Case Law Details

Case Name : Kenplus Plastic SDN, BHD Vs SemIndia Systems (P.) Ltd. (Karnataka High Court)
Appeal Number : Co. Application No. 1508 OF 2012
Date of Judgement/Order : 13/12/2012
Related Assessment Year :
Courts : All High Courts (4158) Karnataka High Court (208)

HIGH COURT OF KARNATAKA

Kenplus Plastic SDN, BHD

Versus

SemIndia Systems (P.) Ltd.

L. NARAYANA SWAMY, J.

CO. APPLICATION NO. 1508 OF 2012
CO. Petition No. 103 of 2012

DECEMBER  13, 2012

ORDER

1. By its order dated 19th November, 2012 this Court ordered winding-up of the respondent-company. Before the typing of the order, i.e. the very next day of the passing of the order, a memo was moved with a request to post this matter for “being spoken to”. Accordingly, the matter was posted on the next day and thereafter the learned counsel of the applicant sought further time to file necessary application for recalling the order passed on 19th November 2012. Hence, this application.

2. The reasons assigned in the application, viz., that the Director of the Company by name Pratap Kandamoori was not in station for about six months and consequently, the papers which served by the Registered Post was not handed over to him. Further, papers were lost and could not be traced and under those circumstances, the applicant could not be able to appear before the Court as also respond to the Court notice. The learned counsel appearing for the respondent submitted that since the petitioner has suppressed all these facts, he is not entitled for any relief. It is further submitted that the respondent-company has got a very good case on merits and by allowing this application if they are permitted to file objections, they could place all materials which definitely will disentitle the petitioner from seeking winding up order. In support of this submission, the learned counsel relied on the judgment in the case of G.P. Srivastava v. R.K. Raizada [2000] 3 SCC 54 wherein it has been held that ” Sufficient cause’ for non-appearance under Order 9 Rule 13 of the Code of Civil Procedure must be liberally construed to do the complete justice between the parties.” Hence, it is submitted to recall the winding up order passed on 19th November, 2012.

3. The learned counsel for the petitioner submits to reject this application. It is submitted that the respondent has not stated as to how he is the only person looking after the case pending before this Court. In fact, on three occasions notices were served. Firstly, the legal notice was served on the company; secondly, when the matter was posted for admission, notice was issued and Court notice also was served. After admitting the petition, paper publication was taken out. Hence, on these three occasions though the respondent-company was duly served, he remained absent and in fact it is true that he was waiting for the order; and the moment the winding-up order was passed in the open Court, on the next day itself a memo was filed for posting this matter for “being spoken to”. This only shows the conduct of the respondent-company in not responding to the court notices and also to the statutory notice. It is further submitted that the respondent-company has not stated in the affidavit as to what is the source of information in passing the winding-up order against the respondent. Unless the just and sufficient cause is shown, it is not entitled for seeking recalling of the winding up order; and the discretionary power could not be exercised by this Court. By passing the winding-up order, the Official Liquidator was appointed and hence the Official Liquidator should have been made a party in this application. On this ground also, this application be dismissed is his submission. By referring clause (d) of Section 443 of the Companies Act, 1956, which stipulates that after satisfying the submissions and materials placed before this Court the discretionary power has been exercised, is clearly followed in the instant case and hence the petition before the Court is completely adjudicated by passing the winding-up order and in order to recall the said order, the respondent should file statutory appeal and hence this application for recalling does not survive. In support of this submission, he relied upon the judgment in the case of T. Narayanan v. Official Liquidator High Court, Madras as the Liquidator of Sri Visalakshi Mills (P.) Ltd. (In Liquidation) [2012] 1 MLJ 592 and refers to paragraph 48 of the judgment, wherein it is held that the inherent power of the Court under Rule 9 of the Companies (Court) Rules, 1959, which is analogous to Section 151 of the Code of Civil Procedure, cannot be invoked where express provision has been made for the relief by conferring power upon the authorities. He also referred to the judgment in the case of Om Prakash Jaiswal v. Shekhraj Hotel (P.) Ltd. [2004] 50 SCL 59 (All.) wherein the similar application filed was rejected on the ground that the applicant has not given the source of information about the winding-up proceedings in the application made to recall the order.

4. The application made, for recalling the order dated 19th November, 2012, has failed to convince the Court to the fullest extent. The person sworn-in to the affidavit has stated that he was managing the affairs of the Company and he was in the Country for six months, itself, is not sufficient to recall the winding-up order. First of all, he should have stated as to how only he was responsible to file this affidavit when other Directors were available. Secondly, the legal notices issued have not been responded to and when the Company petition is filed and the Court notice came to be issued, though it was served on the respondent, the same have not been responded to. After the matter came to be admitted and winding-up proceedings was taken up by paper publication, then also he remained silent and that he was legally presumable that he was duly served with notice and has chosen to remain silent, shows the respondent’s disrespect to the Court and legal proceedings. Normally, when a person do not respect to the Court Notice and legal consequence, he shall not be given any premium. Merely stating that he has a very good case on merits, is not sufficient unless a reason is shown to the satisfaction of the Court as to why he remained absent and what is the source of information about the passing of the winding up order. In that view and in view of the facts and circumstances, I hold that the applicant has not stated fullest reasons to the satisfaction of the Court for recalling the order. But, the fact remains whether a complete justice has been done in the instant case. When the petition is filed for winding-up of the respondent-Company, after completing all the requirements, as provided under the law, winding-up order has been passed. But when an application, like the present one, is filed stating that the respondent though was aware could not appear in opposing the winding up, the only thing required to be examined is whether the order of winding-up meets the end of justice or complete justice. In arriving at this, I rely upon the judgment of the Hon’ble Supreme Court in the case of G.P. Srivastava (supra) wherein at paragraph 7 of the judgment it has been held that “under Order 9 Rule 13 of the Code of Civil Procedure, 1908 an ex parte decree passed against the defendant can be set aside upon satisfaction of the Court that either the summons were not duly served upon the defendant or he was prevented by any “sufficient cause” from appearing when the suit called on for hearing. Unless “sufficient cause” is shown for non-appearance of the defendant in the case on the date of hearing, the Court has no power to set aside an exparte decree. The words “was prevented by any sufficient cause from appearing” must be liberally construed to enable the Court to do complete justice between the parties. In a case where the defendant approaches the Court immediately and within the statutory time specified, the discretion is normally exercised in his favour, provided the absence was not mala fide or intentional. For the absence of a party, in the case, the other side can be compensated by adequate costs and the lis decided on merits.” Non-appearance is out of mala fide or intentional is neither attributed nor taken in the objection filed by the petitioner. The non-appearance cannot be construed in the circumstances as mala fide and intentional, since the presumption is that no Company would wait till the winding-up axe falls on its head. It is believed that normally, the Companies, against whom the liquidating proceedings are initiated, would take lots of defence to survive against the order of winding-up. The learned counsel for the applicant submitted that large numbers of employees are depending upon the company and the company itself is a growing company and there is no occasion for defaulting.

5. Considering all these aspects, as observed earlier, though the reasons assigned are not to the fullest satisfaction of the Court, merely the reason to meet the ends of “complete justice” for which the litigants approach this Court, is considered. The applicant approaches this Court with a prayer to recall the order and at his instance the precious time of the Court has been wasted and in order to compensate the same, the order passed on 19th November, 2012, which is un-typed is recalled subject to the applicant paying costs of Rs. 1,00,000/- to the learned counsel for the petitioner. The payment to be made within two weeks from today.

Accordingly, Company Application is allowed.

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