LAXMI INVESTMENT CO PVT LTD Vs. TARACHAND HARBILAS

JUDGEMENT

(1.) This petition has been referred to a Division Bench for decision by Mr. Justice Tulzapurkar because the learned Judge entertained some doubt whether he has the power to grant the application made before him. It virtually raised the following question:-

(2.) The circumstances under which Miscellaneous Petition No. 1 of 1966 came to be filed are as follows: The applicant is the liquidator of a company known as the Laxmi Investment Co. Private Ltd. of Akola. He was appointed the liquidator of the company after an order of winding up was passed on 12th February 1962. This company had entered into an agreement with one Tarachand and others to purchase the immoveable property from the said Tarachand and others for a sum of Rs. 60,000 on 23rd January, 1957. The agreement was subsequently modified in December 1957 whereby the company agreed to pay Rs. 25,000 more to the vendors. The vendors did not fulfil their agreement and the company filed a suit (C. S. No. 4 of 1960) for specific performance and damages on the footing of the agreement. The suit was filed on the 26th June, 1960 and was fixed before the Civil Judge, Senior Division, Khamgaon on 22nd February, 1961. On that date the advocate for the plaintiffs reported no instructions and withdrew from the suit in consequence of which the Civil Judge dismissed the suit for default. On 22nd March, 1961 the company made an application No. 28 of 1961 for restoration of the suit to the file under Order IX rule 9 of the Code of Civil Procedure. Before that application could be heard the company was ordered to be wound up and the liquidator was put in charge of the affairs of the company. According to the liquidator, however, he knew nothing of the pendency of the suit or of the application for restoration filed on the 22nd March, 1961. That application (application No. 28 of 1961) for restoration of the suit came up for hearing before the Civil Judge on 19th April 1962 and no one being present on behalf of the company the application was dismissed. The Court did not know that a liquidator had been appointed and the liquidator did not knew that the suit had been filed and dismissed or that the application for the restoration was pending. The present application which under certain circumstances, has come to be renumbered as application No. 1 of 1961, was filed by the liquidator on behalf of the company on the 19th June, 1962 praying that the order of dismissal of the application to set aside the ex parte decree dated 19th April 1962 should be set aside and the miscellaneous application No. 28 of 1961 should be restored to file. The liquidator has alleged that he had no knowledge whatever of the pendency of the suit or of its dismissal for default nor of the fact that an application to restore the suit to the file had been made and was pending on the file of the Civil Judge. He alleged that he came to know of the pendency of the suit and the application only on the 18th June, 1962 from one of the former directors of the company one Amratlal Vyas and thereupon he acted very promptly. He alleges that he sent a telegram to the clerk of the Court of the Civil Judge, Senior Division, Khamgaon informing him that he had learnt about the dismissal of the application for restoration of the said application No. 28 of 1961. This application was filed on behalf of the Liquidator by the said advocate on the 19th June, 1962 and was followed up three days later by an application for condonation of one day's delay in filing the said application for restoration on 22nd June 1962.

(3.) These were the proceedings taken before the Civil Judge Senior Division, Khamgaon, but in view of the Liquidator having been appointed in the meanwhile on 20th March, 1963 the Civil Judge acting under the provisions of section 446(3) of the Companies Act, 1956 transferred the proceedings to the High Court. At that stage the application presented on 19th June, 1962 came to be renumbered in this Court as application No. 1 of 1966. It is that application which came before the learned Single Judge and since the decision in AIR 1923 Bom 386 was relied on behalf of Tarachand and others and since that is a decision of a Division Bench, the learned Judge felt that he should refer the question to a Division Bench for considering the effect of the decision in AIR 1923 Bom 386.