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2007 DIGILAW 1628 (BOM)

Airfrreight Limited v. Pharmaceutical Products

2007-11-22

A.M.KHANWILKAR

body2007
JUDGMENT 1. This petition has been lodged as back as on 15th July 1998. However, the same is still pending for admission. That is presumably on account of order dated 23rd July 1998 adjourning the matter sine die on the ground that the company was before BIFR. Registry has been informed that the company has already come out of BIFR. In that sense, the matter will have to proceed. However, it appears that a formal order of acceptance of petition has not been passed so far. 2. The office places the company petitions for acceptance before the Court after its institution on the assumption that that procedure is required to be followed in terms of Rule 97 of the Companies (Court) Rules, 1959, as mentioned by the Company Registrar. He further submits that that procedure is required also on account of Section 439(8) of the Companies Act. Section 439(8) of the Companies Act reads thus :- "S.439 : Provisions as to applications for winding up :- (1) ... ... (2) ... ... (3) ... ... (4) ... ... (5) ... ... (6) ... ... (7) ... ... (8) Before a petition for winding up a company presented by a contingent or prospective creditor is admitted, the leave of the Court shall be obtained for the admission of the petition and such leave shall not be granted (a) unless, in the opinion of the Court, there is a prima facie case for winding up the company; and (b) until such security for costs has been given as the Court thinks reasonable." Rule 97 of the Companies (Court) Rules, 1959 reads thus :- "Rule 97 :- Petition by a contingent or prospective creditor :- A petition for the winding-up of a company presented by a contingent or prospective creditor shall be accompanied by an application under section 439(8) for the leave of the Court for the admission of the petition. No advertisement of the petition shall be made unless the leave has been granted, or, where the leave has been granted subject to any conditions precedent to the admission of the petition, unless such conditions have been satisfied." In addition to Rule 97, it may be useful to refer to Rule 96 of the Companies (Court) Rules which reads thus:- "Rule 96 :- 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." 3. On conjoint reading of these provisions it appears that the requirement of Law is that before admission and consequent advertisement of the company petition, leave of the Company Court is required to be obtained, and which leave can be granted, inter alia, if the Court is convinced that prima facie case for winding up of the company is made out. In my opinion, these provisions do not require that the matter should be placed before the Court in the first instance for acceptance before examining the merits of the case for admission and/or directing advertisement thereof. The necessity of placing the matter for acceptance is only to indicate the returnable date on which the matter will proceed for admission. That is a ministerial work which can be carried out even by the Registry. In other words, on institution and registration of the company petition, the matter is required to be considered by the Court for admission and to grant leave to advertise the petition. Granting of returnable date for admission of the petition after its institution and registration so that the matter would proceed before the Court for admission or for grant of leave to advertise, is a matter which can be left to the Company Registrar, being ministerial work. That will also ensure that the matters do not remain pending in the registry for want of acceptance. That will also ensure that the matters do not remain pending in the registry for want of acceptance. If the Company Registrar is to indicate returnable date for admission of the petition, every matter will have a notified date on which the same will be taken up for admission as soon as it is received and numbered by the registry. 4. In future, the office shall process the matter and assign fixed returnable date on which the matter will come up for admission and/or for grant of leave to advertise before the Company Judge, as soon as the same is instituted and registered. 5. Place this matter for admission on 13th December 2007. The petitioner shall take steps to give intimation to the respondent company in this behalf, if so advised.