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2011 Supreme(Kar) 461
High Court of Karnataka
THE HONOURABLE MR. JUSTICE ARAVIND KUMAR
Official Liquidator of M/s. Murudeshwara Foods and Exports Ltd. (in Liqn.), Bangalore Versus
K. Ananda Shetty, Hubli & Others
Company Application No. 616 of 2006 In Company Petition No. 82 of 2000
Decided on : 21-07-2011
For the Applicant:Deepak, Advocate.
For the Respondent:Satish & Aravind, Advocates.
Headnote:COMPANY (COURT) RULES, 1959 - Rules 11(b) & 19 (1) & (2): [Aravind Kumar, J] Judges summons and service - Pending proceedings before the Company Court - Interlocutory applications - Need for issuing Judgment summons afresh to all the Respondents/Opponents on IA’s if any, when the Respondents are same, represented and contested - Position of law - Held, When an application is filed either invoking provisions of the Companies Act of the Companies (Court) Rules, notice of such application has to be taken out on those persons who have been arrayed as Respondents. For the said purpose, Judges Summons in Form No. 2 is required to be furnished, so that notice of such application is taken out on all those persons who would be affected by any order that may be passed thereon. A perusal of Rule 19 of the Companies (Court) Rules, 1959, would go to show that an application should be accompanied by judges summons. So that is shall be served on all those persons against whom an order is sought to be made. A reading of sub-Rule (2) of Rule 19 would also go to show that Judges summons together with copy of the affidavit filed by an applicant has to be served upon every person against whom an order is sought and it is to be notified by pre-paid Registered Post or upon his advocate where such person is represented by an Advocate or in any other manner. The intention behind the said Rule is to ensure that affected person is heard and principles of Natural Justice is followed. Further, Serice of notice of an Application/Interlocutory Application is required to be served on such person against whom an order is sought for in such Application/Interlocutory Application have already appeared and they are represented by Advocate, question of either issuing notice to the said person/s by pre-paid Registered Post or service of notice on such person/s, through ant other mode is not required, since service of such application or Interlocutory Application can be made on the Learned Advocate representing such party and it would serve the purpose. However, in a situation where in a pending proceedings, the parties are served and were un-represented and any application or Interlocutory Application 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 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 application to furnish requisite number of applications/affidavits along with judges summons and pre-paid Registered post for issuing summons/notices on such application to those parties who had been served and had remained un-represented, since any order that may be passed on such application is likely to affect them.
COMPANY (COURT) RULES, 1959 - Registered post along with Judge’s summons - Eventualities - Held, Furnishing of pre-paid Registered Post alongwith the judges summons would arise under two eventualities viz., (i) where original proceedings has come to an end by order of Company Court; or (ii) where in the original proceedings one of the party has been served and had remained unrepresented and in such a situation if an application is filed and a fresh prayer is made against such a person who had remained unrepresented. Further, Issuance of notice of the applications 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 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.
ORDERS ON C.A.397/2011
1. C.A. 616/2006 is filed on 03.07.2006 under Section 543 of the Companies Act, 1956 read with Rule 260 of the Companies (Court) Rules, 1959 against respondents 1 to 9 to declare that respondents are liable to pay jointly or severally to the Official Liquidator the amounts specified therein with interest thereon. This application has abated against respondents 4 and 5 on account of their death. Recording of evidence before Registrar, CPC has already commenced and on various dates evidence of parties has been recorded and a Court Commissioner was also appointed to record the evidence and at that stage official liquidator has filed C.A.397/2011 seeking incorporation of three prayers by way of amendment to C.A.616/2006 namely to add three (3) prayers. The Registry on such application being filed has raised following objection.
“Non filing of memo of service in C.A.397/2011.”
2. Thereafter official liquidator has filed a memo of service in C.A.397/2011 stating that Judges Summons in C.A.397/2011 sent to respondents 2, 3, 7 and 8 are duly served and notice issued to respondents 4 and 5 is returned with a postal shara as “party deceased”. In respect of polices issued to respondents 1, 6 and 9 neither acknowledgment nor undelivered postal cover has been received by official liquidator. Admittedly respondents 4 and 5 have expired and this court by order dated 12.11.2008 and 27.07.2007 respectively has already held that application C.A.616/2006 filed against respondents 4 and 5 has stood abated and matter has been posted for further orders before this court for furnishing acknowledgments for having served Judges summons on other respondents. It is noticed that respondents 1, 6 and 9 are already represented in C.A.616/2006 by learned counsel M/s. Satish and Aravind who have appeared before this court and as well as before Registrar, CPC.
3. It is contended by learned counsel for official liquidator that all applications filed even in a pending proceedings are to be accompanied by Judges summons as required under Rule 11(b) of the Company (Court) Rules, 1959 and contends that notice to respondents of such application will have to be once again issued to the respondents though they have already appeared and contesting the matter through Advocates.
4. Hence, the question that arises for any consideration is:
“Whether in a pending proceedings before Company Court if any application filed, does it required to be accompanied by a Judges’ 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?”
5. The Company (Court) Rules, 1959 have been formulated by Supreme Court of India after consulting High Courts in exercise of its power under Section 643(1) & (2) (then existing) of the Companies Act, 1956 and same reads as under:
“643. Power of Supreme Court to make rules-(1) The Supreme Court, after consulting the High Courts.-
(a) shall make rules providing for all matters relating to the winding up of companies which, by this Act, are to be prescribed, and may make rules providing for all such matters as may be prescribed, except those reserved to the Central Government by sub-section (5) of section 503, sub-section (3) of section 550, section 552 and subsection (3) of section 555; and
(b) may make rules consistent with the Code of Civil Procedure, 1908 (5 of 1908),-
(i) as to the mode of proceedings to be had for winding up a company in High Courts and in Courts subordinate thereto;
(ii) for the voluntary winding up of companies, whether by members or by creditors;
(iii) for the holding of meetings of creditors and members in connection with proceedings under section 391;
(iv) for giving effect to the provisions of this Act as to the reduction of the capital; and
(v) generally for all applications to
