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1974 Supreme(Del) 54

High Court Of Delhi
SAROJ MAIRA - Appellant
Versus
STEELSONS PRIVATE LIMITED - Respondent
Company 86 of 1974
Decided On : 03/06/1974

Advocates Appeared:
G.R.CHOPRA, SATISH CHANDRA AGRAWAL, T.B.LAL

The legal representatives of a deceased petitioner can continue the proceedings in a winding-up petition under Sections 397 and 398 of the Companies Act, 1956, and a succession certificate is not necessary before they can be impleaded.

Headnote:

COMPANY LAW - WINDING UP PETITION - ABATEMENT - LEGAL REPRESENTATIVES OF DECEASED PETITIONER - SUBSTITUTION - COMPETENCY - INDIAN SUCCESSION ACT, 1925, SECTION 306 - COMPANIES ACT, 1956, SECTIONS 397, 398, 433 - ORDER I, RULE 10(2), ORDER XXII, RULES 2, 3 - CODE OF CIVIL PROCEDURE.

Fact of the Case:

A winding-up petition was filed under Sections 397 and 398 of the Companies Act, 1956, by two petitioners. During the pendency of the petition, the first petitioner died, and the second petitioner withdrew from the proceedings. The legal representatives of the deceased petitioner filed an application for substitution as parties to the petition.

Finding of the Court:

The court held that the legal representatives of the deceased petitioner could be impleaded as parties to the petition and allowed the substitution. The court found that there was no reported case of a petition under Section 397 or 398 of the Companies Act having abated, and that such a petition might fail on account of there being none to prosecute it, but if a party appeared before the Court and was willing to prosecute the same, the only question which would remain to be seen would be whether the person concerned was competent to prosecute the same.

Issues: 1. Whether the legal representatives of a deceased petitioner can continue the proceedings in a winding-up petition under Sections 397 and 398 of the Companies Act, 1956? 2. Whether a succession certificate is necessary before the legal representatives can be impleaded?

Ratio Decidendi: 1. The court held that the legal representatives of the deceased petitioner could continue the proceedings in the winding-up petition, as the right of action in respect of the petition survived to them under Section 306 of the Indian Succession Act, 1925. 2. The court held that a succession certificate was not necessary before the legal representatives could be impleaded, as the petition was not a claim against a debtor, and the prohibitory part of Section 214 of the Indian Succession Act, 1925, was restricted to debts alone and not to claims mentioned in Section 370.

Final Decision: The court allowed the application for substitution of the legal representatives of the deceased petitioner as parties to the winding-up petition.

D. K. KAPUR, J. , (Oral)

( 1 ) THIS is an application under Order I, Rule 10 (2) read with Order 22, Rules 2 and 3 and Section 151 of the Code of Ciyil Procedure instituted by the legal heirs of Shri R. N. Maira in respect of a Company Petition No. 42 of 1973, which has been instituted in this Court by Shri R. N. Maira and another against M/s. Steelsons (P) Limited and others. The said Company Petition was before this Court when Shri R. N. Maira, the first petitionerp died and the second petitioner therein, Shri Jitender Nath Maira, decided at he would not prosecute the petition any further. On 17th September, 1973, no one appeared on behalf of the petitioners. Mr. G. R. Chopra, counsel for the respondent, stated that the first petitioner had died and the petition was incomplete and, therefore, should be consigned to the record room. I ordered accordingly. Later on, on the same date Mr. Satish Chandra stated that the petition could go on even in the absence of the legal representatives of the first petitioner and I indicated that he might apply under Section 151 of the Code of Civil Procedure and I also made it clear that the petition had not been disposed of. Later, the petition was listed on 1st February, 1974. On that date again, I observed that the petition should be consigned back to the record room as there was no petitioner before the Court. Now, the legal representatives of the first petitioner have moved the present application for the purpose of being impleaded as parties to the case. This application has been contested by the respondents and another application has also been moved on behalf of the respondents, which is C. A. No. 136 of 1974, in order to urge further grounds in support of the opposition.

( 2 ) THE first question for consideration is what is the procedure to be applied in a case like the present one when the petitioner dies. I am staling this because the second petitioner has in any case decided not to prosecute the petition. The procedure prescribed for suits is set out in Order 22 of the Code of Civil Procedure. There is no particular procedure prescribed for other petitions. A petition like the present one, instituted under Section 397 and 398 of the Companies Act, 1956, is in the same position as a petition for winding up. In fact, the alternate prayer of the petition is that the company should be wound up. I therefore, find that the position of the petition on the death of the first petitioner and the withdrawal of the second petitioner is exactly that of an ordinary winding up petition. It is provided in Rule 101 and Rule 102 of the Company (Court) Rules that I even if the petitioner withdraw, a party can be substituted as a petitioner in an ordinary winding up petition. There is, however, no Rule governing the case of a petitioner dying. In fact, neither the 192 applicant nor the counsel for the respondents has been able to bring any case to my notice in which a petition under Section 397 or 398 has abated nor have they been able to bring any case to my notice in which a winding up petition has abated. I am, therefore, of the view that there is no reported case in The Law Reports of any case under Section 397 or 398 of the Companies Act having abated nor has any winding up petition abated. Such a petition might fail on account of there being none to prosecute it. But, if a party appears before the Court and is willing to prosecute the same, the only question which would remain to be seen would be whether the person concerned is competent to prosecute the same. For example, if a petitioning creditor in a winding up petition, based on non-payment of debts, dies, his legal heirs may very well claim to prosecute the same winding up petition on the ground that they inherited the claim of the deceased creditor. Similarly, another creditor might apply for substitution but he would not have to be a creditor. The" mam question to be considered in this case arises on account of the peculiarity in the pre










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