all other aspects it can be said that this is an affidavit of denial. It further contends that this is a case of absence of due care and diligence on the part of ( i ) advocate s clerk, ( i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company petition. The parties who are not before the court may be adversely affected in case the respondent-company is ordered to be wound up after restoration. So, this court should not exercise its powers under section 5 of the Limitation Act. 7. On perusal of the proceedings and the entire record of Company petition No. 51 of 1990 and after careful consideration of the contentions raised by the parties in their more than one affidavits, the following facts which are very relevant for the purpose of deciding this application, emerge : (1)The applicant-Virat Engineering Pvt. Ltd. had a claim against respondent-company with interest at the rate of 20 per cent per annum against advance of a sum of Rs. 8,37,304 as and by way of call money deposit to the respondent-company. (2)On account of terms of repayment of the said deposit, a dispute had crabbed and the said dispute had been referred to the sole arbitrator by way of an agreement dated November 5, 1988. (3)( i ) The arbitrator gave an interim award on February 26, 1988, and February 10, 1989, and the respondent-company was directed to repay to the petitioner-company a sum of Rs. 3,97,298 together with interest at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efect of non-filing of the affidavit of publication and avoided the matter from being dismissed from want of prosecution. So, this is a case of explained inaction and not of wilful omission. (9) This is also a case where the applicant-company had shifted its office at Bombay, and, therefore, there was communication gap. The respondent though have not admitted this aspect in affidavit in reply but it is on record that the office of the applicant-company was shifted and as the Gujarat High Court also has been shifted in the year 1998-99, as submitted, the record of disposed of matters in the new premises either were not available or the same were not easily traceable. 8. There is no reference as to the presence of the advocate of the respondent-company on the day on which the company petition was dismissed for want of presence of the advocates. 9. During the course of hearing of the present application, learned counsel for the respondent-company Mr. Desai when asked to verify as to whether learned counsel for the respondent was present on the date of dismissal of the petition for non-prosecution, but learned counsel for the respondent-company was not in a position to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such a case should be liberal and should not take highly technical view in the matter where there is no case of negligence or inaction to take steps for filing appeal or restoration proceedings and the court if it is satisfied that the applicant was not sleeping over the matter then the endeavour by the court should be to do substantive justice and not of throwing out the case on technicality of limitation. While interpreting the word "sufficient cause" occurring in section 5 of the Limitation Act and other similar statutes, the applicant is supposed to explain the delay. If such explanation is rendered then the same should be honestly in rational, common sense and pragmatic manner and should not be understood in pedantic and impractical way. Ordinarily, the litigant does not stand to benefit by instituting the proceedings at a belated stage. However, if it is established that belated institution of the proceeding is likely to put such petitioner or applicant to some benefit of advantage or it is likely that the same may adversely affect the third party or prejudice the other side then in that case, the court should think on a number of aspects. The following aspects can be tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is caused because of some negligence on the part of the advocate s clerk or counsel himself. Here the role of counsel appearing for the respondent-company is also found relevant. The applicant who is awarded with interim award with 20 per cent interest which is to be compounded quarterly rates as per the interim awards passed by the arbitrator can be compensated or can be saved from the disadvantageous position. By developing some device at the time of granting the application for condonation of delay, such apprehended prejudice can be prevented. Mrs. Soparkar has rightly submitted that the scheme of sub-section (2) of section 536 of the Companies Act gives wide powers to this court. It would be proper to quote the relevant sub-section (2) of section 536 of the Companies Act, which reads as under: "536. Avoidance of transfers, etc., after commencement of winding up. (2) In the case of a winding-up by or subject to the supervision of the court, any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding up, shall, unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. 16. In the case of N. Balakrishnan v. M. Krishnamurthy AIR 1998 SC 3222, where a delay of 883 days has been ordered to be condoned. The Apex Court has said that : "11. Rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cality when otherwise the claim is meritorious. The order of dismissal of petition after publication of advertisement for want of prosecution for non-compliance with some procedural rules is likely to take the petitioner-company to serious prejudice and it would be miscarriage of justice. The petitioner had approached the court with a winding up petition as the interim award passed by the arbitrator appointed by the parties was not complied with. The petition, therefore, was not in the style of recovery of money proceeding. Negligence on the part of the clerk of counsel or some loss on the part of counsel appearing for the petitioner-company is only found and, therefore, ignoring the period of delay caused, Company Petition No. 51 of 1990 is required to be restored on file. So, in the case of N. Balakrishnan ( supra ), the Apex Court with a view of strike the balance has ordered that : "In this case explanation for the delay set up by the appellant was found satisfactory to the trial court in the exercise of its discretion and the High Court went wrong in upsetting the finding, more so when the High Court was exercising revisional jurisdiction. Nonetheless, the respondent must ..... X X X X Extracts X X X X X X X X Extracts X X X X
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