2017 (6) TMI 1405 - HC - Companies Law

Court Upholds Winding Up Order: No Grounds to Recall Due to Unraised Issues in Initial Hearing.

M/s. Samshi Pipe Industries Limited & 3 Versus M/s. Parmanand Vijaykumar

The Court dismissed the application for recalling the winding up petition order, determining that the allegations of misleading facts about notice ... Admission of winding up petition under Section 439 read with Sections 433 and 434 of the Companies Act, 1956 - seeking recall of the petition - misleading presentation of facts with regard to the service of notice of the winding up proceedings - legitimacy of the claim of winding up is doubtful - petition has not been preferred through a person who is competent or authorized to do so. HELD THAT:- Notice was issued in the windingup petition by an order dated 19.01.2016, making it returnable on 16.02.2016. This Court permitted direct service in addition to the normal mode of service; therefore, it is clear that two modes of service were permitted by the Court. The first was the normal mode of service through the Bailiff and the second was direct service through the petitioner of that petition, the respondent herein - It is further stated that the notice of the Court has been pasted on the door of the premises in the presence of Gopalbhai Chimanbhai Solanki, the watchman. There is another report dated 11.05.2016 of the Bailiff stating that notice has been pasted on the wall of the premises of the Company in the presence of Gopalbhai Chimanbhai Solanki, the watchman. From both these reports made by the Bailiff, it appears that insofar as the service of notice through the normal mode is concerned, it was effected by affixation on 09.05.2016 and 11.05.2016, which is after the date of the order of admission dated 07.04.2016. However, insofar as the service of notice through direct service is concerned, the record reveals that the said notice was served to applicants Nos. 2 to 4 on 18.02.2016 at 3.30 p.m. and to the applicant No. 1 on 28.01.2016. This has been written on the back side of the notice which was to be taken from this Court by the petitioner in order to effect direct service. The seal of the Company, Samshi Pipe Industries Limited along with its address, is appended on this page. The notices appear to have been accepted by Gopalbhai Solanki, the watchman. The record, therefore, reveals that though notice by the normal mode of service may not have been served before the order of admission dated 07.04.2016 was passed, however, it was served by direct service on 18.02.2016 to applicants Nos. 2 to 4 and on 28.01.2016 on applicant No. 1 - The ground for recall of the said order on the basis of the alleged misleading presentation of facts with regard to the service of notice of the windingup petition, therefore, cannot stand in the face of the record. Learned counsel for the applicants has raised two other grounds, namely, the legitimacy of the claim of windingup and that the person who has filed the windingup petition is not competent or authorized to do so. In the view of this Court, both these grounds cannot be taken at this stage as they could have been pressed into service at the time when the Court was hearing the petition for admission, the notice of which was duly served upon the applicants. Considering the matter from all angles, this Court is of the view that no legitimate grounds have been made out for the recall of the order dated 07.04.2016 - Application rejected. Issues:Recall of winding up petition order based on misleading presentation of facts, legitimacy of winding up claim, competency of the person filing the petition.Analysis:The applicants sought the recall of the winding up petition order, alleging a misleading presentation of facts regarding the service of notice, doubtful legitimacy of the claim, and incompetence of the person filing the petition. The applicants argued that the service of notice was misrepresented, as the affidavit of service was affirmed before the supposed date of service. However, the respondent contended that direct service was indeed carried out on specific dates to all applicants. The Court examined the records, revealing that direct service was completed before the order of admission, contradicting the claim of misleading presentation of facts. The Court clarified a typographical error in an earlier order regarding the date of service, which did not affect the validity of the process.The Court further scrutinized the legitimacy of the winding up claim and the competency of the petitioner. It was established that these grounds could have been raised during the initial petition hearing when the applicants were duly served notice but chose not to participate. Consequently, the Court deemed these grounds unavailable for the recall proceedings. After considering all aspects, the Court concluded that no valid grounds were presented for recalling the order, leading to the dismissal of the application seeking recall.In summary, the Court rejected the application for the recall of the winding up petition order, as the allegations of misleading facts regarding notice service, legitimacy of the claim, and competency of the petitioner were found unsubstantiated. The Court emphasized that the grounds raised by the applicants were not viable at the recall stage, having had the opportunity to address them during the initial petition hearing.