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TMI Blog2005 (8) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 of 1985, Pratap Investment Private Limited being Company Petition No. 155 of 1985 and Anjana Dealers Private Limited being Company Petition No. 156 of 1985 against the very same respondent-company, namely, Alaukik Trading Investment Private Limited. 4. The petitioners of all the four petitions have also filed Company Application Nos. 233 to 236 of 1985 praying for appointment of the Official Liquidator or some other fit and proper person as Provisional Liquidator of the respondent-company and further praying for an injunction against the respondent-company from dealing with, disposing of, alienating or in any manner encumbering any of the immovable properties held by or standing in the name of the respondent-company. 5. Company Application No. 5 of 1986 is filed by the petitioner in Company Petition No. 153 of 1985 seeking direction to the Official Liquidator or some other officers of this Court and authorising him to take charge and custody of the Books of Account and Records etc. of the respondent- company described in Exh. G to the affidavit of Shri S.K. Thakker dated 11-1-1986 filed in support of the Judge s Summons in the said Company Application. 6. Company A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aekwad into stock-in-trade, a sum of Rs. 1,25,00,000 was lying to the Credit of the said Gaekwad with the said firm which subsequently became the sole proprietary concern of the respondent-company. 10. By a Deed of Gift dated 30-3-1973, the said Shri Gaekwad made an onerous gift to the petitioner of a sum of Rs. 30,00,000 out of the said sum of Rs. 1,25,00,000 lying to his credit with the said firm. In consideration of the said gift, the petitioner, inter alia, covenanted to pay certain amounts to Sir Sayajirao Gaekwad Charities, a Public Charitable Trust set up by the said Shri Gaekwad, regularly for a period of 55 years as set out in the said Deed of Gift. Pursuant thereto, the said sum of Rs. 30,00,000, out of the said sum of Rs. 1,25,00,000 lying to the credit of the said Gaekwad was transferred to the credit of the petitioner-company in the books of the said partnership firm in which the respondent-company was also a partner. Simultaneously, with the said Deed of Gift, similar onerous gifts were made by the said Shri Gaekwad of different amounts out of the balance amount lying to his credit with the said Partnership Firm to certain other associated companies, who are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year and lastly, the balance-sheet of the company as on 31-3-1983, a sum of Rs. 25,87,729 was acknowledged as due and payable by the company to the petitioner. 12. Despite receipt of the statutory notice, no payment has been made by the respondent-company and hence, the present petition is filed by the petitioner in October, 1985 through their advocate Shri G.N. Shah. 13. On notice being issued by this Court and on service being effected on the respondent-company, an appearance was filed and affidavit-in-reply was filed on 24-1-1986. The respondent-company has raised several objections against the maintainability of the winding up petition. It is contended that the amounts claimed as due and payable from the respondent-company is not debt within the meaning of the Companies Act, 1956 as the same cannot be considered as actionable right or an enforceable claim. It is also contended that the amount claimed by the petitioner-company is merely on account of the amount transferred in favour of the petitioner-company, merely by way of an accounting entry and does not represent any amount claimed by the petitioner in terms of any actual or factual transaction, such as dues in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment to the petitioner which would warrant winding up. Though Shri S.K. Thakker was the Chairman of the respondent-company, the real executive powers were vested in the said Shri Gaekwad. It is also contended that the said Shri S.K. Thakker has not kept the custody of the books of account of the company. On the contrary, Company Application No. 5 of 1986 was filed before this Court seeking direction to the Official Liquidator to take charge of the books of account as neither the said Shri Gaekwad nor any other Director have come forward to take charge of the books of account and other statutory records of the respondent-company. It was, therefore, contended that the winding up petition was required to be admitted and after public advertisement, necessary order for winding up was required to be passed. 15. On behalf of the respondent-company, additional affidavit in opposition was filed on 11-4-1986 and several legal issues were raised. 16. On behalf of the respondent, further affidavit was filed on 17-6-1998 for the limited purpose of placing on record certain relevant facts, which were occurred subsequent to the filing of the present petition and according to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impleading petitioner as well as respondent-company as parties thereto and decision in that regard that if the company was accepting the liability, whether it was willing to discharge the same to the petitioners or to those who are the ultimate beneficiaries could be taken by the Board in a duly convened meeting for that purpose as for discharge of the alleged debt, the company might have to sell or mortgage the fixed assets/investments for the purpose of raising funds, through a properly convened Board meeting. The time was, therefore, sought for to enable the company to convene the Board meeting to take a decision thereof and inform the Court about the same. The Court has also directed the respondent-company to take necessary steps to convene the Board meeting by putting the question of discharging liability referred to in all these petitions in its agenda. 18. Subsequent to the aforesaid order, one more affidavit was filed on behalf of the respondent-company on 3-8-1998 wherein it is stated that the independent Chairman Mr. Justice C.T. Dighe, former Judge, Bombay High Court, has undergone a bye-pass surgery about two weeks before the date of the said affidavit and, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Lahore Enamelling Stamping Co. Ltd. v. A.K. Bhalla [1958] 28 Comp. Cas. 216 wherein it is held that entries in the balance-sheet of a company as regards amounts due to creditor constitute an acknowledge-ment of debts due to them within the meaning of section 19 of the Indian Limitation Act. 23. Mr. Bharda has further relied on the decision of this Court in the case of Ambica Mills Ltd. v. CIT AIR 1964 Guj. 208 wherein company acknow-ledging in its balance-sheets unpaid wages every year was sought to be brought to taxes under section 10(2A) of the Income-tax Act on the ground that the liabilities having been time-barred were extinguished, this Court has held that the liability of the assessee-company to pay the unpaid and unclaimed wages could not be said to be barred by limitation on account of the yearly acknowledgements thereof in the balance-sheets and obviously, therefore, these amounts could not be said to have been fictionally stamped with the character of profits and gains as all along they retained the character of liabilities owing to the annual acknowledgements made by the assessee-company. These acknowledgements were not in respect of time-barred deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit has been filed and one Shri Gautam Thakker has just verified the petition. Under Rule 21 of the aforesaid Rules, where a petition is presented by a body corporate, it shall be in Form No. 3. He has further submitted that in the opening paragraph of Form No. 3, the petitioner should mention his age, his father s name, residential address, etc. and in para 1, he must give his designation and he must be a person who is fully authorised by the petitioner-company to make the affidavit. In para 2, the deponent should state that the averments made in the petition are based on information and that he believes the same to be true. In the instant case, no such facts have been given nor any such statements to be made or are required to be made under the aforesaid rules 18 and 21 of the Rules read with Form No. 3 have been made. Mr. Kavina has further submitted that the said Shri Gautam Thakker has not filed any particular or document showing his authorisation or authority to file the said Company Petition. As is apparent from the petition, the petition is purported to have been filed on behalf of the company. The company being a legal person, it cannot file a petition of its own phy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a creditor and the respondent-company is considered to be a debtor, this Court is not the proper forum wherein money claims can be made in the guise of winding up petitions. The very act of the petitioner- company in surreptitiously obtaining an ad interim order against disposal of the respondent-company s property, namely, Baroda Rayon Shares, itself will show that the intention of the petitioner-company is to use the Company Petition as a leverage to use coercive force and bring pressure against the respondent-company in obtaining moneys which the respondent-company does not owe to the petitioner Company. 29. Mr. Kavina has further submitted that the claim of the petitioner- company itself is time-barred inasmuch as the winding up petitions were filed after about 12 years from the date of execution of the Gift Deed, as in clause 1( i ) of the Gift Deed, the intention of the donor has been mentioned or disclosed in unequivocal terms, that the properties in pursuance of the Gift Deed have been transferred to the donee. The gift was made and was understood to take effect from the same date on which it was executed, namely, 30-3-1973. He has further submitted that the properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged acknowledgement is devoid of any effect and is a nullity in the eye of law as it is not made before the expiration of the prescribed period for a suit or application in respect of the alleged Gift Property. The Gift Deed was executed on 30-3-1973 and no acknowledgement has been made before 30-3-1976 by the donee and no suit has been filed for enforcement of the claim under the Deed of Gift before that date. The petitioner-company is not justified in relying upon the acknowledgement made on the balance-sheet of the company from 1978 which is two years after the expiry of the period of limitation prescribed under the Limitation Act. 32. Mr. Kavina has further submitted that the alleged acknowledgement is a nullity and is of no consequence inasmuch as it was not made bona fide by the respondent-company. There is no dispute about the fact that the balance-sheet and profit and loss account have been prepared while the said Shri S.K. Thakker and Shri G.K. Thakkar were Directors of the respondent-company and they were also the Directors and dominant shareholders of the petitioner-company at the relevant time. They have abused their position as Directors of the respondent-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sanction and the petition was, therefore, barred by limitation and had to be dismissed. 35. Mr. Kavina has further relied on the decision of the Hon ble Supreme Court in the case of Kerala State Electricity Board v. T. P. Kunhaliumma AIR 1977 SC 282 wherein the petition was filed before the District Judge under section 16(3) of the Telegraph Act claiming enhanced compensation beyond 3 years from the date of service of notice intimating fixing of compensation by the State Electricity Board, and the Hon ble Supreme Court has held that the petition was to the District Judge as a Court. The petition was one contemplated by the Telegraph Act for judicial decision and the petition was an application falling within the scope of Article 137 and, therefore, petition was barred by time. 36. In support of his submission that when the claim is barred by limitation, the Court is not required to adjudicate on the merits of the claim, Mr. Kavina has relied on the decision of the Madras High Court in the case of Vijayalakshmi Art Productions v. Vijaya Productions (P.) Ltd. [1997] 88 Comp. Cas. 353 wherein it is held that it is the duty of the Court to dismiss the claim made beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erprises v. Best Crompton Engineering Ltd. [2003] 4 CLJ 115 1 wherein debt alleged to be in respect of transaction said to have taken place in 1991, the petitioner has not taken appropriate steps in time for claiming amount due. There was no acceptable explanation for not taking such appropriate steps for last about 9 years. The petition was dismissed by the Court on the ground that it was barred by delay and laches. 41. Mr. Kavina has further relied on the decision of Delhi High Court in the case of Kalra Iron Stores v. Faridabad Fabricators (P.) Ltd. [1992] 73 Comp. Cas. 337 for the proposition that the company s plea that the Managing Director of the company had taken away the company s cheque book and rubber stamp, and had issued the cheques, was one of substance and the same should be taken into consideration while considering the winding up petition against the respondent-company. 42. Mr. Kavina has further relied on the decision of Madras High Court in the case of N. Ethirajulu Naidu v. K.R. Chinnikrishnan Chettiar AIR 1975 Mad. 333 wherein the Court has held that the distinction between an acknowledgement under section 18 of the Limitation Act, 1963 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt at the time of admission of all these petitions. The Court is also aware about the fact that appeals filed by the respondent-company against the order of admission and advertisement are still pending before the Division Bench of this Court. In this background of the matter, when the Court is called upon to decide the winding up petitions filed against the respondent-company finally, the Court will have to decide on the basis of pleadings made, materials produced and contentions raised and arguments canvassed before the Court. 44. The starting point of the petitioners claim against the respondent- company is the Deed of Gift executed on 30-3-1973 between Late Shri Fatesinghrao Gaekwad on the one hand and the petitioner-company on the other hand. The said Shri Gaekwad has gifted all his right, title and interest in the sum of Rs. 30 lakhs out of the sum of Rs. 1,25,00,000 lying to his credit in his account with the firm of M/s. Gaekwad Real Estate Traders. However, the said gift was onerous gift and it was not without consideration. The consideration was that the petitioner-company was liable to pay for the period of five accounting years from 1-4-1973 an amount equal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave signed the petitions was also not disclosed. The Court, however, is not inclined to rest its decision on these technical issues. What is weighed with the Court is the issue regarding limitation raised by the respondent-company. All these petitions are filed in the year 1985. The gift was taken place on 30-3-1973. Between 1973 to 1978, the firm was in existence wherein the respondent-company was also one of the partners. During this period, the petitioners have never lodged their claim even with regard to the amount to be annually paid to them so as to enable them to discharge their obligations towards the Charitable Trusts. There is nothing on record to show that the Firm has accepted its liabilities till 1978, barring stray instances of few payments made to the petitioners. The Deed of Dissolution executed on 31-3-1978 does contain a reference that the respondent-company has taken over all the assets and liabilities of the firm i.e. M/s. Gaekwad Real Estate Traders as on 31-3-1978. However, there are no details whatsoever from the record of this proceeding as to which assets and liabilities were taken over by the respondent-company. It is true that in the balance-sheet of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay and latches or that there is no valid, genuine or bona fide acknowledgement or that the dispute about limitation is a substantive dispute, the Court would nor- mally not pass winding up order. The cumulative effect of all these arguments and the decisions cited before the Court prevent the Court from passing winding up order in all these petitions. 47. There is one more reason which is weighed with the Court is that the ultimate beneficiary, namely, Charitable Trust has filed Civil Suit in the Court of Civil Judge (S.D.), Vadodara against the petitioner as well as respondent-company praying for an injunction restraining the respondent-company from making any payment to the petitioner herein. The petitioner has filed this petition against the respondent-company only with a view to enable it to discharge its obligation towards the Charitable Trust. All these issues which are raised by either of the parties in the present petition will necessarily be raised in the pending suit before the Civil Court. In such a situation, this Court does not think it fit and proper to adjudicate all these issues in the present petition and seal the fate of either of the parties before the Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above order and judgment is pronounced, Mr. P.C. Kavina, learned advocate appearing for the respondent-company has submitted that the respondent-company has moved Company Application No. 58 of 1996 which is also disposed of today along with other applications by observing that since the petitions have been dismissed, Company Applications could not survive. He has further submitted that in Company Application No. 58 of 1996, the respondent-company has prayed for the direction to produce the books of account and other records, papers, files, vouchers, the Common Seal of Alaukik Trading Investment Pvt. Ltd., and other documents and particulars etc. belonging to the applicant company lying in the possession or control of the petitioner. The said fact has also been admitted by the petitioner in the affidavit of Shri Gautam Thakker filed in Company Petition No. 153 of 1985 on 4-4-1986, wherein in para 26 of the said affidavit, it has been stated that in these circumstances, the petitioner-company had no other alternative but to apply to this Court by way of Company Application being Company Application No. 5 of 1986 for directions that the Official Liquidator to take charge of the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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