1966 (5) TMI 68 - HC - Companies Law

Winding-up petition dismissed for non-compliance with verification rules. Re-verification request denied.

The court dismissed the winding-up petition application due to non-compliance with verification rules. The petitioner's request for leave to re-verify the ... - Issues:- Verification of winding-up petition not in compliance with rules- Request for leave to re-verify the petitionAnalysis:1. The petitioner filed an application for winding up of a company, alleging non-payment for goods supplied. The company contended that the verification of the petition was not affirmed according to law as it was a declaration made before a notary public, not an affidavit. The court examined the relevant rules under the Companies (Court) Rules, 1959, and the rules of the Court regarding verification of petitions. It was established that an affidavit verifying a petition must be made on a solemn affirmation as prescribed by the rules. The court emphasized that a mere declaration before a notary public does not comply with the rules for verification of a petition, rendering the verification defective.2. The petitioner argued that the defect in the verification was a mere irregularity that could be overlooked, and requested leave to re-verify the petition. The court considered precedents cited by the petitioner regarding defects in verification of pleadings in other contexts. However, the court distinguished those cases from the present petition for winding up a company. It highlighted the significance of proper verification in a winding-up petition, as a winding up order relates back to the date of the petition's presentation. Allowing re-verification could lead to confusion regarding dealings by the company with its assets and potential issues related to fraudulent preference.3. The court further discussed the implications of third parties acquiring rights in the company's assets during the period between the original petition and re-verification. Emphasizing the strict compliance required for verification of a winding-up petition, the court concluded that the principles from cited decisions did not apply to the current case. The court acknowledged the defective verification and the inability to make an order for winding up based on the petition. Consequently, the court declined the request for leave to re-verify the petition, leading to the dismissal of the application with costs.4. In summary, the judgment centered on the non-compliance of the verification of the winding-up petition with the prescribed rules, leading to the dismissal of the application for winding up the company. The court emphasized the importance of strict adherence to verification rules in winding-up petitions due to the significant legal implications and potential confusion that could arise from allowing re-verification. The decision highlighted the unique considerations and consequences associated with winding up proceedings, underscoring the need for procedural compliance in such cases.