AI Structured Summary
Not yet generated for this judgment
Judgment
Satish K. Agnihotri, J.
I.A. No. 5
This is an application filed by the opposite party/Respondent for dismissal of the petition at the threshold on the ground that the petition has not been filed in accordance with Form No. 45 and 46 of the Companies (Court) Rules, 1959 (for short ''the Rules, 1959'').
Shri Sharma, learned Counsel appearing for the Petitioner would submit that that though Rule 95 of the Rules, 1959 prescribes for filing application/company petition in Form Nos. 45 and 46, however, as the instant petition contains all the essential ingredients, as required in Form Nos. 45 and 46, thus, it is not fatal and the same may not be dismissed at the threshold.
Shri Sharma would further submit that both the petitions i.e. Company Petition No. 5 and 6 of 2004, were admitted for hearing way back on 12.08.2005 and notices were issued to the Respondent. The Respondent has filed its return also in the month of October, 2005, wherein no objection was raised with regard to filing of the petition in a particular form. After a period of six years, the objection is being raised as preliminary objection to dismiss the petition at the threshold as the same is not filed in the prescribed format i.e. Form No. 45 and 46. In support of his contention, he relies on a decision of the Supreme Court in Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. and Darjeeling Commercial Company Ltd. v. Pandam Tea Company Ltd.
Shri Sharma would next contend that the defect as pointed out by the Respondent is not substantial as could affect the petition. It is a formal defect which should not lead to dismissal of the petition.
The brief facts, as projected by the Petitioner, are that the Petitioner filed the instant application/petition u/s 437 read with Section 433(a) and (f) and Section 434 of the Companies Act, 1956 for winding up of M/s. Albright Steel Industries Ltd. i.e. the Respondent, for non-payment of certain dues to the Petitioner. As aforestated, the application/petitions were admitted on 12.08.2005 and thereafter, return was also filed by the Respondent in the month of October, 2005.
On perusal of the return, it is no where found that the Respondent had raised any objection, more so, preliminary objection seeking dismissal of the application/petition at the threshold.
Part III, Winding-Up of Company under Rules, 1959 deals with winding up petition and its hearing. Rule 95 provides that a petition for winding up of a company shall be in Form No. 45, 46 or 47, as the case may be, with such variations as the circumstances may require and shall be presented in duplicate. Form No. 45 reads as under:
FORM No. 45
[See Rule 95]
[Heading as in Form No. 1]
Company Petition No .... of 19....
... Petitioner Petition for winding-up (General Form)
The petition of (here insert full name, description, occupation and address of Petitioner) showeth:
The address of the Petitioner above named for the service of all notices, processes etc., is that of his advocate Shri.... at....
The company above named, viz....(hereinafter referred to as ''the company'') was incorporated in the month of.... 19...., under the (Companies Act, 1956) as a public (private) company limited by shares/limited by guarantee/as an unlimited company.
The registered office of the company is situate at....
The nominal capital of the company is Rs .... divided into ....shares of.... each. The amount of capital paid up or credited as paid up is Rs (or as the case may be.)
The objects for which the company was established are (here set out the main object) and other objects set forth in the memorandum of association thereof.
7. 8. etc. [Here set out in numbered paragraphs, as may be necessary, the facts on which the Petitioner relies in support of the petition. Where the Petitioner is a contributory, the petition should state whether the conditions in Clause (a) or (b) of Sub-section (4) of Section 439 are satisfied. Where the petition is presented by the Registrar of Companies or by a person authorised by the Central Government, the order of sanction or authorisation of the Central Government should be annexed to the petition. Where the company is already being wound up voluntarily or subject to the supervision of the Court, the facts showing that the voluntary winding up or winding up subject to the supervision of the Court, as the case may be, cannot be continued with due regard to the interests of the creditors or contributories or both, should be set out. After setting out the facts conclude as follows:]
The Petitioner, therefore, prays as follows:
(1) That the .... Co., [Ltd.] be wound up by the Court under the provisions of the Companies Act, 1956, and
(2) Such other order may be made in the premises as shall be just.
Advocate for the Petitioner Petitioner.
[Note: It is intended to serve this petition on ....]
Form 46 deals with petition by creditor which reads as under:
FORM No. 46
[See Rule 95]
[Heading as in Form No. 1]
Company Petition No .... of 19..
.... Petitioner Petition by creditor The petition of [insert full name, description, occupation and address of Petitioner] showeth as follows:
Paras 1 to 5 as in Form No. 45.
The company is indebted to the Petitioner in the sum of Rs .for [state consideration for the debt, with particulars, showing that the debt claimed is due] .*
The Petitioner applied to the company for the payment of his debt by his notice of demand signed and dated ..served on the company at its registered office on.... by registered post [or, set out the manner of service, if it was otherwise than by registered post], but the company has failed and neglected to pay the same or any part thereof.
[If the ground of the petition is that execution or other process issued on a decree or order of any Court in favour of the petitioning creditor was returned unsatisfied in whole or in part, set out the particulars relating to the decree and the execution or other process which has been returned unsatisfied in whole or in part.]
The company is [insolvent and] unable to pay its debts.
[Where the company is being already wound-up voluntarily or subject to the supervision of the Court, set out the facts showing that the voluntary winding. up or winding-up subject to the supervision of the Court cannot be continued with due regard to the interests of the creditors.]
The Petitioner, therefore, prays as follows:
(1) That the ..... Co., [Ltd.] may be wound-up by the Court under the provisions of the Companies Act, 1956, and
(2) Such other order may be made in the premises as shall be just.
Advocate for the Petitioner Petitioner
*Where the Petitioner is an assignee of a debt due by the company, say so, and set out the particulars of the debt, the date of the assignment, whether notice of the assignment was given to the company and if so, the date of such notice.
In the Forms, it is prescribed that details of the company seeking winding up and the details of the Respondent company must be given. Para 3 requires the address of the registered office of the company, para 4 requires the nominal capital of the company, shares and details of shares. Para 5 deals with the objects for which the company was established. Para 6 deals with the details of the debt and para 7 deals with the details of demand of payment of debt by notice. Para 8 requires statement in detail that the company is insolvent or unable to pay its debt. Para 9 is the prayer clause.
I have perused the application/petition filed by the Petitioner. On perusal, it was found that all the details have been given as required under Form No. 45 and 46. Thus, though the petition has not been filed in Form No. 45 read with Form No. 46, however, substantial compliance has been done. Rule 95 of the Rules, 1959 starts with word ''shall'' i.e. a petition for winding up of company shall be in Form No. 45 and 46 or 47, as the case may be. The word ''shall'' may be understood keeping in view the object and intention of the legislature. It appears that the word ''shall'' has been used to ensure that sufficient details are given for proper adjudication. Thus, the word ''shall'' may not be read as mandatory, but discretionary.
The case of Malhotra Steel Syndicate1, relied on by Shri Sharma, is on the point that if there is some defect or irregularity, in the affidavit, the Petitioner should have been given an opportunity to rectify the same.
The facts of the decision of the Supreme Court in Darjeeling Commercial Company Ltd.2, relied on by Shri Sharma, is not relevant at this stage. The same may be considered at the time of final hearing of the petition.
A Constitution Bench of the Supreme Court, in M/s. Sainik Motors, Jodhpur and Ors. v. State of Rajasthan, observed as under:
It is, however, contended that though the section creates an option, the Rules and the notification make the payment compulsory, and attention is drawn to the word "shall" used both in Rules 8 and 8-A and the notification whereas the words in the two provisos to Section 4 are "may accept". The word ''shall'' is ordinarily mandatory, but it is sometimes not so interpreted if the context or the intention otherwise demands. In In re Lord Thurlow Ex Parte Official Receiver Lord Esher, M.R. observed at p. 729 that "the word ''shall'' is not always obligatory. It may be directory", and Lopes, L.J. at p. 731 added:
It is clear that the word ''shall'' is not always used in a mandatory sense. There is abundance of authority to the contrary in cases where it has been held to be directory only.
It was thus that the word "shall" was held to be directory only, in that case, by Coutts Trotter, C.J., in Manikkam Pattar v. Nanchappa Chettiar 1982 Mad WN 441 by Russel, J., in Rustom v. H. Kennedy ILR 26 Bom LR 653 , by Venkatasubba Rao, J., in Firm Jethaji Peraji Vs. Krishnayya and Others, and by the Judicial Committee in Burjore and Bhavani Pershad v. Mussumat Bhagana, 11 Ind App 7 (PC).
Another constitution Bench of the Supreme Court in State of Uttar Pradesh and Ors. v. Babu Ram Upadhyay, held as under:
The relevant rules of interpretation may be briefly stated thus: When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from construing it the one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstance, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow there from, and, above all, whether the object of the legislation will be defeated or furthered.
The above stated proposition of law was reiterated in Ganesh Prasad Sah Kesari and Anr. v. Laxmi Narayan Gupta, that to ascertain the real intention of the legislature by carefully examining the scope of the statute to find out whether the provision is directory or mandatory remains unimpaired even where both the words are used in the same provision.
The object of the Companies Act, 1956 and the Rules 1959 framed there under is to settle the disputes between companies expeditiously, keeping in view the object, it was provided that all the details necessary for adjudication of the dispute should be set out in the pleadings. Thus, Rule 95 of the Rules, 1959 provided for filing of the application in Form Nos. 45 and 46 or Form No. 47, wherein, as aforestated, all the details in respect of the status of the parties, cause of action and other relevant information are required. The application/petition filed by the Petitioner discloses all the relevant information, as required in the aforestated Forms.
In view of the above, I.A. No. 5, for dismissal of the petition on the ground that the petition has not been filed in Form Nos. 45 and 46, is dismissed.
Two weeks time is granted to the Petitioner to file the present company petition in Form Nos. 45 & 46, as scheduled to the Rules, 1959.