CP503-10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.503 OF 2010 M/s.Greaves Ltd. .. Petitioner and Rajesh Shah and Ors. .. Applicants Vs. Official Liquidator (M/s.Circle KS Polyset Industries Pvt. Ltd. (In liqn) & Ors.) .. Respondents Mr.P.D.Sampat with Vilas Jadhav for applicants Mr.Vishal Kanade with Nikhil Rajani i/b. V.Deshpande & Co. for respondent N.2 Mr.S.R.Bhalekar for respondent No.3 Dr.T.Pandian, O.L. CORAM : S.C.DHARMADHIKARI, J. DATE : 20 th January 2011 P.C.: 1] This is a company application filed by the applicants who are ex-Directors of the company in liquidation seeking setting aside of the order of winding up of the company in liquidation passed on 26th March 2008. The applicants also seek a further relief of stay of proceedings pursuant to the order of winding up including proceedings of sale as are permissible in law. CP503-10 2 2] In the affidavit in support filed by Mr.Rajesh Shah, applicant No.1 who has been duly authorised by applicant Nos. 2 and 3, it is stated that the order was passed after nearly nine years of the institution of the company petition for winding up. There was no service of the petition on the company in liquidation and the Court proceeded on the basis that the affidavit of petitioner’s advocate’s clerk filed in this Court demonstrates that the notice of the company petition has been duly served in terms of the Company Court Rules, 1959 and more particularly Rule 28 thereof. However, the packet containing the proceedings was returned by the postal authorities with remark “not claimed”. It is on this basis that the Court drew an inference that the petition and the papers therein have been duly served. It is submitted that there are series of ex parte orders passed. Further it is stated that Greater Bombay Coop. Bank Ltd., which is respondent No.3 to this application has taken possession of the assets of the company in liquidation by exercising powers under SARFAESI Act 2002 and certain moveables being plant and machinery have been CP503-10 3 sold. It is also stated that the matter in that behalf is pending before the Supreme Court. 3] It is submitted that there was correspondence with the liquidator and when the applicants came to know after an advertisement was released in daily Loksatta that an ex parte order has been passed, that this company application has been filed. Various other allegations have been made so also statements in the affidavit in support. 4] However, during the course of arguments learned Counsel for the applicant submitted that the company petition was filed way back in 1999 but it took more than nine years for this company court to take up the matter and pass an order of winding up. He submits that there was no notice but the court proceeded by relying upon the affidavit of service filed way back in the year 1999 stating that the petition and the papers are duly served. In such circumstances, interest of justice requires that one more opportunity should have been given to the company in liquidation to defend the claim. The CP503-10 4 company in liquidation would have then pointed out that there were several difficulties including the proceedings under the SARFAESI Act and certain personal tragedies in the family of directors. All this resulted in temporary financial crisis. Now an attempt is being made to contest all proceedings including under SARFAESI Act and even to try and revive the company under the scheme and to enable the applicant to do so, this Court should passed an order recalling the earlier orders including winding up order. 5] Mr.Kanade appearing for petitioner has pointed out that this application is not bonafide. Applicants were aware of the proceedings and even after the winding up order have approached the Liquidator. There is enough indication that even prior to the winding up order, the matter appeared before this Court. In such circumstances, there is no room for the presumption that the Court did nothing in the matter for nine long years and suddenly the winding up order came to be passed relying upon the affidavit of service effected in 1999 and affidavit filed to that effect in 2005. It is submitted that annexures to the CP503-10 5 affidavit in support would indicate that the ex-directors and applicants in particular were aware of the proceedings. It is not as if they have not corresponded with the Liquidator and on their own showing there are letters written in that behalf. 6] In such circumstances and when the proceedings were duly served, this court should not recall the orders particularly when the applicants have not shown their bonafides and no scheme is presented nor any attempt is made to meet the dues of the creditors of the company in liquidation, which are now estimated to Rs.5.70 Crores and more. For all these reasons, there is no merit in the application and it should be dismissed. 7] With the assistance of the learned Counsel for parties, I have perused the application and all annexures thereto so also affidavits filed before the Court. 8] The applicants annexe an order dated 15th July 2005 which is a CP503-10 6 common order in several petitions for winding up filed in this Court in the year 1999. The Court passed a common order directing all petitioners to file affidavit of publication within four weeks from the date of that order dated 15th July 2005. However, on 22nd July 2005 once again the matter appeared before the Court where the Court finding that none appeared for the petitioner issued a bailable warrant to the authorised officer of the petitioner. Thereafter, the petitioner appeared and they sought time to file affidavit. The matter again appeared on 19th August 2005 and on 22nd August 2005 when the Court found that the order has been complied with and the affidavit of publication was filed. 9] There is no merit in the contention of the applicant’s Counsel inasmuch as the service and compliance with Rule 28 was already made. The notice of petition post admission was duly served but compliance by filing affidavit in that behalf was not reported. That affidavit is contemplated by Rule 30 of the Company Court Rules 1959. By non filing of that affidavit or filing it belatedly no inference CP503-10 7 can be drawn that the service itself was not effected on the petitioner and such an inference without anything on record cannot be drawn. I am satisfied that copy of the petition with all annexures was duly served on the company in liquidation. It is common knowledge that the petitions for winding up are admitted and thereafter when the requirement of the Rules are completed, they are posted for hearing and final disposal. It is not as if there is any time limit for disposing off the proceedings. Therefore, merely because the petition did not reach for hearing and final disposal for seven years or more and reached thereafter, is no ground for recalling the order of winding up and particularly on the spacious pleas that are now raised. It is clearly an after thought of the applicants as they were aware of the winding up order. Had they not been aware, they would not have entered into any correspondence with the Liquidator. It is clear that as early as on 29th December 2008, the Liquidator called upon each one of the applicant to file statement of affairs. Thereafter, a meeting was fixed and a notice of that meeting was also given. In reply to that notice on 16th March 2009, applicants addressed a letter to the Liquidator CP503-10 8 pointing out that they have corresponded on 5th July 2005 with Greater Bombay Coop. Bank requesting it to give copy of possession notice. Thus, the applicants were aware that they have to comply with the provisions of law after the admission of the winding up petition and the order of winding up dated 26th March 2008. They had to give details of the assets and liabilities and that is how they corresponded and pointed out the claim of Gr.Bombay Coop. Bank. There is a further letter as well. In such circumstances, I am of the view that the application made today for recalling the order of winding up on the ground that the company in liquidation had no notice of the petition is a request which lacks bonafides. 10] In such circumstances, there is no merit in the company application and it is accordingly dismissed. No costs. (S.C.DHARMADHIKARI, J)