9911796707
TMI Blog2003 (4) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... pany with all powers under the Companies Act, 1956. The Court issued notice on 25-11-2002 returnable on 17-12-2002. Before that date the petitioner caused an advertisement in newspapers, Sandesh (Surat and Ahmedabad editions) and Gujarat Samachar (Surat and Ahmedabad editions) on 14-12-2002. Having learnt about the said advertisement the respondent company filed Company Application No. 407 of 2002 for the prayer : "To dismiss the above mentioned winding up petition of the petitioners therein, Satellite Television Asian Region Ltd., for the abuse of the process of the Court by publishing a premature advertisement of winding up in various newspapers without the direction thereof by the Company Court." It is also prayed in the Company Application that : "To award exemplary costs for the said abuse of the process of this Hon'ble Court." 2. Mr. Soparkar, the learned Counsel appearing with the learned advocate for the respondent-company in the Company Petition, which is the applicant in the Company Application submitted that as he has raised a preliminary objection about the abuse of process of Court, he has first 'right of audience'. The Senior Advocate was heard at length. He invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary directions as warranted in the facts of the case. He further submitted that in fact that is why the Legislature has placed all these stages in a sequence and the learned Judge has to apply his mind at every stage. Even after admitting a petition and fixing its date of hearing, the learned Judge has to consider as to whether the respondent-company be given a notice before giving directions for the advertisement. The learned Counsel submitted that if that was not so, the latter part of the rule, namely : ". . .The Judge may, if he thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition." would not have been so worded. He further submitted that it is not a necessary corollary of 'admission' of a petition that advertisement must follow. In a given case, in given facts and circumstances, the Judge may think that instead of causing publication of an advertisement, the company be given a notice before advertisement. The learned Counsel submitted that it is in view of the aforesaid legal position that the action of the petitioning creditor of publishing the advertisement without there being any direction for the same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistrar of the Companies Court, who appoints the time and place at which the petition is to be heard. After a petition has been presented, the petitioner or his solicitor must, on a day to be appointed by the Registrar, not less than five days before the day appointed for the hearing of the petition, file a certificate of compliance with the rules relating to service and advertisement of the petition. The law has been stated to be that unless the Court otherwise directs, every petition is to be advertised in the Gazette not less than seven clear days (excluding Saturdays, Sundays and public holidays) after it has been served on the company and not less than seven clear days before the day fixed for the hearing." The difference in procedure has to be noticed that the petition is required to be served on the company and advertisement by public notice is to wait until seven days excluding holidays after service on the company. The purpose for retaining this hiatus is that before notice is advertised the company has an opportunity to prevent the advertisement of the petition which may immensely cause injustice to the company particularly if it is a going concern. The following passag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on inasmuch as it gives the number of the Company Petition which is filed before this Court. He submitted that therefore, the petitioning creditor could not be heard of saying that the said advertisement was caused by the petitioning creditors only with a view to make the members of public aware of their claim against the company so that future multiple proceedings can be avoided. 8. The learned Counsel for the company relied upon the judgment of Chancery Division (Companies Court) reported in [1996] 1 BCLC (Butterworths Company Law Cases) 501 (sic.). The learned Counsel submitted that in this case even telephone calls made by the petitioning party to the local office of the Inland Revenue saying that she intended to have the company wound up, was considered to be an advertisement. On that ground the party was non suited. The learned Counsel invited attention of the Court to the following para of the judgment. "Advertisement in the case of contributories' petitions. There was no dispute between the parties that the communication of the intention to present the petition or the fact of its existence to BCS, the bank and the Inland Revenue constituted 'advertisement'......." The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indulgence, however, it has been my practice during this term to accept premature advertisement where it has taken place less than seven clear days after service on the company and the company has not appeared to take the point." The Counsel submitted that while in India Rule 96 takes care of the aforesaid object. He emphatically submitted that in India advertisement is not a necessary corollary to filing of the petition as it is the case in England. He submitted that in India advertisement has to be caused only after there is a specific order of the Court to that effect. He submitted that without going into desirability of the position of law in England and in India he restricted his submissions that in the present case the petitioning creditors have caused an advertisement and have thus, resorted to abuse of process of the Court and therefore, holding that the petitioning creditors are guilty of grave abuse of process of Court, the petition should be dismissed on this short ground. 10. The learned Counsel appearing with Mr. Soni submitted that, (i) the present application is not maintainable, (ii) the correct, true, admitted facts stated in the advertisement do not constitute, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon to place its case on merits. In that view of the matter the submissions are rejected. The learned Counsel placed reliance on the decision of the Bombay High Court in the matter of S. Kantilal & Co. (P.) Ltd. v. Rajaram Bandekar (Sirigao) Mines (P.) Ltd. [1993] 76 Comp. Cas. 800 . The counsel placed reliance on the following Head Note : "When a company fails to comply with a notice under section 443(1)(a) for payment of a debt, the court has no discretion but to make a winding up order. The sub-clause does not merely lay down a presumption of inability to pay, but the word 'shall' is of great significance and the creditor is entitled to a winding up order ex debito justitiae. In such a matter a creditor is not required to establish that the company is commercially insolvent, and the fact that the creditor has an alternative means of filing a suit to recover the debt is irrelevant." (p. 801) 11. The learned Counsel also relied upon the following observations made by the learned Judge in the said decision : ".....According to him, the company is now making various attempts to wriggle out of the situation by all sorts of ways and for that matter whatever has been urged today is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued. Therefore, it remains to be an act of advertisement amounting to an act of abuse of process of the court. Therefore, this submission is also not accepted. The learned Counsel also submitted that the advertisement which was caused cannot be said to be an advertisement under the Company law and therefore, it should not be held to have constituted an act of abuse of process of court. The learned Counsel Mr. Soparkar invited attention of the Court to the advertisement wherein the number of the Company Petition is mentioned and it is also stated that the petition is filed in the High Court of Gujarat seeking orders of winding up. That being so, only because of the format is different or at variance, it cannot be said that it is not an act of advertisement. Therefore, this contention is also rejected. 15. The learned Counsel did try to distinguish the aforesaid three decisions relied upon by the learned advocate for the company, but is not successful. 16. The learned Counsel also submitted that the Court should take into consideration the events subsequent to filing of the affidavit in reply in the Company Application as stated in para 3 therein in view of the discussion hereinabo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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