RAMA KRISHNA TOSHNIWAL Vs. MAHALAKSHMI MILLS GO LTD

JUDGEMENT

(1.) THIS petition for the winding up of the Maha Lakshrni Mills Company Limited, Beawar (hereinafter referred to as "the Company"), a public company limited by shares, has been filed on September 30, 1966, alleging that the Company is unable to pay its debts and that on account of mismanagement of its affairs it is just and equitable that it should be wound up. An order was made by this court on October 25, 1966 for the issue of notice and advertisement of the petition. The Company filed a reply disputing the allegations regarding its financial position and mismanagement. A reply was also filed on behalf of the Authorised Controller in which it was pointed out, inter alia, that the Central Government had taken over the management of the Company under sec. 18a of the Industries (Development and Regulation) Act, 1951 hereinafter referred to as "the Act", and had appointed him as the Authorised Controller by notification (Ex. A. l) No. F. l (24) Tax (B)/65 dated January 9, 1967 for a period of 5 years. It was also pointed out that the Government of Rajasthan had issued notification (Ex. A. 2) No. F. l (6)IND (A)/67 dated January 10, 1967 under the Rajasthan Relief Undertaking (Special Provision) Act, 1961 declaring the Company as a relief undertakings for a period of one year from January 10, 1967 and directing that no legal proceeding shall be instituted or commenced or, if pending, shall be proceeded with against the Company for the period during which it remained a relief undertaking. It was therefore urged that the petition for the winding up of the Company could not be proceeded with and may be dismissed. Notification Ex. A. 2 was published in the State Gazette on January 16, 1967 and it is not disputed that the period of the relief granted by the Government of Rajasthan has been extended by two subsequent notifications dated December 13, 1967 and December 17, 1968. The petitioner has filed replies challenging the validity and effectiveness of the notifications.

(2.) I am, at this stage, not required to consider the validity of the notification issued by the Govt. of Rajasthan under the provisions of the Rajasthan Relief Undertaking (Special Provision) Act, 1961 for it has been argued by Mr. Bhargava, learned counsel for the Company, that the petition cannot be proceeded with after the issue of the aforesaid notification Ex. A. 1 u/sec. 18a of the Act because of the provisions of sec. 135 (1) (c ). The learned counsel has supported his argument by reference to Bharat General and Textiles Industries Ltd. vs. Muir Mills Co. Ltd. , (l ). On the other hand, Mr. Gupta, learned counsel for the petitioner, has argued that as the winding up petition had already been filed before the issue of the notification under sec. 18-E of the Act, sec. 18e (A) (c) could not bar the maintainability of that petition which had to be decided on the merits. The learned counsel has tried to support his argument by reference to a judgment of the Madhya Pradesh High Court in In Re Swadeshi Cotton and Flour Limited, Indore (Company petition No. 1 of 1966) decided on April 4, 1966. The learned counsel has also argued that any other view of the matter will give rise to a conflict between the provisions of the Indian Companies Act. 1956 and the Act. He has also argued that as the petitioner had a right to institute the petition at the time when it was filed, the right to proceed with it could not be taken away by any subsequent notification. For this submission the learned counsel has made a reference to Garikapati Veeraya vs. H. Subbiah Choudhary and other (2 ).