2012 (6) TMI 149 - HC - Companies Law

Court allows service of notice on advocates in pending proceedings without judge's summons

The court ruled that in pending proceedings, if parties are represented by advocates, service of notice for applications can be made on the advocates ... Whether in a pending proceedings before the company court if any application is filed, does it require to be accompanied by a judge's summons as per rule 11(b) of the Companies (Court) Rules, 1959 and whether summons will have to be issued afresh to all the respondents/opponents on such application/s though respondent/s being same and having appeared, represented and contesting the proceedings – Held that:- in a situation where in a pending proceedings, the parties are served and were unrepresented and any application or IA is made seeking additional prayer or further orders against those persons, then notice has to go to those persons necessarily as otherwise it would be in violation of the principles of natural justice and no order can be passed behind their back or without hearing them. In such a situation, it would be incumbent upon the registry to insist on the applicant to furnish the requisite number of applications/affidavits along with the judge's summons and pre-paid registered post for issuing summons/notices on such application to those parties who had been served and had remained unrepresented, since any order that may be passed on such application is likely to affect them. Issuance of notice of the application/s by post or otherwise on those respondents, who are already represented and contesting the matter in a pending proceedings would not arise since they are already on record and represented by learned advocates and carrying out such an exercise would lead to prolonging the proceedings and results in delay and this is not the intention of the Legislature. The Registry is directed to comply with these directions henceforth Issues Involved:1. Requirement of judge's summons for applications filed in pending proceedings.2. Service of notice for interlocutory applications in ongoing cases.3. Applicability of procedural rules under the Companies (Court) Rules, 1959, and the Code of Civil Procedure, 1908.4. Legislative competence of High Courts to formulate procedural rules.Issue-wise Detailed Analysis:1. Requirement of Judge's Summons for Applications Filed in Pending Proceedings:The primary issue was whether applications filed in pending proceedings before the company court need to be accompanied by a judge's summons as per rule 11(b) of the Companies (Court) Rules, 1959. The court examined the procedural mandate under rule 11(b), which states, 'All other applications under the Act or under these rules shall be made by a judge's summons, returnable to the Judge sitting in court or in Chambers as hereinafter provided.' This rule necessitates that any application should be accompanied by a judge's summons to ensure that all affected parties receive notice of the application.2. Service of Notice for Interlocutory Applications in Ongoing Cases:The court addressed the requirement of serving notice for interlocutory applications in ongoing cases. Rule 19 of the Companies (Court) Rules, 1959, specifies the form and service of judge's summons, stating, 'The summons, together with a copy of the affidavit, shall be served upon every person against whom an order is sought and such other person as the Judge may direct, in person or by prepaid registered post, or upon his advocate, where he appears by advocate, or in such other manner as the judge may direct.' The court emphasized that service on the advocate representing the party suffices if the party is already represented, thus avoiding unnecessary delays.3. Applicability of Procedural Rules under the Companies (Court) Rules, 1959, and the Code of Civil Procedure, 1908:The judgment highlighted the consistency required between the Companies (Court) Rules, 1959, and the Code of Civil Procedure, 1908, as mandated by section 643(1) and (2) of the Companies Act, 1956. The court noted that these rules are procedural and aim to ensure effective administration of justice. It was clarified that procedural rules under the Companies Act are supplementary to the Code of Civil Procedure and not a substitution.4. Legislative Competence of High Courts to Formulate Procedural Rules:The court affirmed the legislative competence of High Courts to formulate procedural rules under section 122 of the Code of Civil Procedure. This competence was upheld by the Supreme Court in cases such as Virendra Kumar Saklecha v. Jagjiwan and Aboobacker Babu Haji v. Edakkode Pathummakutty Umma. The Karnataka High Court had formulated specific rules, including the High Court of Karnataka Rules, 1959, and the Karnataka Civil Rules of Practice, 1967, which govern the procedure for interlocutory applications and service of notice.Conclusion:The court concluded that in pending proceedings, if parties are already represented by advocates, service of notice for applications or interlocutory applications can be made on the advocates, and there is no need for repeated issuance of judge's summons. This approach prevents unnecessary delays and adheres to the principles of natural justice. The registry was directed to follow these guidelines henceforth. The service of notice in the present case was deemed complete and sufficient, and the matter was scheduled for further hearing.