2012 (12) TMI 1250 - HC - Companies Law

Summary

Issues:
Application for recalling winding-up order.

Analysis:
The judgment pertains to an application seeking to recall a winding-up order passed against a respondent-company. The applicant contended that the Director of the Company was unavailable for six months, resulting in non-receipt of court papers and inability to respond to notices. The applicant sought to recall the order based on the principle of "sufficient cause" for non-appearance, citing the G.P. SRIVASTAVA case. The respondent opposed the application, highlighting the repeated notices served on the company and the lack of justifiable reasons for non-appearance. The respondent argued that the discretionary power had been rightly exercised in passing the winding-up order, as per Section 443 of the Companies Act, 1956. The respondent also emphasized the need for a statutory appeal instead of a recall application, referencing relevant case laws such as T. NARAYANAN and OM PRAKASH JAISWAL.

The court observed that the reasons presented by the applicant were not entirely convincing, especially regarding the Director's absence and failure to respond to notices. The court noted the respondent's disregard for court proceedings and emphasized the importance of respecting legal notices. Despite the shortcomings in the applicant's case, the court considered the aspect of complete justice, citing the G.P. SRIVASTAVA case's interpretation of "sufficient cause" for non-appearance. The court highlighted that non-appearance was not deemed mala fide or intentional, and the respondent's actions were not attributed as such. The court acknowledged the potential impact on employees and the company's growth, indicating a consideration beyond mere technicalities.

Ultimately, the court decided to recall the winding-up order, acknowledging the applicant's plea for complete justice despite insufficient reasons. The court ordered the applicant to pay costs to the petitioner's counsel as compensation for the wasted court time. The decision to recall the order was based on the overarching principle of ensuring complete justice, balancing technicalities with equitable considerations in the context of the case.