1 mss CA585 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO. 585 OF 2010 WITH COMPANY APPLICATION NO. 626 OF 2011 IN COMPANY PETITION NO. 347 OF 2004 ADMINISTRATOR OF SPECIFIED UNDERTAKING OF UNIT TRUST OF INDIA .. ORG. PETITIONER AND MAHAKALI FLYOVER CO. LTD. APPLICANT (ORG. RESPONDENT) Vs. THE OFFICIAL LIQUIDATOR OF MAHAKALI FLYOVER CO.LTD. & ORS... RESPONDENTS to Company Application. Mr. M. P. Rao, Senior Counsel a/w Kapil Moye and Vinayak Vengurlekar i/b M/s. Crawford Bayley & Co. for the applicant Mrs. Rupa Sutar, AOL for O.L. Present. Ms. Rajni Iyer, Sr. Counsel a/w Vinita Hombalkar for the original petitioner in CP No. 347 of 2004 CORAM: S.C.DHARMADHIKARI, J. DATED: 25/11/2011 2 mss CA585 P.C. It is stated on behalf of the applicant’s advocate on instructions from the applicant and their advocates that they apologize for filing a praecipe dated 21st November, 2011 suggesting that I should not take up this matter. Having realized the consequences of filing such a praecipe in law it is now stated that the applicants be permitted to withdraw the same and that they have no objection to this application being heard by this court. 2. It is in the light of these statements that have been made after seeking instructions that no action including referring the matter to the Bar Council for disciplinary proceedings is being initiated against the applicants’ advocate, is taken but the applicants’ advocates M/s. Crawford Bayley and Co. and the concerned partner, so also the junior advocate attending the matter are cautioned that hereafter, if their association with the client is such that the required detachment and distance is not maintained and the identification is of a nature that together with the client they are also responsible for interfering with the course of justice then, in addition to disciplinary proceedings being directed to be initiated by the Bar Council against them, this court will initiate proceedings under the Contempt of Courts Act, 1971. It is with immense pain and anguish that I have made 3 mss CA585 these observations in respect of the conduct of the Advocates because the timing of the praecipe is such that it is enough to reach a conclusion that the court’s impartiality is doubted by suggesting that this matter should not be taken up by me. This mater is before me since 20th January, 2011. I have passed certain orders therein. I have accommodated parties as well by granting adjournments for amicable settlement. Against one order of mine an Appeal was preferred but after its disposal as well this Application was before me but no suggestion was given of the nature pointed out in this praecipe. The court has no desire of retaining or holding on to any matter but on the eve of some crucial hearing, if it is suggested that the court should not take a case, because the Presiding Judge had removed from Board an Appeal in relation to the Applicant more than five years back, is nothing but exceeding the brief as an Advocate for a litigant. As an officer of the court, any attempt to tarnish the reputation of the Institution, should be avoided by Advocates and Lawyers. They are first and foremost officers of the court which aspect should not be forgotten by them. In this behalf, a reference can usefully be made to the judgment of the Hon’ble Supreme Court in the case of E. S. Reddi v/s. Chief Secretary of Govt. of A.P. Reported in A.I.R. 1987 SC 1550. About the duties of an Advocate and Senior Advocate, the Hon’ble Court observes thus; 4 mss CA585 “10. By virtue of the pre-eminence which senior counsel enjoy in the profession,they not only carry greater responsibilities but they also act as a model to the junior members of the profession. A senior counsel more or less occupies a position akin to a Queen’s counsel in England next after the Attorney General and the Solicitor General. It is an honour and privilege conferred on advocates of standing and experience by the Chief Justice and the Judges of this Court. They thus become leading counsel and take precedence on all counsel not having that rank. A senior counsel though he cannot draw up pleadings of the party, can nevertheless be engaged to settle i.e. to put the pleadings into proper and satisfactory form” and hence a senior counsel settling pleadings has a more onerous responsibility as otherwise the blame for improper pleadings will be laid at his doors. 11. Lord Reid in Rondel v. Worsley (1967) 3 All ER 993 has succinctly set out the conflicting nature of the duties a counsel has to perform in his own inimitable manner as follows:- “Every counsel has a duty to his client fearlessly to 5 mss CA585 raise every issue,, advance every argument, and ask every question, however, distasteful, which he thinks will help his client’s case. As an officer of the Court concerned in the administration of justice, he has an overriding duty to the Court to the standards of his profession, and to the public, which may and often does lead to a conflict with his client’s wishes or with what the client thinks are his personal interests. Counsel must not mislead the Court, he must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis int he information in his possession, he must not withhold authorities or documents which may tell against his clients but which the law or the standards of his profession require him to produce. By so acting he may well incur the displeasure or worse of his client so that if the case is lost, his client would or might seek legal redress if that were open to him” 12. Against as Lord Denning, M. R. in Rondel v. W. (1966) 3 All ER 657 would say the (the counsel) has time and again to choose between his duty to his client and his duty to the Court. 6 mss CA585 This is a conflict often difficult to resolve; and he should not be under pressure to decide it wrongly. When a barrister or an advocate puts his first duty to the Court, he has nothing to fear’. In the words of Lord Denning; “It is a mistake to suppose that he is the mouthpiece of his client to say what he wants : ........ He must disregard the most specific instructions of his client, if they conflict with his duty to the Court. The code which requires a barrister to do all this is not a code of law. It is a code of honour. If he breaks it, he is offending against the rules of the profession and is subject to its discipline.” 13. We are constrained to give expression to our views with a feeling of remorse to remind the counsel of that sense of detachment and non-identification they are expected to maintain with the causes espoused by them and not with a view to belittle the profession or cast aspersions on counsel.” 3. By consent Company Application (Lodging) No. 626 of 2011 is placed on today’s board for withdrawal. Mr. Rao, learned Senior Counsel appearing on behalf of the applicants in that application seeks leave to 7 mss CA585 withdraw the application with liberty to raise appropriate pleas as raised therein before appropriate forum and in appropriate proceedings. Application is allowed to be withdrawn and dismissed as such with liberty as prayed.. 4. Company Application No. 585 of 2010 is an application by the original respondent praying for recalling the order dated 31st July, 2010 passed in this company petition. The order passed on 21st July, 2010 reads thus; “1. This is an application for winding up the Respondent- company, inter alia on the ground that the company is unable to pay its debts. 2. According to the Petitioner, the Respondent is indebted to the Petitioner in a sum exceeding Rs.15.00 crores as on the date of filing of the petition together with interest. It is not necessary to set out the details of the transactions. Suffice it to state that there is no dispute regarding the indebtedness of the Respondent-company. The Petitioner had, on 17th September, 1999, disbursed Rs.6.00 crores. On 24th September, 1999, the Petitioner disbursed a sum of Rs.3.00 crores. This was 8 mss CA585 towards subscription to 15.50 per cent secured redeemable non-convertible participatory debentures of the face value of Rs.10,00,000/- each. The Respondent failed to repay the amount despite requests. A statutory notice dated 7th October, 2003 was addressed to the Respondent. There is no denial of the Respondent’s liability. 3. There is no affidavit in reply. The company has remained absent. 4. In the circumstances, the Company Petition is made absolute in terms of prayers (a) and (b), which read as under:- (a) That Mahakali Flyover Company Limited, the Respondent Company herein be ordered to be wound up by and under the directions of this Hon’ble Court under the provisions of the Companies Act, 1956; (b) That Official Liquidator, High Court, Bombay be appointed Liquidator of the said company with all powers under the Companies Act, 1956;” 5. The petitioner shall also be entitled to costs, quantified 9 mss CA585 at Rs.10,000/- which, the Petitioner shall be entitled to recover in the winding up proceedings. 6. The Company Petition, accordingly, stands disposed of.” 5. Mr. Rao, appearing in support of this application states that the order proceeds on the basis that there is no denial by the applicant’s/respondent’s liability. There is no affidavit-in-reply by the applicant/respondent before me and it has remained absent. Mr. Rao submits that in the affidavit–in- support of this application it is specifically pointed out that when the notice of this winding up petition was served the applicants engaged an advocate and the vakalatnama was also filed. The proof of the vakalatnama having been filed is on record. Despite the vakalatnama being filed the name of the applicant’s advocate was not shown on the daily board. Therefore, this is an ex parte order and it deserves to be recalled in the interest of justice and particularly in exercise of the inherent powers of this court under Rule 6 and 9 of the Company Court Rules 1959 read with Section 151 of the Code of Civil Procedure 1908. 6. Mr. Rao, therefore, submits that even if there are certain observations made by the learned Judge on merits, this order can still be recalled as it 10 mss CA585 passed ex parte. There is an inherent power in this court to recall the order of the instant nature. Mr. Rao submits that in the affidavit-in-support of this company application, the applicant has pointed out that it is pursuing all matters wherein the original petitioner has been involved, not only in this court but in the Debt Recovery Tribunal (D.R.T.) and Debt Recovery Appellate Tribunal (D.R.A.T.). My attention is invited to the fact that there were certain consent terms which were executed between the applicants and Hiranandani Construction Pvt. Ltd. where under the entire assets and properties of the applicant No. 2 were handed over to it. There are certain disputes arising out of these terms and their construction, interpretation, so also their implementation. Therefore, application was made where under the implementation of the consent terms in a faulty manner was highlighted but that application was rejected by D.R.T. by order dated 22nd December, 2006. Against the said order an appeal has been preferred before the Debt Recovery Appellate Tribunal. It was argued on several occasions. However, before any orders could be passed thereon the Presiding Officer of the Debt Recovery Appellate Tribunal demitted office. For several months thereafter the office was vacant. There was no Presiding Officer available. Now the vacancy has been filled in and the Presiding Officer has taken charge. In such circumstances, this court should take a lenient view 11 mss CA585 and allow the applicant-original respondent to prosecute the pending appeal before the D.R.A.T. and obtain orders therein. 7. Mr. Rao submits that prima facie there is no reply to the statutory notice in this case. The claim of the original petitioner-respondent No. 2 to this application has not been disputed. However, even respondent No. 2 is a party to the proceedings before D.R.A.T. If any orders are passed in the D.R.A.T. in favour of the applicant and its associate company as pointed out in this affidavit in support, the benefits thereof can also to be taken by the original petitioner which is a public body and claiming to protect public dues. In such circumstances this court should permit the applicants to pursue the proceedings before the D.R.A.T. and to enable it to do so in an effective and proper manner, the order of winding up should be set aside. The applicant would show its bonafide even after this company petition is revived and kept pending and would not do anything by which either the claim of the original petitioner is defeated or frustrated or the claims of the other parties are put in jeopardy. 8. Mr. Rao prays that in the peculiar facts of this case and particularly when no other claims have been received by the official liquidator such an order be made in the larger interest of justice. 9. On the other hand Ms. Iyer, learned counsel appearing on behalf of 12 mss CA585 the original petitioner submits that while she is not in a position to dispute the factual statement about applicants’ advocate’s name not being shown on the daily board and particularly on the day on which the order was passed, yet, considerable time has gone by after the order of winding up. My attention is invited by her to an order dated 10th December, 2010 on this company application, the further order dated 17th February, 2011 and an order of the Division Bench dated 25th February, 2011. It is submitted that in these orders all these grievances have been noted and enough time was given to the applicants to show their bonafides by pursuing the proceedings before the D.R.A.T. and obtain favourable orders therein. Therefore, this is not a case of any further leniency being shown to a party like the applicants and this court, therefore, should take a strict and stringent view of this matter. The applicants are in a position to pursue the matters by filing applications and appeals but do not show their bonafides by depositing sizable sum and do not express their willingness to do so. 10. Mr. Rao urged that presently the applicant is not in a position to deposit any sum because the properties of the applicants and their sister concerns are duly mortgaged in favour of Assets Reconstruction Company of India Ltd. and other entities. In such circumstances presently it is not possible to make any statement with regard to deposit of any sum. 13 mss CA585 11. With the assistance of Mr. Rao and Ms. Iyer I have perused this application, the annexures thereto and affidavits filed in reply and in rejoinder. Prima facie there does not appear to be a dispute about the liability to pay the original petitioner, the sums as claimed so also there does not appear to be any denial of the amounts that are claimed as due and payable. However, in the light of the fact that there is no denial of the statement made on oath that the name of the applicant’s advocate was not appearing on the daily board and finding that the applicant deserves an opportunity to obtain orders from the D.R.A.T. so also to defend itself in the present company petition which is for winding up, this company application is allowed. The order dated 21st July, 2010 is set aside but on the following conditions: a) The official liquidator being appointed as liquidator pursuant to the order dated 21st July, 2010 shall continue as a provisional liquidator with all powers under the Companies Act, 1956 but should not take any further steps till 30th April, 2012. Company Petition No. 347 of 2004 stands revived and restored to the file of this court and shall be placed for hearing and final disposal after 30th April, 2012. 14 mss CA585 b) The official liquidator shall stand appointed as a provisional liquidator therein will all powers as above; c) Before 30th April, 2012 the applicant shall, with due intimation to the original petitioner, apply for such reliefs as are permissible in law in the pending appeal before the Debt Recovery Appellate Tribunal Mumbai being Appeal No. 113 of 2005. It is stated that this appeal was heard on several occasions but it is pending for last more than six years. I have no doubt in my mind that, if any request for expeditious disposal and hearing is made by the applicant and the attention of the D.R.A.T. is invited to the order passed in this matter, it will consider sympathetically the request for an urgent and out of turn hearing and endeavour to dispose of the pending appeal in the light of the interest of all creditors and public dues being involved. d) All contentions of both sides in the pending proceedings shall not be affected by the admission of this petition and the appointment of the official liquidator as a provisional liquidator. e) The prohibition and injunction against the Applicant restraining it from transferring or disposing of its assets and properties and particularly under the orders of the Appellate Court dated 25th February, 2011 (Para 9 thereof) shall continue to operate till further orders of this court. 12. However, the applicant to pay cost of this application quantified at 15 mss CA585 Rs.25,000/- to the Respondent No. 2 which shall be remitted within a period of four weeks from today. (S. C. DHARMADHIKARI, J.)