9911796707
TMI Blog2006 (2) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,000 per month within a duration of fifty months. Chit was commenced in the month of March, 1998. Subsequently, the first respondent became the prized subscriber and he was paid the prize amount of Rs. 60,000 under a cheque bearing No. 510285, dated 16-6-1998, after deducting an amount of Rs. 150 towards verification fees and Rs. 1,300 towards arrears of subscription. Respondents 2 to 4 stood as guarantors to the first respondent and all of them together executed a joint promissory note in favour of the company, besides respondents 2 to 4 executing an agreement of guarantee in favour of the company. The first respondent from 10-4-1998 to 17-9-2000 paid in all a sum of Rs. 64,836.20 ps. towards the monthly subscriptions for 31 months inclusive of dividends. There remained a balance of Rs. 35,163.80 ps. to be paid for the remaining period of 19 months. The Assistant Official Liquidator got a notice, dated 30-5-2003, issued to the first respondent demanding payment of the balance amount, which was served upon the first respondent. However, the first respondent failed to pay the said amount, The third respondent got a reply, dated 7-6-2003, issued through his counsel mentioning int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outset is section 446 of the Companies Act, which confers the jurisdiction on the Company Court. It is expedient to excerpt the provision for brevity and better understanding of the matter as under : "446. Suits stayed on winding up order. (1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose. (2) The Court which is winding up the company shall, notwithstanding any thing contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of ( a )any suit or proceeding by or against the company; ( b )any claim made by or against the company (including claims by or against any of its branches in India); ( c )any application made under section 391 by or in respect of the company; ( d )any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company; whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was conferred upon the Company Court analogous to the one conferred under sub-section (2) of section 446. In that view of the matter, sub-section (2) was introduced to enlarge the jurisdiction of the company Court so as to facilitate the disposal of winding up proceeding under the Companies Amendment Act, 1960. Thus, the jurisdiction of the Company Court was enlarged to meet any eventuality in the process of liquidation. Section 446 of the Companies Act is wide in terms and is not restricted to any category of suits or any class of plaintiffs. It is wide enough to cover all suits and other legal proceeding, whoever may be the plaintiffs. 8. Rule 6 of the Companies (Court) Rules, 1959, makes the provisions of the Code of Civil Procedure (for short the Code ) apply to the proceedings under the Act before the Company Court. Therefore, the proceedings under the Act are to be regulated by the procedure prescribed under the Code save and except it is otherwise expressly provided under the Companies Act and in the absence of any contrary provision. It is beyond doubt for the said reason that the provisions of Order 8 of the Code would squarely apply to the proceedings before the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are not specifically provided for under the Act. 13. As per section 19 of the A.P. Court Fees Act, the fee payable under the Act shall be computed in accordance with the provisions contained in Chapter IV, Chapter VI, Chapter VII and Schedules I and II of the A.P. Court Fees Act. Chapter IV contains sections 19 to 49. Chapter V contains section 50, the residuary provision. Chapter VI, however, deals with probate and letters of administration. Chapter VII deals with refunds and remissions. Schedule I appended to the A.P. Court Fees Act contains various articles prescribing proper fee to be paid. Article 1 prescribes the fee payable on the plaint or written statement pleading a set off or counter-claim depending upon the value claimed. This fee is payable on the plaint or written statement pleading a set off or a counter-claim on ad valorem basis. Schedule II, however, provides for payment of fixed Court fees on various categories of petitions, memorandum of appeal and other miscellaneous matters. 14. Article 11 of Schedule II prescribes the payment of Court fees on the applications filed. Clause ( r ) thereof prescribes Court fee to be paid on petitions under sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhara Singh 1975 Tax LR 1670 a learned Single Judge of the Punjab and Haryana High Court had taken a different view that it was only when the proceeding was filed in the form of a suit that the Court fee should be paid as provided in article 1 of Schedule 1 of the Court Fees Act, 1870, otherwise the application would have to be stamped as an application under the Companies Act as provided in article 1( d ) of Schedule II of the Court Fees Act, 1870. 18. The raison d etre seems to be that the object of giving jurisdiction to the High Court to decide the matters covered by section 446(2) is to provide a speedy and cheap remedy to the Official Liquidator and if the Official Liquidator is called upon to pay full Court fee on the application filed under section 446(2)( b ), like a suit, the very purpose of the enactment would be lost. 19. In Sudarsan Chits (I) Ltd. v. O. Sukumaran Pillai [1985] 58 Comp. Cas. 633 the Apex Court held thus : "Before we advert to the question of construction of section 446(2)( b ), it would be advantageous to notice the historical evolution of the provisions as well as its present setting. Section 171 of the Indian Companies Act, 1913, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the repealed Indian Companies Act, 1913, the Official Liquidator in order to realize and recover the claims and subsisting debts owed to the company had the unenviable fate of filing suits. These suits, as is not unknown, dragged on through the trial Court and courts of appeal resulting not only in multiplicity of proceedings but in holding up the progress of the winding-up proceedings. To save the company which is ordered to be wound up from this prolix and expensive litigation and to accelerate the disposal of winding up proceedings, Parliament devised a cheap and summary remedy by conferring jurisdiction on the Court winding up the company to entertain petitions in respect of claims for and against the company. This was the object behind enacting section 446(2) and, therefore, it must receive such construction at the hands of the Court as would advance the object and at any rate not thwart it." (p. 637) 20. From the above, it is obvious that jurisdiction has been conferred upon the Company Court to adjudicate a suit or proceeding by or against the company, any claim made by or against the company, any application made under section 391 by or against the company and any que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Punjab and Haryana High Court in Malhara Singh s case ( supra ) and distinguished the Judgment of the Mysore High Court in Muniswamy Achary s case ( supra ). As can be seen from the matrix in Jaimal Singh Makin s case ( supra ), the Official Liquidator filed a petition under section 446(2)( b ) of the Companies Act, like in the instant one, for recovery of Rs. 1,11,866.30 ps. from three persons including the appellant. 22. From the above, it is obvious that the applications to be filed by the Official Liquidator under section 446(2)( b ), having regard to the object behind the incorporation of the said provision into the statute, should be treated as petitions rather than the regular suits, although for all practical purposes they are in the nature of suits. But, having regard to the fact that they are in the nature of a cheaper and effective remedies provided under the statute, the Court fee shall have to be paid as if they are the applications but not as suits. However, it is quite inescapable conclusion that the Court fee shall have to be paid on such applications. 23. After the advent of the new Act of 1956, suitable amendment should have been brought into the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
