High Court Of Delhi
RABINDER NATH MAIRA - Appellant
Versus
STEEL SONS PRIVATE LIMITED,DELHI - Respondent
Company 86 of 1974
Decided On : 03/06/1974
COMPANY PETITION - SUBSTITUTION OF LEGAL REPRESENTATIVES - PROCEDURE - APPLICABILITY OF ORDER 22, RULES 2 AND 3 OF THE CODE OF CIVIL PROCEDURE - SECTION 306 OF THE INDIAN SUCCESSION ACT, 1925 - SECTION 214 OF THE INDIAN SUCCESSION ACT, 1925 - SECTION 370 OF THE INDIAN SUCCESSION ACT, 1925 - SECTION 212 OF THE INDIAN SUCCESSION ACT, 1925 - SECTION 213 OF THE INDIAN SUCCESSION ACT, 1925 - COMPANIES ACT, 1956 - SECTIONS 397, 398 AND 433 - COMPANY (COURT) RULES - RULES 101 AND 102 - WINDING UP PETITION - ABATEMENT - COMPETENCY OF LEGAL REPRESENTATIVES TO CONTINUE PROCEEDINGS - SUCCESSION CERTIFICATE - NECESSITY.
Fact of the Case:
The first petitioner in a company petition under Sections 397 and 398 of the Companies Act, 1956 died during the pendency of the petition. The second petitioner withdrew from the petition. The legal representatives of the deceased petitioner filed an application for substitution as parties to the petition.
Finding of the Court:
1. The legal representatives of the deceased petitioner are competent to succeed to the estate of the deceased and to prosecute any claim that he might have in Law against any one else. 2. The original petition will not become more competent by the applicants being impleaded. It will only mean that the question of competency will be decided after due trial. 3. A succession certificate is not necessary before the legal representatives can be impleaded as legal representatives. 4. The petition is not disposed of and that the case was only consigned to the record room as there was no petitioner before the Court.
Issues: 1. Whether the legal representatives of the deceased petitioner can be impleaded as parties to the petition. 2. Whether a succession certificate is necessary before the legal representatives can be impleaded as legal representatives.
Ratio Decidendi: 1. Section 306 of the Indian Succession Act, 1925 provides that all demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease, survive to and against his executors or administrators. 2. The legal representatives of the deceased petitioner are entitled to succeed to the estate of the deceased and to prosecute any claim that he might have in Law against any one else. 3. Section 214 of the Indian Succession Act, 1925 prohibits the passing of a decree in favour of a heir to a deceased person against a debtor of that person unless he has first obtained a succession certificate. 4. The prohibitory part of Section 214 is restricted to debts alone and not to claims mentioned in Section 370 of the Indian Succession Act, 1925. 5. A succession certificate is not necessary before the legal representatives can be impleaded as legal representatives.
Final Decision: The application for substitution of the legal representatives of the deceased petitioner is allowed.
( 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 Civil 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 petitioner died and the second petitioner therein, Shri Jitender Nath Maira, decided that 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 respoadent stated that the first petitioner had died and the petition was incomplete and, therefore, should be consigned to the reord 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 urgj further grounds in support of the opposition.
( 2 ) THE first question for consideration is what is the procedure to b applied in a case like the present one when the petitioner dies. 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 even if the petitioners 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 applicant nor the couns "or the respondents has been able to bring any case tomy notice in whicha petition under Section 397 or 398 has abated nor ha/e they been able to bring any case to my notice in which a winding us 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 main question to be considered in this case arises on account of the pecularity in the present case, which is tha
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