Prem Chand Kaushal vs Gauritex Indutries Ltd.

Hemant Gupta, J.—This order shall dispose of an application for recall of the order passed by this Court on 12.8.2010 in CP No. 56 of 2008, whereby the Respondent-Company was ordered to be wound up and the order dated 12.8.2010 passed in CP Nos. 57, 59 and 60 of 2008, dismissing the applications filed by the applicant for setting aside the exparte proceedings.

The above mentioned four petitions were filed to seek winding up of the Respondent-Company on account of its inability to pay the admitted liabilities. Since none has put in appearance on behalf of the company after its service, the petition was ordered to be admitted on 2.7.2009. The factum of admission of notice was ordered to be published in ''Dainik Bhaskar'', ''Indian Express'' (English Edition) and the Official Gazette of the State Government, U.T., Chandigarh. Subsequently, an application was filed for recall of the aforesaid order. But none appeared on behalf of the Respondent-Company to support the aforesaid application, which led to the passing of the order of winding up in CP No. 56 of 2008 and order of dismissal of applications for recall of the exparte order of admission in CP Nos. 57, 59 and 60 of 2008.

The present applications have been filed for recall of the order of winding up dated 12.8.2010 passed in CP No. 56 of 2008 and order of even date dismissing in default the applications seeking setting aside of the exparte order of admission in CP Nos. 57, 59 and 60 of 2008.

It is the case of the applicant that the Counsel engaged by the Company could not appear on the date fixed on account of the fact that he was busy and the Counsel instructed by him did not appear on account of bona-fide mistake. Learned Counsel for the applicants further stated that the claim of the Petitioners in CP No. 56, 57, 59 and 60 of 2008 stands settled in its entirety and that the Company is ready and willing to reimburse the expenses incurred by the Official Liquidator after the order of winding up was passed by this Court.

Ms. Divya Sharma, learned Counsel appearing for the Official Liquidator has filed reply to the applications in Court. In the reply filed, it is averred that the intimation regarding winding up order was received in the office of Official Liquidator on 17.09.2010 and that the satisfaction of the claim of the Petitioner-creditors shall not have any affect on the order of winding up unless claims of all the creditors and workmen are satisfied. It is pleaded that the Company can be revived only if all the conditions envisaged in Section 391 of the Companies Act, 1956 are fulfilled. Ms. Sharma has relied upon the order passed by the Hon''ble Supreme Court in Civil Appeal Nos. 8149-8150 of 2009 - Official Liquidator of Mardia Steel Ltd. v. Rajeev S. Mardia and Ors., decided on 7.12.2009, wherein the Hon''ble Supreme Court has held that the Courts have to be circumspect while considering the revival scheme as many promoters under the revival scheme may seek possession of the assets of the Company.

On the other hand, Shri Alok Jain, learned Counsel for the Petitioners, admits that the claim of above mentioned Petitioners stands settled, but it is asserted that CP No. 73 of 2007 has been dismissed in view of the order of winding up passed by this Court, whereas CP No. 99 of 2005 is fixed for hearing on 11.11.2010. Therefore, the claim of all the creditors has not been settled and that the creditors in these two petitions are entitled to be transposed as the Petitioner to support the order of winding up. Thus, both Ms. Divya Sharma and Shri Alok Jain, oppose recall of the winding up order.

I do not find any merit in the said contention of the learned Counsel. This Court passed the order of winding up for the reason that none has put in appearance on behalf of the Company. As per the averments made in the application, it is apparent that the Company has engaged a Counsel, who was not available on 12.8.2010 and has instructed his Associate Shri Prahlad Bhagat, Advocate, to appear before this Court. Shri Bhagat could not come to the Court due to his personal engagements. The application for recall of the order has been filed on 27.8.2010 i.e. within 15 days of the order of winding up and much before the Official Liquidator has received the information of the winding up order. Since the absence of the Company was on account of mistake, negligence or carelessness of the Advocate, I find that sufficient cause is made out for setting aside the exparte order of admission and for recall of the order of winding up particularly, when the claim of the Petitioner-creditors stands satisfied.

The order in Mardia Steel Ltd.''s case (supra), is not applicable to the facts of the present case as this Court is not considering any revival scheme. The application is for recall of the order of winding up in view of the failure of the Counsel of the Company to appear before this Court. Therefore, I find that there exist sufficient circumstances for recall of the order of winding up dated 12.8.2010 passed in CP No. 56 of 2008 and recall of the order dated 12.8.2010 passed in CP Nos. 57, 59 and 60 of 2008 dismissing in default the application seeking setting aside of exparte admission order. Since the claim of all the creditors stand settled, the petitions seeking winding up of the Respondent-Company are also dismissed as no cause of action survives in the petitions.

The argument of Shri Alok Jain that creditor in CP No. 73 of 2007 is entitled to be transposed as Petitioner in the present petition, is again not tenable. Though the winding up order passed in one petition enures for the benefit of entire class of creditors, but in the present case, the winding up order was passed on account of absence of the Counsel for the Company. The absence of the Counsel for the Company has been found to be for sufficient cause. Therefore, I do not find any justification in transposing the Petitioner-creditor in CP No. 73 of 2007 to support the winding up order. The claim of the said Petitioner shall be considered in accordance with law in the said petition separately. CP No. 99 of 2005 is already fixed for 11.11.2010. The claim of the said creditor shall be considered on the aforesaid date.

In view of the above, the order dated 12.8.2010 passed in CP Nos. 56, 57, 59 and 60 of 2008 is recalled. The petitions are restored to their original number. Since the claim of the Petitioners stand settled, all the petitions are dismissed as infructuous.

The Official Liquidator may communicate the expenses incurred by the Office of Official Liquidator within two weeks. The same shall be paid to the Official Liquidator within two weeks of the receipt of such communication as per the undertaking given by Shri Anand Chhibbar. The Official Liquidator is further directed to hand over the possession of the property of the Company to the Manager of the Company today itself.