TMI Blog2013 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted to recover its dues which amounts have accrued to it under the Awards of the Arbitral Tribunal. The positive averments made by the petitioners in the petition (C.P. No. 200/2011) alleging to be creditors of the company were dully supported by the balance sheet of the company which is an undisputed document. The elaborate submission of the learned senior counsel for the appellant that the petitioners are in fact nothing but stooges of the company thus does not hold water. They had prima facie established themselves as creditors of the company. The last submission urged by the petitioner was based on the principle of res judicata. - Held that :- The object of Section 11 of the Code is to confer finality to a decision arrived at by a competent court between interested parties after a genuine context; once the matter has been determined by such a competent Court neither party can be permitted to re-open it in a subsequent litigation. The plea of the appellant being that the petitioners before the single Judge were nothing but stooges of the company and since the order was binding upon the company, it would operate as a res judicata qua the two petitioners as well has alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the passing of the Award; as such the Award is a nullity. The company having been struck off from the Register of the ROC on 29.12.2006 which fact came to the light and to the knowledge of the appellant much later i.e. sometime in January, 2007. 4. Record further shows that C.P. No. 200/2011 was filed on 20.4.2011 by two petitioners Sidhant Garg and another. This petition under Section 560(6) of the said Act sought restoration of the respondent company in the Register maintained by the ROC. In this petition, it has been averred that the petitioners are creditors of the company and their outstanding salaries amounting to Rs. 6,54,000/- have to be paid to them by the company; to support their submission the balance sheet of the company for the year 2000 had been filed. The company was served and was represented through counsel. The company did not dispute its liability towards the creditors and in fact admitted that as per the last balance sheet of the company an amount of Rs. 10,94,665.21 were the current liabilities of the company which included the dues of the two petitioners. This balance sheet is a part of the record. Company Application No. 2103/2011 had been filed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of a given case even a third party may be permitted to intervene. Submission being that in that case S who was a surety for Jayham's obligations, was permitted to be joined in the restoration application even though he neither fell in the category of a "company", "member" or "creditor". 7. Impugned order shows that the learned single Judge had dealt with all the arguments which have now been propounded before this Court. This was obviously on the presumption that the appellant did have the locus standi to intervene. The test of locus standi laid down in this judgment had been summarized as under: "The question then of course remains as to whether in a particular case a party should be allowed to be joined, and the test appears to be that laid down by Hoffmann LJ in which the refers to the two categories of case. Equally of course the court must then pay some regard to the claim which is put forward by the applicant, that he would be adversely affected by the decision and that he has a case for saying that it would not be just for the company to be restored. I may well be that in most cases a third party would not have any sufficient grounds for resisting the order, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answered by a report of the ROC which in this case was positive and this report of the ROC had in fact been considered while passing an order for the restoration of the company. The second is a prima facie finding by the Court persuading it to believe that it was "just" to restore the company. 10. The judicial precedents on this subject clearly are in favour of the restoration of the company and it is only by way of an exception that the restoration should be disallowed. Normally the rule is to allow the restoration. Exercising discretion against restoration would thus be an exception and not the rule. The court would also be vary of refusing restoration so as to possibly safeguard the interest of one particular class of affected persons. This is a discretionary power and is evident from the use of the word "may" in Section 560(6). A statutory period of 20 years limitation has also been provided in the section for a party to seek restoration. If such a party succeeds the company would be deemed to have been continued in its existence. These observations were quoted with approval by LADDIE J Priceland Ltd., In re [1997]1BCLC 468. "These considerations lead me to the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truck off under the Simplified Exist Scheme and chosen not to exercise its option under Section 3(3) and Section 3(5) of the said Act to enhance its capital to the statutory mandate of Rs.1,00,000/-. Submission being that this order had become final noting that the company shall be deemed to be a defunct company. The same issue could thus not be re-agitated; the rule of constructive res judicata is also applicable. 15. This argument of the learned senior counsel for the appellant is noted only to be rejected. The object of Section 11 of the Code is to confer finality to a decision arrived at by a competent court between interested parties after a genuine context; once the matter has been determined by such a competent Court neither party can be permitted to re-open it in a subsequent litigation. It is based on the principle of giving a finality to a judicial decision. Constructive res judicata is contained in Explanation IV to Section 11 of the Code; it refers to pleas which could have been taken but not actually taken and those not actually taken cannot thus be heard. The plea of the appellant being that the petitioners before the single Judge were nothing but stooges of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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