Presumption of death and authority to institute winding up proceedings under the Companies Court Rules

A winding up petition raised issues of authority to institute proceedings where the petitioning creditor had allegedly not been heard of for more than seven years. The text discusses the presumption of death under section 108 of the Indian Evidence Act, 1872, and states that once that foundational fact is established, the burden shifts to the constituted attorney to prove the principal was alive when the petition was filed. It also notes that verification requirements under Rule 21 of the Companies (Court) Rules, 1959 go to the validity of institution, and that later substitution of heirs could not cure a defect relating to the commencement of the proceedings.

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Issues: Whether the winding up petition and the orders passed thereon were invalid because the petitioning creditor's alleged constituted attorney failed to prove that the principal was alive at the time of institution, in the light of the presumption of death under section 108 of the Indian Evidence Act, 1872 and the requirements for verification under Rule 21 of the Companies (Court) Rules, 1959.

Analysis: The appellant asserted that the petitioning creditor had not been heard of for more than seven years, attracting the statutory presumption of death and shifting the burden to the person asserting that he was alive. The Court accepted that once this foundational fact was raised and supported, section 108 of the Indian Evidence Act, 1872 applied, and the burden shifted to the constituted attorney to establish that the principal was alive when the winding up petition was filed. The Court rejected the contention that later substitution of heirs could cure the defect, holding that the question went to the very authority to institute the proceeding and that the presumption, in the facts of the case, related back to the commencement of the proceedings.

Conclusion: The winding up petition was not shown to have been validly instituted on behalf of the petitioning creditor, and the orders admitting and acting upon it could not stand.

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