MADHUBAN PRIVATE LIMITED Vs. NARAIN DASS GOKAL CHAND

JUDGEMENT

(1.) This appeal undersection 483 of the Companes Act, 1956 by the appellant company, 13 directed against the order dated April, 1, 1970 of the learaed Additional District Judge, Delhi, whereby he ordered it to be wound up.

(2.) The appellant-company was incorporated under the Companies Act, 1913. in or about the year 1954 with its registered office in the Film Colony, Chandni Chowk, Delhi. The principal objects for which the company was incorporated were, inter alia the carrving on of the business of the Management of Theatres, palaces, halls cinematographic shows and exhibitions The authorised capital of the company was rupees one lakh, divided into 8000 ordinary shares of Rs. 10.00 each and 200 preference shares of Rs 100.00 each Its subscribed and issued capital was Rs. 32 700/ ,while its paid up capital was about Rs. 24,000.00 only. It had 15 members out of which seven were its directors.

(3.) The respondent obtained a decree dated 4th December, 1957 against the appellant-company for a sum of Rs. 2,640.00 from the court of Sub-Judge, 1st Class, Delhi. The appellant company, it is alleged, had closed its business since the beginning of 1958 and was not able to pay the decretal amount despite service of notice on it by the respondent for that purpose. Even the landlord is alleged to have obtained a decree against the appellant for its eviction and for recovery of arrears of rent. The company had not held even a meeting of its share holders, nor had it submitted any returns to the Registrar of Joint Stock Companies, nor had it filed any balance sheet with him. This had resulted in the prosecution of its directors. The appellant company, it was asserted, could not pay its debts and its substratum had gone. Its assets were said to consist of few films, which were hardly wroth any value. It was under the ecircurnstancsthat ther spoadent prayed that it was Just, equitable and convenient to wind up the appellant-company, more especially as it was not carrying on any business of its own. It was said to be having no income and was not commercially solvent. It had run into losses and was not in a position to raise any further capita). For these reasons, the respondent prayed for its winding up. After the filing of the petition on June 4, 1959. the counsel for the respondent made a statement in court on August 7, 1959 to the effect that the Court of the District judge had no jurisdiction to hear the petition in view of the Central Government's notificition dated May 29, 1959, issued under sub-section (2) of section 10 of the Companies Act, 1956 ; and that the same be returned to him for presentation to the proper court. The learned District Judge ordered accordingly. Before the petition could be actually returned, the respondent made another applicaton on August 20, 1959, under section 151, Civil Procedure, Code praying that the petition be retained on the file of the court, for taking further proceedings thereon, as the notification on the basis of which the earlier statement had been made by the counsel in court, was published in the official Gazette dated June 6, 1959 and was, therefore, effective from the slid date. As the winding up petition had been presented in court before June 6,1959. the said notification taking away the jurisdiction of the District Court was not attracted. The court of the District Judge under the circumstances alone had Jurisdiction to entertain the said petition. On this, the learned District called for the file and finding that the petition had originally been presented in his court on June 4, 1959, ordered its retention on the file of that court. The petition was admitted and notice of the same was issued to the appellant company. It was also advertised in the local official gazette, in the Hindustan Times and in the Indian Express. The appellant-company then filed a written statement wherein it was contended as a preliminary objection that the court had no jurisdiction to try the petition. It was alleged that the petition should be deemed to have been filed on August 20, 1959, when the application under section 151, Civil Procedure Code, as aforesaid, was filed. The order returning the petition under Order 7 Rule 10, Civil Procedure Code, had not been set aside ; and the application filed on August 20., 1959 should be taken as the second petition filed at a time when the court of the District Judge had admittedly no jurisdiction to entertain the same. It was stated that even the original petition filed on June 4, 1959 could not be entertained by the court of the District Judge as the notification dated May 29, 1959 saved only such petitions (if it could save any) as were pending in the court on that date. As the said petition was not pending in the court of the said District Judge on May 29, 1959, it was not saved. The petition otherwise was resisted on merits The company was alleged to be commercially solvent and the existence of normal commercial debts was alleged not to imply that the company was unable to pay the same. It was also stated that the respondent was a firm different from the one which obtained a decree against the appellant-company as in the meanwhile on account of the death of certain partners, the constitution of the said firm had changed. It was prayed, under the circumstances, that the petition be dismissed with costs The learned District Judge, dealing with the question of his jurisdiction came to the conclusion that the notification dated May 29, 1959 having been published in the official Gazette dated June 6, 1959, came into effect on that date and as the winding up petition as presented on June 4, 1959, it was pending on the date of the enforcemeat of the notification. It could, therefore, be entertained by that court, as the notification did not divest the court of the District Judge of the jurisdiction to decide the petition The respondent filed an appeal in the High Court against the said judgment of the learned District Judge, but: the same was withdrawn On this, the High Court on September 19, 1968, passed an order dimissing the appeal, leaving the parties to bear their own costs.