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2012 Supreme(Del) 2359
DELHI HIGH COURT
Indermeet Kaur, J.
Sai Air Conditionong - Appellant
Versus
Videocon International Ltd & Anr. - Resopndent
CM(M) 80/2010 & CM No.18840/2011, CM(M) 848/2010 & CM No.18831/2011
Decided On : 31-01-2012
Through: Mr. Prag Chawla, Adv., Through: Mr. M.L. Sharma, Adv.
The main legal point established is that the amalgamation of companies under a court-sanctioned scheme results in the transferor company losing its existence, and timely applications for impleadment are crucial.
Headnote:
Code of Civil Procedure - Amalgamation of Companies - Order VI Rule 17, Order IX Rule 13, Order 22 Rule 10 - [Code of Civil Procedure, Order VI Rule 17, Order IX Rule 13, Order 22 Rule 10] - The court discussed the implications of amalgamation of companies under a court-sanctioned scheme and its effect on the existence of the transferor company. It highlighted the requirement for timely applications for impleadment and the dismissal of belated applications under Order VI Rule 17 of the Code. The court also emphasized the need for applications to be evaluated in the factual context of the case and specified that amendments under Order VI Rule 17 are for determining real questions in the dispute or controversy between the parties.
Fact of the Case:
A suit for recovery was decreed ex parte against M/s Videocon International. M/s Videocon Industries sought to set aside the decree, claiming amalgamation with M/s Videocon International. Their application under Order IX Rule 13 was dismissed, and no appeal was filed. Subsequently, they sought impleadment under Order VI Rule 17, which was declined due to delay.
Finding of the Court:
The court found that the application for impleadment under Order VI Rule 17 was belated and without explanation for the delay. It emphasized that the amalgamation of companies results in the transferor company losing its existence and highlighted the need for timely applications for impleadment.
Issues: The issues revolved around the effect of amalgamation on the existence of the transferor company, the timeliness of applications for impleadment, and the dismissal of belated applications under Order VI Rule 17.
Ratio Decidendi: The court held that once a company amalgamates with another under a court-sanctioned scheme, the transferor company loses its existence. It emphasized the need for timely applications for impleadment and the dismissal of belated applications under Order VI Rule 17.
Final Decision: The court dismissed the petitions, affirming the dismissal of the application for impleadment under Order VI Rule 17 and the allowance of the application seeking to avoid warrants of attachment at the address of M/s Videocon Industries.
Indermeet Kaur, J.
1. Two orders have been impugned before this Court vide two separate petitions; first order is dated 13.10.2009 and the second order is dated 29.3.2010. Vide order dated 13.10.2009 the application filed by the decree holder under Order VI Rule 17 of the Code of Civil Procedure (hereinafter referred to as the Code) (in the course of the execution proceedings) to bring on record M/s Videocon Industries Ltd. as the judgment debtor had been declined. Vide the second impugned order the application filed by M/s Videocon Industries Ltd. seeking a direction from the executing court not to issue warrants of attachment at the address of M/s Videocon Industries Ltd. had been allowed. Both these orders are the subject matter of the present two petitions.
2. The record shows that a suit had been filed by M/s Shri Sai Air Conditioning against M/s Videocon International. This suit was a suit for recovery which was decreed ex parte on 15.5.2007 as none had appeared on behalf of the defendant. An application under Order IX Rule 13 of the Code had been filed on 02.7.2007 by M/s Videocon Industries seeking setting aside of this ex parte decree dated 15.5.2007. Contention in this application was that M/s Videocon International has since been amalgamated with M/s Videocon Industries Ltd. w.e.f. 07.12.2005; M/s Videocon International has lost its character as a separate company having amalgamated in the M/s Videocon Industries Ltd. and as such no suit could have been filed or was maintainable against M/s Videocon International which was a non-existent company on the date of the filing of the suit (suit filed in 2006); further the fact of this amalgamation was well known to the plaintiff as a public notice had been effected pursuant to which this scheme has been sanctioned; contention being that no summons had been served upon M/s Videocon Industries Ltd; ex parte decree had come to the knowledge of M/s Videocon Industries only when the Chairman of M/s Videocon International informed them which was much later. The decree had been obtained by fraud. Accordingly the prayer made in the application was that the said ex parte decree dated 15.5.2007 be set aside.
3. The application under Order IX Rule 13 of the Code was dismissed on 03.9.2007. Contention of the applicant therein that M/s Videocon Industries Ltd. and M/s Videocon International Ltd. are two separate entities was noted. Court was of the view that M/s Videocon Industries has no locus standi to move the present application as the ex parte decree had been passed against M/s Videocon International Ltd. This application was dismissed on 03.9.2007; this order has since attained a finality. No appeal has been filed against the said order.
4. Vehement arguments have been addressed on behalf of the petitioner/plaintiff; his contention is that the factum of the amalgamation of the two companies was brought to the knowledge of the plaintiff only at the time when an application under Order IX Rule 13 of the Code had been filed by M/s Videocon Industries which was in 2007; this factum was never in the knowledge of the plaintiff and as such the contention that the decree has been obtained by the plaintiff against a non-existent company is an illegality. Further contention being that it was in these circumstances that the plaintiff/decree holder had moved an application under Order 6 Rule 17 of the Code seeking impleadment of M/s Videocon Industries as a necessary party but this has been erroneously declined.
5. It is not in dispute that the ex parte decree had been obtained against M/s Videocon International Ltd. and not M/s Videocon Industries; even presuming that this came to be known to the decree holder/plaintiff only on 02.7.2007 (when the application under Order IX Rule 17 of the Code was filed), nothing prevented the decree holder/plaintiff at that time to move an appropriate application seeking impleadment of M/s Videocon Industries Ltd; that was not done; the application u
