Demach Engineers (P) Ltd v. Winny Xavier — 1984 DIGILAW 141 (KER)

ORDER K.S Paripoornan, J. 1. The respondent in the company petition is the applicant herein. This application is filed praying for the grant of the following reliefs: (a) to stay the further proceedings in Company Petition No. 1 of 1983; (b) refusing the advertisement of Company Petition No. 1 of 1983; and (c) to revoke the order of admission of Company Petition No. 1 of 1983 as not maintainable in law. The application is supported by an affidavit, dated 28th February 1983. This is opposed by the petitioner in the Company Petition. 2. Company Petition No. 1 of 1983 was filed by the respondent in this application. The respondent was an employee of the company. Alleging that the company neglected and refused to pay a sum of Rs. 6,109.50 as salary and other dues inspite of repeated demands and that the applicant company is commercially insolvent, Company Petition No. 1 of 1983 was filed praying that the company be wound up under the provisions of the Companies Act. This petition was filed on 21st December 1982. Notice was ordered to the respondent on 27th January 1983. The company entered appearance and filed an affidavit in opposition, dated 28th February 1933. The matter was adjourned from time to time. An affidavit in reply was filed by the petitioner in the Company Petition. When the matter came up for arguments on 20th June 1983, it was adjourned to 30th June 1983. The proceedings recorded read as follows: "It is reported that there is a talk of settlement and Advocates want time. To 30th June 1983". On 30th June 1983 the proceedings recorded is to the following effect: "Counsel for the respondent wants two weeks further time for settlement. Adjourned to 19th July 1983." On 19th July 1983 the proceedings are recorded as follows: "Respondent's advocate requests as a last chance two weeks time for settlement. Adjourned to 18th August 1983." On 18th August 1983 the matter was adjourned for evidence and arguments to 29th August 1983. On the next adjourned date, 26th September 1983, the matter was adjourned to 6th October 1983. Thereafter, the matter stood posted from time to time for evidence, for filing documents etc. 3. This application No. 85 of 1983 is dated 28th February 1983, long before the matter came up for consideration on 20th June 1983. On the next adjourned date, 26th September 1983, the matter was adjourned to 6th October 1983. Thereafter, the matter stood posted from time to time for evidence, for filing documents etc. 3. This application No. 85 of 1983 is dated 28th February 1983, long before the matter came up for consideration on 20th June 1983. After filing the above application praying to revoke the order of admission of the company petition No. 1 of 1983, the matter stood adjourned from time to time on three occasions, 20th June 1983, 30th June 1983 and 19th July 1983. The matter was adjourned specifically for settlement. Even thereafter from 18th August 1983 upto 13th March 1984 the above application (No. 85 of 1983) was not pressed, but the proceedings were adjourned for evidence and for production of documents. 4. Counsel for the applicant company, Mr. M. M. Thomas, argued that this Court has jurisdiction to revoke the order of admission of the company petition No. 1 of 1983 as not maintainable. It is argued that the amount claimed by the petitioner in the company petition is disputed; that the petitioner should establish her claim in court and this petition filed under S.439 of the companies Act is intended to exert pressure on the company by a creditor to realise a debt without recourse to a civil court, and is an abuse of the process of the court and so the petition should be dismissed. Counsel for the respondent in the application the petitioner in the company petition-stressed the fact that she is entitled to the salary and other dues stated in the petition and that the company did not pay the salary because the company is incapable of paying the amount, that the application filed praying amongst others to revoke the admission of company petition No. 1 of 1983, is not maintainable and that at any rate the applicant having represented to court and having obtained adjournments from time to time on the representation, that the matter was to be settled, cannot turn round at this belated stage, with a prayer to revoke the order of admission of the company petition No. 1 of 1983 and for stay of further proceedings like advertisement etc. 5. 5. In George v. Athimattam Rubber Company ( 1964 KLT 1043 ) Justice P. T. Raman Nayar held: "It is well settled that, even after the court has admitted a petition, it can, on being moved for the purpose by the company or some other interested person, stay proceedings and revoke the admission. R.96 of the companies (Court) Rules, which deals with the admission of winding up petitions and directions as to advertisement, recognises this, for, it says that the judge may, if he thinks jit, direct notice to be given to the company before giving directions as to the advertisement of the petition - the hearing to be given to the company is not for the purpose of deciding the manner of the advertisement, but for deciding whether the advertisement should be made at all and the petition proceeded with." The above decision was cited with approval by the Supreme Court in a very recent decision, Cotton Corporation of India Limited v. United Industrial Bank Limited ( 1983 (4) SCC 625 ) (see at page 644). In view of the above, the objections raised by the respondent in the application that the petition is not maintainable is devoid of force. I hold that the petition filed to revoke the order of admission of the company petition is maintainable. Even so, the further question is, whether on the facts of this case, the applicant company is entitled to urge the said plea and at this stage. As stated earlier, the applicant company filed its affidavit in opposition as early as 28th February 1983. The matter was posted for arguments to 20th June 1983. It was adjourned from time to time. On three specific dates, 20th June 1983, 30th June 1983 and 19th July 1983 the hearing of the matter was adjourned on the specific representation that the matter was to be settled. More particularly, the counsel for the applicant company himself got time on that basis when the matter came up for hearing on 30th June 1983 and 19th July 1983. Thereafter, from 18th August 1983, on many days when the matter came up, it was posted for evidence and on none of these occasions the applicant pressed for the grant of the relief prayed for in application No. 85 of 1983. Thereafter, from 18th August 1983, on many days when the matter came up, it was posted for evidence and on none of these occasions the applicant pressed for the grant of the relief prayed for in application No. 85 of 1983. The question is whether by conduct, the applicant is precluded from being permitted to urge the plea prayed for in Application No. 85 of 1983 at this belated stage. R.96 of the company court rules is to the following effect: "Admission of petition and directions as to advertisement:-Upon the filing of the petition it shall be posted before the Judge in chambers for admission of the petition and fixing a date for the hearing thereof and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. The Judge may, If he thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition." The question as to whether the 'admission' once made, should be revoked is a matter of 'discretion' vested in the court. When the petition was admitted and notice was given to the applicant company, the applicant company did file an affidavit in opposition. It opposed the company petition. Application No. 85 of 1983 was filed, to revoke the admission of the petition. It was entitled to do so. It invoked the jurisdiction of this court in the matter. But the company did not pursue the matter. On the other hand, the company represented to this court on more than one occasion that it wanted to settle the matter and prayed for grant of time, on that basis. Time was granted by this court for the purpose of settling the case. The applicant also got the 'advantage' of putting off the matter. But eventually it turned out that the matter could not be or was not settled. So, the case was posted for evidence. Time was granted by this court for the purpose of settling the case. The applicant also got the 'advantage' of putting off the matter. But eventually it turned out that the matter could not be or was not settled. So, the case was posted for evidence. Having represented to court that the matter was to be settled and having obtained adjournments on that basis at least on three occasions, and having not pressed the petition filed to revoke the admission of the company petition at any of the stages till now, I am of the view, that there is considerable laches and want of bona fides in the applicant, when it prays, at this belated stage that the admission of the company petition should be revoked. The applicant is disentitled by its own conduct from urging the plea that the relief prayed for in application No. 85 of 1983 should be afforded. The applicant was not 'earnest' or 'vigilant' in pursuing this application; in effect, it gave up or waived the plea. Having done so, it cannot turn round at this belated stage and make an attempt to revive the plea, which it did make once, and in effect and substance, "abandoned" or "waived" it. I refuse to entertain the plea and refuse to consider Application No. 85 of 1983 on the merits' in view of the conduct of the applicant itself. On this short ground, I dismiss this application.