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2001 Supreme(Raj) 1309
Rajasthan High Court
Honble RAJESH BALIA & HARBANS LAL, JJ.
Takshila Hospital Ltd. - Appellant
Versus
Dr. Jagmohan Mathur - Respondents
D.B. Civil Special Appeal No.68 & 69 of 2001
Decided On : December 14, 2001
Rajendra Mehta, for Takshila Hospital Dinesh Maheshwari, for Dr.Jagmohan Mathur M.S.Singhvi, for Sh.Kishan Singh Deora B.P. Mathur, for Respondent
Headnote:Companies Act, 1956, Sec. 433(f) – Winding up of a company – Allegation of malpractices and misdeed – Petitioners are shareholders – Company judge gave option to move application u/Sec.397 before the Company Law Board – Justification of continuing two proceedings at the instance of the same petitioner simultaneously – Held – On making application u/Sec.397 by the same petitioner, the winding up petition filed by him, which has not even been admitted, ought not to be proceeded further particularly when the company judge himself opined that such remedy may be proceeded in first instance which is likely to be fruitful and save the company from being wound-up. (Paras 28 to 31)
On making application under s.397 of the Act by the same petitioner, the winding up petition filed by him,which has not even been admitted, ought not to be proceeded further particularly when the learned Company Judge himself has opined that such remedy may be proceeded in first instance which is likely to be fruitful and save the Company from being wound up. It may be noticed in this connection that ordinarily the, smooth running of business is likely to be jeopardised even if the petition for winding up is admitted and notices are published. This is also to be noticed that against the order passed by the Company Law Board, the aggrieved party has right to appeal on any finding that may be recorded by the Board and order made by it. The Company Law Board before making any order under Sec.397 has to form its own opinion, which must be uninfluenced by any other opinion expressed by anybody else on the necessary facts on which the exercise of jurisdiction by it depends. In these circumstances, it must be held that formation of its satisfaction cannot relate to satisfaction reached by someone else or to read the observation made by the learned Company Judge binding on him nor any of the parties can press in service finding recorded by the learned Company Judge as a matter of precedent. They otherwise remain to be a prima facie finding of the learned company Judge for the purpose of examining merit of the petition. Once the Petitioners have availed the alternative option those findings cannot be carried any further and no useful purpose would now be served to complicate the issue about the right of appeal that may be required to be invoked by any of the respective parties so that their right of a fair opportunity of being heard and convincing they, company Law Board on the merits of their respective cases independent to the previous proceedings remain unaffected. (Para 30)
(2). By the order under appeals, the learned Company Judge opining that case for winding up of the company is made out by the petitioners who are contributory shareholders as stated in S.433[f] of the Companies Act, 1956 (for short, ``the Act) but he has thought it fit that it is more appropriate that instead of ordering winding up alternative remedy Act be invoked. He therefore did not admit the petition, and for this purpose an option was given to the petitioners to move an application under s.397 of the Act within six weeks before the Company Law Board, which has jurisdiction under Sec. 397 to consider such applications in the first instance. Appeal against such order as may be passed lies to this Court. With this order, the company petition for winding up of the company petition was kept pending without admitting. In this event company petition was to be proceeded further, in case the petitioners were not to make an application before Company Law Board under Sec.397.
(3). Aggrieved with the order of learned Company Judge, recording finding against the Company in definite terms without even admitting the petition and inviting the objections and before hearing the objections if any, that may be, raised after the same is admitted, these appeals could be made, if after admitting the petition, the notice of petition were to be published. Findings on merit were also challenged.
(4). The petitioners had exercised such option by making an application under Sec. 397 before the CLB which is pending consideration.
(5). At the outset, it was contended by the petitioners that under the very scheme of Companies Act, the two proceedings at the instance of the same petitioners one u/Sec. 397 and other under Sec. 433 cannot continue since the petitioner has in fact moved an application under Sec. 397 of the Act by exercising option given by the Court.
(6). These appeals have been filed by the appellants inter alia on the ground that once the application under S.397 of the Act is directed to be moved and in fact it has been moved, this winding up petition cannot be proceeded further and the winding up petition ought to have been dismissed. That the findings recorded by the learned Company Judge results in predecision by the appellate forum and denude it of authority to come to its own finding as it is bound under Sec. 397 before making any order. Such finding even if expressed can have no binding force on the Company Law Board, for the purpose of entertaining and deciding the application of the petitioner under s.397 of the Act. In this connection, attention has been invited to S.443(2) read with S.434(f) and 397 of the Act.
(7). We are of the opinion that the basic principle ingrained in Ss.443[2] and 397 are the same viz. to stave up off the winding up of a company as far as possible which is to be resorted to only as a last course. All efforts are to be made for saving the company from being wound up. If the shareholders approach the Company Law Board then the Company Law Board has to form its own opinion that a case is made out for which the company could be wound up an just and equitable ground but it is not desirable to wind up the company. So also, where the Company Judge in the winding up petition comes to the conclusion that he is satisfied that for the petitioner alternative remedy is available and the petitioner is acting in reasonable manner, winding up petitions should be dismissed.
(8). If seen in that light, it is apparent that the direction given by the learned Company Judge inheres that while giving option to the petitioner and not admittin
