2004 (3) TMI 445 - HC - Companies Law

Winding up petition dismissed as petitioner failed to prove subject's existence. Appeal allowed, orders reversed.

Parbati Dasgupta Versus Official Liquidator

The court found that Shri Ajoy Dalan did not establish that Lokenath Jeloka was alive at the time of filing the winding up petition. As a result, the ... Winding up - Power of court to stay Issues Involved:1. Validity of the winding up petition filed on behalf of Lokenath Jeloka.2. Presumption of death under Section 108 of the Indian Evidence Act, 1872.3. Authority of Shri Ajoy Dalan to file the winding up petition on behalf of Lokenath Jeloka.4. Impact of the presumption of death on the validity of the proceedings.5. Substitution of legal heirs in the proceedings.Detailed Analysis:1. Validity of the Winding Up Petition:The appellant, a former Director of Solex Fasteners Pvt. Ltd., filed an application under Section 466 of the Companies Act, 1956, seeking a permanent stay of an ex parte winding up order dated 30th January, 2002, and/or recall of the order dated 14th August, 2001, admitting the winding up petition. The main ground for the application was that the petition was affirmed by Shri Ajoy Dalan, allegedly as the constituted Attorney for Lokenath Jeloka, who had been missing since 1989 and was presumed dead under Section 108 of the Indian Evidence Act, 1872. The Company Judge dismissed this application without deciding on the maintainability of the petition itself.2. Presumption of Death under Section 108 of the Indian Evidence Act, 1872:The appellant argued that since Lokenath Jeloka had been unheard of since 1989, there was a mandatory presumption of his civil death under Section 108 of the Indian Evidence Act, 1872. This section shifts the burden of proof to the person affirming that the missing person is alive. Mr. Shome, representing the appellant, cited several cases to support this argument, including Chandi Charan Naskar v. Bhagyadhar Mondal, Mahendra Pratap Singh v. Smt. Padam Kumari Devi, Amar Kaur v. Sadhu Singh, and N. Jayalakshmi Ammal v. R. Gopala Pathar. He emphasized that the burden had shifted to Shri Ajoy Dalan to prove that Lokenath Jeloka was alive at the time of filing the petition.3. Authority of Shri Ajoy Dalan:Mr. Shome argued that a General Power of Attorney was insufficient to authorize Shri Ajoy Dalan to file a winding up petition. He cited the case of Shantilal Khushaldas & Bros. (P.) Ltd. v. Smt. Chandanbala Sughir Shaw, where it was held that a constituted Attorney must be specifically authorized to file a company petition for winding up. The learned Company Judge had overlooked this legal requirement while dismissing the appellant's application.4. Impact of the Presumption of Death on the Validity of the Proceedings:Mr. Mukherjee, representing the respondent, argued that the presumption of death under Section 108 did not fix a date of death but only presumed death after seven years of being unheard of. He cited cases such as N. Prem Ananthi v. Tahsildar Coimbatore and Smt. Mathur v. Smt. Rami to support this. He contended that even if Lokenath Jeloka was presumed dead, his legal heirs could be substituted in the proceedings, and the validity of the petition would not be affected.5. Substitution of Legal Heirs:Mr. Mukherjee further argued that if a person is presumed dead, the date of death would be from the date of adjudication, and legal heirs could be substituted in the proceedings without affecting their validity. He cited Jyotirmoy Nag Chowdhury v. Biswanath Bose and Karuppaswamy v. Sri Ramamurthy to support this argument. However, the court did not accept this contention, stating that the presumption of civil death would date back to the initiation of the proceedings, and it was for Shri Ajoy Dalan to establish that Lokenath Jeloka was alive at the time of filing the winding up petition.Conclusion:The court concluded that Shri Ajoy Dalan failed to prove that Lokenath Jeloka was alive at the time of filing the winding up petition. Consequently, the entire proceedings initiated by Shri Dalan were deemed invalid. The appeal was allowed, the stay application was disposed of, and the orders admitting the winding up petition and directing the winding up of the company were set aside.