HIGH COURT OF UTTARAKHAND AT NAINITAL Company Petition No. 24 of 2001 (M/S) M/s U.P. Carbide and Chemicals Limited …. Plaintiff .. Versus M/s Vindhyachal Air Product (P) Limited … Defendant Mr. Anil Kumar Joshi, Advocate for the petitioner. Mr. Naresh Pant, Advocate for the respondent. 11th August, 2009 Hon’ble Sudhanshu Dhulia, J. The only question to be decided in this case is as to whether this Court in its discretionary power under Section 149 C.P.C. can allow the applicant to deposit the court fee even after more than ten years of the institution of this case. The facts of this case in are as follows : The company namely M/s U.P. Carbide and Chemicals (plaintiff) has wounded up in a proceeding by order of the Hon’ble High Court of Judicature at Allahabad dated 19.7.1994. Consequently, as per the company law, the official liquidator was looking after the liquidation of the company. This company (plaintiff) had certain dues against another company known as M/s Vindhyachal Air Product (P) Limited. Consequently the plaintiff made a requisition to the concerned Collector to proceed for recovery against M/s Vindhyachal Air Product (P) Ltd. under the U.P. Public Moneys and Recovery of Dues Act and recovery proceedings were initiated under the said provision against M/s Vindhyachal Air Product (P) Limited. On this, M/s Vindhyachal Air Product (P) Limited filed a writ petition beaing no. 38860 of 1996 challenging the said recovery. The grounds in the writ petition were that this recovery cannot be made against M/s Vindhyachal Air Product 2 (P) Limited under the U.P. Public Moneys and Recovery of Dues Act nor does it grant jurisdiction to the Collector to proceed under the Act. This writ petition of M/s Vindhyachal Air Product (P) Limited was allowed by the Division Bench of Allahabad High Court vide order dated 6.3.1998. However, it was made clear in the said judgment that in case any other mode of recovery is available to the respondents (plaintiff), they can resort to that method which will be wholly uninfluenced by any observation existing in the said judgment of the Division Bench. Consequently thereafter, the present applicant (official liquidator) moved an application before the High Court of Judicature at Allahabad under Section 446 (2) of the Companies Act, 1956. Section 446 (2) of the Companies Act reads as follows : “446. (2) The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of – (a) any suit or proceedings by or against the company. (b) any claim made by or against the company (including claims by or against any of its branches in India); (c) any application made under section 391 by or in respect of the company; (d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or rise in course of the winding up of the company; Whether such suit or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of 3 the company, or before or after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960)” The applicant admittedly had to seek leave of the Court for filing the suit of recovery against the respondent and hence such an application was moved by the applicant/petitioner under Section 446 (2) of the Companies Act. On the said application an order was passed by the learned Single Judge of Allahabad High Court on 1.11.1999, allowing the application of the applicant and granting permission to the applicant to file a suit. It was further directed in that order that the “plaint shall be entertained by the Registry and a report will be submitted in respect of valuation, court fees and limitation within two weeks from today”. On the valuation of the suit a court fee of Rs. 9482.50 was determined by the office. This court fee was, however, not paid by the applicant. Section 4 of the Court Fees’ Act makes it mandatory that all documents shall be filed along with fee, which is chargeable under the Schedule and unless such a court fee is paid the matter would not be entertained. Thereafter the matter was listed before the learned Single Judge. The learned Single Judge passed an order on the application of the applicant whereby two months’ time was granted to the applicant to deposit court fee. The order dated 18.8.2000 reads as follows : “The official liquidator has to pay court fee of Rs. 9482.50 as per report of the stamp reporter. He submits that or the present he has no funds of the plaintiff company (in liquidation) in his hands to pay the court fee. He prays for and is allowed two months’ time to pay the requisite court fee. The submission of the official liquidator is that during this period he will 4 make some realization in liquidation proceedings to pay the court fee.” However, this court fee was not paid. Consequently, a perusal of the ordersheet shows that there is an office report dated 6.11.2000 which reads as follows : “In compliance with Court’s order dt. 18.8.2000 the case is put up for orders.” During the pendency of this matter before the Allahabad High Court, by an Act of Parliament the new State of Uttarakhand was created and since the matter pertained to the territory of Uttarakhand it was transferred to the High Court of Uttarakhand under Section 35 of the U.P. Reorganisation Act. The first order by this Court was passed on 23.5.2007 whereby fresh notices were issued to the parties on 25.5.2007. However, in the last two years since the transfer of this petition before this Court, the deficiency has not been removed and the court fee has not been paid by the applicant. Now the matter is listed before this Court. An oral request has been made now by Sri Anil Kumar Joshi, learned counsel for the applicant (official liquidator) that he may be allowed two weeks’ time to give the required court fee and proceed in the matter. It is this aspect which has to be examined by this Court whether under the facts and circumstances of the case where there has been a delay of more than ten years, this Court in exercise of its discretionary powers under Section 149 of C.P.C. can still allow the applicant to give the court fee. Section 149 of C.P.C. reads as follows : “149. Power to make up deficiency of Court-fees. – Where the whole or any part of any fee prescribed 5 for any document by the law for the time being in force relating to Court-fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such Court-fee; and upon such payment the document, in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance.” This provision, however, is in the nature of an exception, where the court in its discretion can allow an applicant to remove the deficiency. This ‘exception’ though must be read along with Section 4 of the Court Fees’ Act, which is the main provision relevant here for the purposes of court fee. Section 4 of Court Fees’ Act reads as follows : “4. Fees on documents filed, etc., in High Courts in their extraordinary jurisdiction; - No document of any of the kinds specified in the First or Second Schedule to this Act annexed, as chargeable with fees, shall be filed, exhibited or recorded in, or shall be received or furnished by, any of the said High Courts in any case coming before such Court in the exercise of its extraordinary original civil jurisdiction; or in the exercise of its extraordinary criminal jurisdiction; in their appellate jurisdiction;. – or in the exercise of its jurisdiction as regards appeals from the [judgment (other than judgments passed in the exercise of the ordinary original civil jurisdiction of the Court) of one] or more Judges of the said Court, or of a division Court; or in the exercise of its jurisdiction as regards appeals from the Courts subject to its superintendence; 6 as Courts of reference and revision. – or in the exercise of its jurisdiction as a Court of reference or revision; unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said Schedule as the proper fee for such document.” It is now well-settled that Section 149 C.P.C. should be read as a proviso to Section 4 of the Court Fees’ Act. What has to be seen here is whether in the present case ‘ allowance can be made for the applicant to remove the deficiency. However, in the considered view of this Court, this is not a case where the discretion, as given to the Court under Section 149 C.P.C. should be exercised. The delay in filing of the court fee has been inordinate and is not justified. The provisions of section 149 were considered in great detail by a Full Bench of Allahabad High Court (A.I.R. (38) 1951 Allahabad 64) whereby the Court had held that Section 149 empowers the Court to grant time for making good the deficiency “in its discretion”. Thus, the powers under Section 149 C.P.C. are, therefore, discretionary powers – discretion which has to be exercised judicially and not arbitrarily. In words of this Court : It follows, therefore, that no amount of liberal construction of the words “in its discretion” can make the discretion exercisable as a matter of course because in that case it ceases to be a discretion and becomes a right of a party.” Ultimately, the Court stated as follows in para 26 of its judgment relying upon earlier decisions of the High Courts on this issue: “26. The question whether poverty or inability to pay full court-fee at the time of filing an appeal be 7 regarded as a sufficient ground for the exercise of the discretion of the Court in extending time under S. 149, can be answered only with reference to the facts of a particular case.” Section 149 does not lay down any provision of a universal application but all it states is that in a given case such a discretion can be exercised by the Court. However, under the present set of fact and circumstances in the case, this is not a fit case where Section 149 can be exercised and, therefore, the said permission cannot be granted to the applicant at such a belated stage. Moreover, there is another aspect to it which is the delay in moving the application before the Court under Section 446 (2) of the Companies Act. The learned counsel for the respondent Sri Naresh Pant has also objected to the filing of application under Section 446 (2) of the Companies Act and has submitted that such an application was itself barred under the Limitation Act, even after an exemption of one year is granted to the applicant under Section 458 A of the Companies Act, as the period of limitation is calculated from the date of winding up order which is 19.7.1994 whereas the application under Section 446 (2) was moved in 9.12.1998. However, these objections do not have much force in view of the order of the learned Single Judge of the Allahabad High Court dated 1.11.1999 whereby the permission sought (permission to file suit for recovery against the respondent) was granted. Since the permission was granted and consequently thereafter a time of two months was given to the applicant to make amendments i.e. for depositing the required court fee, had the applicant deposited the requisite court fee, the objections regarding the limitation made by the respondent were of little relevance. This Court is not on the aspect of limitation at all. What goes to the root of the matter is whether 8 the Court can exercise its discretion under Section 149 C.P.C., and as it has already been referred above, under the present facts and circumstances such a discretion cannot be allowed. The applicant, however, relied upon the decision of the Hon’ble Apex Court in Mohammad Mahibulla and another v. Seth Chaman Lal (dead) by L.Rs. & others reported in AIR 1993 SC 1241 whereby the Division Bench while interpreting Order 7 Rule 11 and Section 149 of C.P.C. stated as follows : “5. Reading these two provisions together and keeping fairness of procedure in view, we are inclined to agree with the counsel for the appellant that when the lower Appellate Court came to hold that the memorandum of appeal had not been sufficiently stamped, an opportunity should have been given by the Court to the appellant to make good the balance Court- fee within a time to be indicated and if there was failure to comply with the direction of the Court the memorandum of appeal could have been dismissed. This opportunity having not been given, we are of the view that the dismissal of the appeal was not appropriate.” Consequently thereafter, in the above case the Hon’ble Apex Court granted time to the appellant to make amendments and deposit the court-fees. However, it is difficult to realize as to how the said case of the Apex Court helps the petitioner inasmuch as the petitioner was already given time way-back in the year 2000 by an opportunity to deposit the court fee within two months. Hence, the discretion has already been exercised in favour of the applicant by the learned Single Judge of the Allahabad High Court. All the same, the applicant failed to cash on the said indulgence of the Court and even after nine years, the court fee has not been deposited. Therefore, the said 9 ruling of the Hon’ble Apex Court will not apply in the present facts of the case. For the reasons stated above, the suit/application is liable to be dismissed and is hereby dismissed. No order as to costs. (Sudhanshu Dhulia, J.) 11.8.2009 Avneet