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TMI Blog2014 (5) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... n this order the Division Bench clarified the final direction contained in paragraph 8 of its earlier order passed on 7th January, 2013 in Company Appeal No. 19/2009. In the order passed on the review petition it was clarified that the objection against the order passed by the learned Company Judge on 16.2.2009 was to the rolled-up procedure adopted by him in discussing the merits of the case and the direction for winding up without advertising the proceedings. It was further clarified that the Division Bench did not comment upon or decide the merits of the observations of the learned Single Judge which "undoubtedly point to the fact that the winding up petition needed to be admitted". In this view of the matter, the only modification directed by the Division Bench to its earlier order was to clarify that the judgment dated 16.2.2009 of the Company Judge "to the extent it records findings - prima facie observations warranting admission of the petition would stand". The allegation in the present application filed by the respondent-company that the petitioner No.1 made a false statement in the affidavit that he did not sign the board resolution dated 01.10.1999 regarding disposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT R.V. Easwar, J.: Co. Appl. Nos. 2159-2160/2013 One M K Mahajan and another person filed CP No.136 of 2005 seeking winding up of the respondent-company. On 16.2.2009 the learned Company Judge passed an elaborate order. Paragraphs 45 and 46 of the said order are as follows : 45. In view of the law discussed above and by carefully analysing the facts and records relied upon by both counsels, I am of the considered view that it is just and equitable to wind up the Company and allow this petition, under Sections 433(e), Section 433(f) 433(c) read with Section 434 and 439 of the Act. 46. I, accordingly, admit this petition and direct that the respondent company be wound up. The official liquidator attached to this Court is appointed as the liquidator in respect of the respondent company. He shall forthwith take over all the assets and records of the respondent company and proceed according to law. Citation shall be published in the 'Statesman' (English) and 'Jansatta' (Hindi) for 16.03.2009. Petitioner may take steps accordingly. 2. Feeling aggrieved by the aforesaid order, the respondent-company filed an appeal to the Divisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Division Bench dated 7.1.2013, the point which persuaded the Court to set aside the earlier Single Judge's order (dated 16.2.009) was the rolled up procedure adopted by him in discussing the merits of the case, not advertising the proceedings, and straightaway directing winding up. The Court did not, however, comment and decide the merits of the observations of the Learned Single Judge which undoubtedly point to the fact that the petition needed to be admitted. In these circumstances, the final direction contained in paragraph-8 is clarified appropriately; it stands modified to the effect that the judgment and order dated 16.02.2009 to the extent it records findings and prima facie observations warranting admission of the petition would stand. No further clarification is required. The said judgment dated 7.1.2013 shall be read in the light of the present clarification. The Review Petition is disposed of in the above terms. 5. Thereafter on 24.5.2013, the learned Company Judge took up for consideration CA 898/2013 filed by the petitioners seeking appointment of the provisional liquidator and publication of the citation. The learned Company Judge issued noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch clarified the final direction contained in paragraph 8 of its earlier order passed on 7th January, 2013 in Company Appeal No. 19/2009. In the order passed on the review petition it was clarified that the objection against the order passed by the learned Company Judge on 16.2.2009 was to the rolled-up procedure adopted by him in discussing the merits of the case and the direction for winding up without advertising the proceedings. It was further clarified that the Division Bench did not comment upon or decide the merits of the observations of the learned Single Judge which undoubtedly point to the fact that the winding up petition needed to be admitted . In this view of the matter, the only modification directed by the Division Bench to its earlier order was to clarify that the judgment dated 16.2.2009 of the Company Judge to the extent it records findings - prima facie observations warranting admission of the petition would stand . The Division Bench was thus quite categorical in holding that the order passed by the learned Company Judge on 16.2.2009 would stand insofar as it admits the winding up petition. The order passed by the Division Bench in the review petition has undi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t instance vide order dated 7th January, 2013, some directions were given. The directions were that the OL will restore possession of the premises at 1-E/2, Jhandewalan Extn., New Delhi-110055 to the respondent along with any books of account and records and thereafter he will stand discharged. It was also directed that the respondent will be responsible thereafter for payment of all the arrears of rent and for settling the claims of the landlord. The direction on which the learned counsel for the respondent-company mainly relies is the one permitting the company to file a further reply to the main company petition within three weeks and the direction to the petitioner to file a rejoinder to the aforesaid reply before the next date of hearing. On the basis of this direction, the learned counsel contends that it cannot be taken that the company petition has been admitted, since the respondent has been given further liberty to file a reply in the main company petition. It is also argued that it is only on the basis of this direction that I had, on 25.10.2013, granted three days' time to the respondent-company to file a short affidavit. The contention is that in the light of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally filed to the company petition. She sought to demonstrate this by comparing the annexures to the additional affidavit with the averments in the counter affidavit/reply filed originally by the respondent-company, in the following manner : Sl.No. Annexure to the additional affidavit Same as annexure to the counter affidavit/reply 1 Annexure R-1 Page 40, Annexure E 2 Annexure R-6 Annexure D 3 Annexure R-2 Annexure R II 4 Annexure R-3 Annexure III 5 Annexure R-4 Order of this Court 6 Annexure R-5 On record in the company appeal (which is annexed to the petitioner's rejoinder in CA 84/2013) 7 Annexure R-7 R-V 8 Annexure R-8 Part of the company petition (dealt with by the learned Company Judge in his order dated 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real brother of the petitioner. It is also claimed that the petitioner is a partner in the said Auditing concern, namely, Mahajan Co., which audited the accounts of the respondent-Company up to 23.02.2003. 8. The respondents also submit that Annexure-F to the petition viz. the acknowledgment of debt of Rs. 9,50,000/-as on 31.03.2004, is a forged document and does not match the letter head of the Company. An affidavit of Mr. Gulshan Gandhi, director of the Company to whom the said acknowledgement is attributed, dated 16.10.2006, has been relied upon, in which Mr. Gandhi has categorically stated that he never signed the document i.e. Annexure-F and that the signature on the said document appears to be forged. The letter head of this document does not match the regular letter head of the Company. 9. Learned Counsels for the respondents also contended that the petitioners have contradicted themselves on several occasions by claiming Rs. 59,06,780/- in the petition (as being outstanding due owed to petitioner No. 1 and his various companies) and later in additional affidavit filed on 30.8.2006, stating that Rs. 7,50,000/- is the outstanding amount, and then again in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, the amount outstanding from the respondent-company was stated to be Rs. 7,50,000/- after giving credit for Rs.2 lakhs paid during the financial year 2002-03, against the original amount of Rs. 9,50,000/-. 12. The learned Company Judge thus held that there is no discrepancy in the amount claimed to be due by the respondent-company. Thus the allegations made on the basis of annexure R-1 to R-8 were effectively dealt with by the learned Company Judge in his order dated 16.2.2009. The appeal against the said order did not challenge these findings, the challenge being limited to the rolled-up procedure followed by the learned Company Judge in admitting the winding up petition, appointing the provisional liquidator and ordering the publication of the citation in an all-in-one order. It is therefore, not permissible or even necessary to look into the additional affidavit filed by the respondent-company pursuant to the order dated 25.10.2013 passed by me. 13. In the appeal before the Division Bench the respondent-company did not question the admission of the winding up petition on merits and therefore the same cannot be questioned now. The order passed by the learned Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y do not foresee any breakthrough in its operations. The income of the company was found to have nose-dived to a dismal figure of Rs. 20,204/- for the year ended 31.3.2006, compared to the income of Rs. 1.78 crores four years earlier. The balance sheets were showing losses year after year without any improvement. It was on the basis of these facts that the learned Company Judge came to the conclusion that the business of the company was discontinued for more than one year and it was therefore to be wound up. 15. It is thus seen from the order of the learned Company Judge passed on 16.2.2009 that all the pleas taken by the respondent-company against the petition were discussed threadbare and prima facie observations were made justifying the admission of the winding up petition. These observations have attained finality in view of the order passed by the Division Bench in the review petition filed by the petitioners. The findings of the learned Company Judge and his prima facie observations on the admission of the company petition were upheld by the Division Bench. It would thus appear that in the additional affidavit filed by the respondent-company on 30.10.2013 along with the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts sought to be introduced now have been considered by the learned Company Judge in the earlier proceedings which resulted in an order of admission passed on 16.2.2009. It is not open to me now to sit on review of the earlier decision on the very same facts and submissions which have all been considered by the learned Company Judge. It is also noticed that in the Punjab High Court judgment (supra) the earlier order of admission was made without giving any opportunity to the company of being heard. This is not the case herein. The petitioners and the respondent-company were heard at length and the learned Company Judge had passed an elaborate order on 16.2.2009 running into 27 pages. The other two judgments cited by Mr Sarat Chandra also seem to be distinguishable. IBA Health (India) (P.) Ltd. v. Info-Drive Systems Sdn. Bhd. [(2010) 10 SCC 553] was a case of a bona fide dispute raised by the respondent-company. The Supreme Court therefore held that advertisement of the petition for winding up will tarnish the image of the company and its reputation and on these grounds reversed the judgment of the High Court admitting the winding up petition. It is not a case of the same Court taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . UOI [2011] 7 SCC 69 that any person who comes to Court and makes allegations should be careful, circumspect and should file a proper affidavit in support of its averments in the petition; he cannot prevaricate and take inconsistent stands because law is not a game of chess . Mr. Sarat Chandra further contended that in an application for the winding-up of a company under the just and equitable clause, the allegations in the petition are of primary importance, having regard to the fact that even the admission of a petition for winding-up, leading to advertisement of the proceedings, is likely to cause immense injury to the company if the petition is ultimately dismissed. He further contends that it is not proper to encourage hasty petitions under the just and equitable clause. These submissions are founded on the judgment of the Supreme Court in Hind Overseas (P.) Ltd. v. Raghunath Prasad Jhunjhunwalla [1976] 46 Comp. Cas. 91. Support is also taken from the judgment of the Supreme Court in Seth Mohan Lal v. Grain Chambers Ltd. AIR 1968 SC 772, in which it was held that where the petition alleges discontinuance of the business of the company and thereby the disappearance of the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company till September, 2001. The truth, however, is that the aforesaid firm gave their resignation letter on 22.03.2003 only. (e) Petitioner No.1 did sign the board resolution on 01.10.1999 regarding disposal of the Nangloi property and also admitted the same before the ROC on 26.05.2005 but falsely stated in the affidavit that he did not sign the board resolution. (f) The petitioner forged the signature of Gulshan Gandhi, one of the Directors, in the certificate containing the acknowledgement of the debt of Rs. 9,50,000/-. The letter-head of the company incorporating the certificate was fabricated and forged. These facts were brought to the attention of this Court by Gulshan Gandhi vide his affidavit dated 16.10.2006. (g) Though petitioner No.1 had stated in the affidavit that he and his associates held 37% shares in the respondent-company, in the disciplinary proceedings before the committee constituted by the ICAI, he stated that he and his family members held 20% of the shares. (h) In the income tax returns filed by the petitioner No. 1 for the financial years 1997-98 to 1999-2000 he has shown income only of a few thousands whereas the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2006 filed by him pursuant to the order passed on 31.07.2006 by this Court. In the aforesaid order this Court directed as under: The petitioners will file an affidavit stating when and how the amount was advanced to the respondent company. It shall be also stated whether the petitioners were the statutory auditors of the company under liquidation at any time. Affidavit along with copy of the income-tax returns of the petitioner for the period ending 31st March, 1998, 31st March, 1999 and 31st March, 2000 be filed within three weeks from today. List on 29th September, 2006. 22. The aforesaid affidavit was filed in Court by the petitioners and the response was filed on 26.09.2006. The respondent-company in its response affidavit dated 26.09.2006 has taken the same pleas which it has taken in C.A. No.2160/2013 (the present application). The following pleas find place in both the affidavit filed by the respondent-company on 26.09.2006 and in the present company application: (a) The petitioner No.1 falsely claimed that he resigned from the respondent-company as a Director on 08.07.1999. (b) The petitioner No. 1 could not explain as to how he cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - to the petitioner No.1 as on 31.03.2000, the learned Company Judge has taken note of the allegation of the respondent-company, noted in para 8 of the order, that the certificate said to have been issued by Mr. Gulshan Gandhi on behalf of the respondent-company acknowledging the debt of Rs. 9,50,000/- as on 31.03.2004 is a forged document and does not match the letter head of the company. There is no finding that the acknowledgement certificate was a forged document and it need hardly be stated that the learned Company Judge would not have admitted the winding-up petition if he was convinced that the winding-up petition was, inter alia, founded on a forged document. The learned Company Judge has also dealt with the claim of the respondent-company that there are contradictions in the amount of the claim made by the petitioners. After examining the relevant accounts, including the income tax returns filed by the petitioners, the learned Company Judge held that the explanation furnished by the petitioner for the discrepancy is satisfactory; the learned Company Judge has also accepted the breakup of the claim of Rs. 59,06,780/- made in the winding-up petition. In paragraph 15, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flected in the order dated 17.10.2011 passed by the disciplinary committee of the ICAI is inconsequential and does not seem to have affected the outcome of the winding-up proceedings nor is it of much relevance to those proceedings. 26. In the aforesaid conspectus of the facts and in my perception it seems to me that the present application filed under Order XIX, Rule 2 of the CPC read with Rule 9 of the CCR, 1959 is an afterthought and has been filed only to prolong or delay the proceedings relating to the winding-up. No case has been made out by the respondent-company as to why the Court should exercise the discretion in its favour. I have considerable doubt regarding the bona fide of the respondent-company in filing the present application in C.A. No. 2160/2013. It has made the same or substantially the same allegations which it made in the winding-up proceedings resulting in the admission order passed on 16.02.2009. No such pleas or allegations were made in the appeal filed against the admission order dated 16.02.2009 which appeal in any case was only against the rolled up procedure followed by the learned Company Judge, and which did not question the admission order on meri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just and equitable clause and on the ground that the business of the company remained discontinued for more than a year, that Mr. Anil Kaushal, the managing director of the company had even written to the official liquidator on 15.04.2009 that the business of the company has come to a standstill, that the substratum of the company had disappeared without any scheme for revival, that as per the status report No. 84/2013 submitted by the OL the statement of affairs filed by the company was defective and remained to be corrected and that in these circumstances, this Court should pass orders appointing a provisional liquidator and directing publication of the citation. In support of these submissions, Ms. Mahajan had relied strongly on the following authorities: (i) Darshan Anilkumar Patel v. Geetaneel Hotels (P.) Ltd. [1994] 81 Comp. Cas. 805 (Bom.); (ii) Bharti Telecom Ltd. v. Altos India Ltd. [2000] 24 SCL 227 (Punj. Har.); (iii) Brunton Co. Engg. Ltd., In re [1988] 63 Comp. Cas. 299 (Ker.). 30. These submissions were countered by Mr. Sarat Chandra, learned counsel for the respondent-company who submitted that it was open to him even then to argue th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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