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1998 Supreme(P&H) 966
PUNJAB AND HARYANA HIGH COURT
Swatanter Kumar, J.
M/s Bharti Telecom Ltd. - Appellant
Versus
M/s Altos India Ltd. - Respondent
Revision Application No. 2 of 1998 in Company Petition No. 196 of 1997.
Decided On : 3 August, 1998
For the Appellant :Mr. L.M. Suri, Sr. Advocate with Mr. Deepak Suri, Advocate.
For the Respondents:Mr. Amit Singh with Mr. P.S. Patwalia, Advocates.
The court held that the appointment of a provisional liquidator is a serious step and the Courts would normally avoid provisional Liquidator unless there were compelling circumstances.
Headnote:
COMPANY - WINDING UP - APPOINTMENT OF PROVISIONAL LIQUIDATOR - REVIEW OF ORDER - MAINTAINABILITY - GROUNDS - SECTION 450 OF THE COMPANIES ACT, 1956.
Fact of the Case:
The respondent company filed a review application under rule 9 of the Company Court Rules for recalling of order dated 11.6.1998 passed in C.A. No. 442 of 1997, by which a provisional liquidator was appointed. The company contended that the order was passed without hearing it, that there were no grounds for the appointment of the provisional liquidator, and that the appointment would obstruct its approach to other forums like BIFR.
Finding of the Court:
The court held that the review application was not maintainable as the appeal against the order was pending before the appellate court. However, in view of the clear order of the Hon'ble Division Bench dated 8th of July, 1998, the judicial propriety demands and this Court feels obliged to dispose of the application and all the contentions raised on behalf of the applicant on merits.
Issues: 1. Whether the review application is maintainable? 2. Whether there were grounds for the appointment of the provisional liquidator? 3. Whether the appointment of the provisional liquidator would obstruct the company's approach to other forums like BIFR?
Ratio Decidendi: 1. The court held that the review application was not maintainable as the appeal against the order was pending before the appellate court. However, in view of the clear order of the Hon'ble Division Bench dated 8th of July, 1998, the judicial propriety demands and this Court feels obliged to dispose of the application and all the contentions raised on behalf of the applicant on merits. 2. The court held that there were grounds for the appointment of the provisional liquidator. The company had failed to file a reply to the application for appointment of provisional/official liquidator despite several opportunities. The company's conduct before the court justified the appointment of a provisional liquidator. 3. The court held that the appointment of the provisional liquidator would not obstruct the company's approach to other forums like BIFR. The court directed the provisional liquidator to associate three members from the secured creditors, one representative from the respondent Company for carrying out these directions. The officers shall not be below the rank of Senior Manager/Managing Director/Official Liquidator.
Final Decision: The court dismissed the review application with directions to the provisional liquidator to prepare an inventory of all the movable and immovable property belonging to the respondent Company, prepare complete inventories of the record of the Company, and give copies of any records requested by the respondent Company to enable it to pursue its matters before the competent forum including BIFR. The Committee of the aforestated persons within four weeks from today shall place before the Court (in C.P. No. 196 of 1997) a detailed report. This Committee would suggest whether it is possible to consider and implement any viable or workable scheme by which the Company could revive its business and provide modes of repayment of the secured and unsecured creditors of the Company simultaneously.
Swantanter Kumar, J. - Vide order dated 11.6.1998 passed in C.P. No. 196 of 1997, winding up petition against the respondent-company was admitted and it was directed that notice be published. For the reasons stated in that detailed order vide order of the same date passed in C.A. No. 442 of 1997 a provisional liquidator was appointed by the Court.
2. On an appeal preferred by the Company, the Honble Division Bench of this Court, vide its order dated 18th July, 1998 in C.M. Nos. 29-31 of 1998, the extract of which are relevant for the purpose of disposal of the present application, reads as under :-
"xxx If that is so, we are of the view that an appropriate application should be moved before the Company Judge in that regard that the order dated June 11, 1998 in C.A. No. 142 of 1997 has been passed without hearing the appellant or its counsel.
We are adjourning this appeal to July 13, 1998. However, the pendency of this appeal would not debar the learned company judge to decide any application that may be moved by the appellant."
3. In furtherance to the above quoted order of the Honble Division Bench, the Company filed the present Review Application No. 2 of 1998 under rule 9 of the Company Court Rules for recalling of order dated 11.6.1998 passed in C.A. No. 442 of 1997.
4. The two reasons for recalling of the order dated 11.6.1998 as stated in paragraphs 3 and 5 of the application read as under :-
"3. That during the summer vacation on 11.6.1998, the counsel was informed that the orders in the company petition has been announced. The counsel also came to know that the order in C.A. No. 442 of 1997 has also been passed and apointed the provisional liquidator of the respondent company and also ordered that he shall take over all the assets and complete management of the respondent company without any further delay.
xxx xxx xxx xxx xxx xxx
5. That when the case came up for hearing on 28.5.1998, there was no occasion for the counsel to argue the matter nor C.A. No. 442 of 1997 was argued and even in the order dated 11.6.1998 the management of the company is ordered to be taken over which would frustrate the appellant from approaching the Board for Industrial and Financial Reconstruction for defending the case in the Honble Court."
5. It needs to be noticed here that no relevant and necessary facts were pleaded in this application which could constitute valid and proper grounds for review of the order dated 11.6.1998. The position remained unchanged despite the fact that the case was listed on various dates for hearing. However, subsequently, on 20th July, 1998, an application was filed for placing on record the affidavit and some documents (being C.A. No. 415 and 416 of 1998), which were allowed and the documents were taken on record. The official liquidator has also filed reply thereto by way of affidavit. Thereafter, the matter was heard at some length and judgment in this application was reserved on 28.7.1998.
6. It is settled principle of law that a party seeking review of order or judgment is expected to place on record all the material facts and take up all the grounds which are available to the parties for review of the said order. As already noticed, the application for the review does not give any facts, figures and grounds which could constitute valid grounds for recalling or reviewing the order dated 11.6.1998.
7. Keeping in mind the above circumstances, I would not proceed to discuss the respective contentions raised on behalf of the parties before me.
8. Learned counsel appearing for the applicant/respondent-company has argued that :-
(i) the applicant had no notice and was not heard while the order dated 11.6.1998 in C.A. 442 of No. 1997 was passed.
(ii) Neither any ground/facts existed nor the order dated 11.6.1998 provides any reason which would justify appointment of provisional/official liquidator.
(iii) the appointment of official liquidator if not revoked would obstruct and bring impediments in the way of the
