Hon’ble Pankaj Mithal, J.—Re: Civil Misc. Recall Application No. 319680 of 2010

The above application has been filed by Ashok Kumar Sharma, Proprietor, A.K. Builders & Suppliers, Lucknow together with M/s A.K. Builders & Suppliers claiming to be the unsecured creditors of the demerged company M/s Triveni Engineering & Industries Ltd.

2. By the above application they have prayed for the recall of the order dated 9.9.2010 passed by me in Company Application No. 15 of 2010 filed under Section 391/394 of the Companies Act, 1956 for accepting the scheme of arrangement annexed thereto between the aforesaid demerged company and the resultant company Triveni Turbine Limited.

3. The Court on the aforesaid application for acceptance of the scheme of arrangement, vide order dated 9.9.2010 had directed for convening meetings of the equity shareholders, secured and unsecured creditors of the demerged company in respect whereof notices were directed to be issued under certificate of posting and by publication in the two newspapers published from New Delhi and the other from Meerut so as to ascertain their wishes regarding the scheme of arrangement.

4. I have heard Sri Prashant Kumar, learned counsel for the applicants, Sri R.P. Agarwal, learned counsel for the demerged and resulting companies and the official liquidator as representative of Regional Director, North Region, Ministry of Corporate Affairs, NOIDA.

5. The submission of Sri Prashant Kumar is that the applicants have lodged three consecutive caveats in connection with of the filing of the above company application for accepting the scheme of arrangement but none of the above caveats were reported by the office of the Court with the result applicants were denied opportunity of hearing before passing of the order dated 9.9.2010. He has further submitted that the demerged company as well as resulting company had the notice of the lodging of the caveats by the applicants but even then they have not chosen to serve notice/copies of the application before moving the same in the Court. The demerged and resulting companies as such have not approached the Court with clean hands. Accordingly, the order dated 9.9.2010 is liable to be recalled.

6. Sri R.P. Agarwal learned counsel for the demerged and resulting company to counter the above submissions, has argued that under the scheme of the Companies Act 1956 and the Company Court Rules, 1959 (hereinafter referred to as an Act & the Rules respectively, for short) the applicants have no right to be heard at the time of issuing directions for convening meetings and issuing notices as the initial proceedings under Section 391/394 of the Act are to be taken ex parte. The provisions of lodging a caveat existing under Section 148A C.P.C. and under Chapter 22 Rule 5 of the High Court Rules 1952 are not applicable to proceedings of such a nature under the Act. Therefore, the caveat was not even maintainable. If the office has inadvertently failed to report about the caveats of the applicants, no illegality has been committed. It is for this very reason even the demerged and resulting companies have not cared to serve the copy of the application/upon the applicants. The order dated 9.9.2010 causes no prejudice to the applicants even if passed ex parte and as such it is not liable to be recalled. In support he is relied upon a decision of the Supreme Court reported in Chembra Orchard Produce Ltd. and others v. Regional Director of Company Affairs and another, (2009) 147 Comp. Cas. 677.

7. A plain reading of Chapter XXII Rule 5 of the High Court Rules makes it abundantly clear that the same is applicable in connection with filing of writ petitions under Articles 226/227 of the Constitution of India except for writs in nature of Habeas Corpus. The provisions of Chapter XXII of the High Court Rules are not applicable in connection with any other proceedings before the Court much less the proceedings of the nature as contemplated under the Act. Ther