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TMI Blog2012 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT Ramesh Ranganathan, J. Company Petition No. 209 of 2010 was filed by M/s. Nettlinx Ltd. (a company registered under the Companies Act, 1956, having its registered office at Hyderabad), under sections 433(e) and (f), 434(1)(a) and 439 of the Companies Act, 1956, read with rule 95 of the Companies (Court) Rules, 1959, for winding up of M/s. Integrated Broadcasting Co. P. Ltd. (I-News) having its registered office at Hyderabad. Notice before admission was ordered on November 23, 2010 and, despite service of notice, none appeared for the respondent-company. This court, after hearing counsel for the petitioner-company and having perused the petition and the documents enclosed thereto held, in its order dated April 11, 2011, that the material brought on record established that the respondent-company became indebted to the petitioner-company to a tune of Rs. 81,86,349 as on the date of filing of the petition and, despite service of statutory notice, it did not liquidate the liability. This court further held that the petitioner-company had made out a prima facie case for admission of the company petition, and in these circumstances directed, that the company petition be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred the dispute to the arbitrator instead of filing the company petition ; the petitioner was claiming the amount based on the said agreement ; in view of the arbitration clause, the company petition has to be dismissed in limine ; the parties ought to be directed to resolve the dispute through the arbitrator to be appointed by this court ; and the petitioner appears to have filed the company petition only to harass the respondent- company. 5. Sri B.V. Subbaiah, learned counsel for the applicant, would place a copy of the arbitration application filed by the respondent-company before this court seeking appointment of an arbitrator to decide the disputes between the parties (the petitioner and respondent-company). Learned counsel would also place certain documents for this court's perusal. These are (1) the certificate issued by the director and CEO of the petitioner-company dated August 24, 2011, stating that the respondent-company was due a sum of Rs. 33,35,865 and they had no further claim in any form or in any manner over and above the said amount ; (2) a comparative statement of the annual returns of the company to show that the respondent-company is commercially solve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pool their status or their personality. The personality of the members has little to do with the persona of the incorporated company. The persona that comes into being is not the aggregate of the personae either in law or in metaphor. The corporation really has no physical existence it is a mere "abstraction of law" State Trading Corpn. of India Ltd. v. CTO [1963] 33 Comp. Cas. 1057 (SC). While there may well have been a transfer of shares, and a change in the management, the respondent-company a distinct legal entity continues to remain in existence. As what was sought in the company petition is the winding up of the respondent-company, a change in its shareholding pattern or of its management is of no consequence. The inter se disputes between the erstwhile and the present management cannot be a ground to refuse admission of a winding up petition, where the respondent-company is deemed to be unable to pay its debts. 8. Even if the amount claimed in the statutory notice is higher than the admitted amount, as long as the admitted amount exceeds the minimum amount stipulated under section 434(1)(a) of the Companies Act, and despite service of a statutory notice, the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Karnataka [1993] Supp 4 SCC 595. If the court commits a mistake which prejudices a party, the court has the inherent power to recall its order Benoy Krishna Mukherjee v. Mohanlal Goenka AIR 1950 Cal. 287, Gajanand Sha v. Dayanand Thakur AIR 1943 Pat. 127, Krishna Kumar v. Jawand Singh AIR 1947 Nag. 236, Devendra Nath Sarkar v. Ram Rachpal Singh AIR 1926 Oudh 315, Saiyed Mohd. Raza v. Ram Saroop AIR 1929 Oudh 385 (FB), Bankey Behari Lal v. Abdul Rahman AIR 1932 Oudh 63, Lekshmi Amma Chacki Amma v. Mammen Mammen AIR 1956 Trav-Coch 87 and Indian Bank v. Satyam Fibres (India) (P.) Ltd. [1998] 92 Comp. Cas. 149. It is only if the earlier order suffers from such an error as to necessitate its being recalled and corrected would this court be required to recall the order. Despite service of notice, the respondent-company chose not to appear. Even during the hearing of the present applications, the applicant-company (the respondent in the company petition) does not deny its liability to pay Rs. 33,35,865 to the petitioner. All that they contend is that the company is solvent, and there is a remedy of arbitration provided under the contract. Both these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The order of winding up can be passed on any of the grounds mentioned in section 433 of the Companies Act. It does not appear to be the intention of the Legislature that such a power can be conferred on an arbitrator. The petition for winding up cannot be treated as one for recovery of an amount of debt from the company William Jacks Co. (India) Ltd. v. Saraswati Industrial Syndicate Ltd. [1986] 59 Comp. Cas. 876 (Punj. Har.) and Hind Mercantile Corpn. (P.) Ltd. v. J.H. Rayner Co. Ltd. [1971] 41 Comp. Cas. 548 (Mad.). 11. The jurisdiction of the company court will not be taken away by the mere existence of an arbitration clause Maruti Ltd. v. B.G. Shirke Co. (P.) Ltd. [1981] 51 Comp. Cas. 11 (Punj. Har.) and Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [1999] 97 Comp. Cas. 683/22 SCL 156 (SC). The claim in a petition for winding up is not for money. The petition filed under the Companies Act would be of the effect that the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under the Companies Act and is conferred on the court. An arbitrator, notwithstandin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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