1966 (10) TMI 78 - HC - Companies Law

High Court grants relief in appeal against winding-up order for Bangeswari Cotton Mills Ltd.

The High Court issued a winding-up order for Bangeswari Cotton Mills Ltd. The applicant's delay in requisitioning the order led to a contention of the ... Winding up – Appeals from orders Issues Involved:1. Winding-up order of Bangeswari Cotton Mills Ltd.2. Application for certified copy of the judgment and order.3. Delay in requisition for drawing up the order.4. Appeal barred by limitation.5. Exclusion of time under Section 12 of the Limitation Act, 1963.6. Interpretation of 'time requisite' in Section 12(2) of the Limitation Act.7. Application of Companies (Court) Rules, 1959.8. Granting of interim injunction.Issue-wise Detailed Analysis:1. Winding-up Order of Bangeswari Cotton Mills Ltd.:The High Court of Calcutta issued a winding-up order for Bangeswari Cotton Mills Ltd. on June 24, 1966, under the Companies Act, following an application by the petitioning creditor.2. Application for Certified Copy of the Judgment and Order:The applicant's court clerk applied for a certified copy of the judgment and order on June 25, 1966, but did not requisition for the completion of the order, mistakenly believing the petitioning creditor's solicitor had done so.3. Delay in Requisition for Drawing up the Order:The applicant's new solicitor filed a requisition for drawing up the order on August 10, 1966, after learning no requisition had been made. The applicant also sought leave to file the memorandum of appeal without the certified copy of the order, condonation of delay, and other reliefs.4. Appeal Barred by Limitation:The petitioning creditor contended the appeal was barred by limitation, arguing that sufficient cause for not filing the appeal within the prescribed period was not demonstrated.5. Exclusion of Time under Section 12 of the Limitation Act, 1963:The applicant argued that under Section 12(2) of the Limitation Act, the time taken by the court to prepare the order and grant the certified copy should be excluded from the limitation period. The petitioning creditor countered that the failure to requisition the order rendered the application for a copy infructuous, thus disqualifying the applicant from exclusion of time under Section 12(2).6. Interpretation of 'Time Requisite' in Section 12(2) of the Limitation Act:The court examined precedents, including Pramatha Nath Roy v. Lee and J.N. Surty v. T.S. Chetlyar, which established that 'time requisite' excludes periods of delay attributable to the appellant's lack of diligence. The court concluded that the time taken by the court to prepare the decree or order, after an application for a copy has been made, should be excluded, but not the period consumed by the party's failure to requisition the order.7. Application of Companies (Court) Rules, 1959:The court considered Rule 111(1) of the Companies (Court) Rules, which mandates the Registrar to draw up a winding-up order as soon as possible. However, Rule 6 of the Companies (Court) Rules saves the practice and procedure of the court, requiring a requisition for drawing up the order. The court found no inconsistency between the Companies Act and the court's practice, necessitating a proper requisition for the order.8. Granting of Interim Injunction:The court granted an interim injunction restraining the respondent from enforcing the winding-up order, conditional upon the applicant furnishing security for six lakhs within three months. The applicant was allowed to conduct day-to-day business but not to encumber company properties. The appeal hearing was expedited, and the applicant was directed to file cyclostyled copies of the paper book by January 3, 1967.Conclusion:The court concluded that the applicant was not at fault for the delay in requisitioning the order, as the initial failure was due to the petitioning creditor's inaction. The appeal was not time-barred, and the applicant was entitled to the exclusion of time under Section 12 of the Limitation Act. The court granted the interim injunction with specific conditions and expedited the appeal hearing.