Case: Severn Trent Water Purification, Inc Vs. Chloro Controls (India) P.Ltd.

that looking to the company petition in its entirety and also the grounds and prayers, it is clear that the petition was not presented by Severn Trent as Creditor of the Company but as a Contributory. The contention as to Creditor was raised belatedly for the first time in argument before the Division Bench which was an afterthought. This is apparent from the observations of the Division Bench in the impugned order in para 54 extracted earlier. It was, therefore, submitted that no such argument could have been permitted and to that extent, the order passed by the Division Bench of the High Court deserves to be interfered with. 67. We have given anxious consideration to the above submission. In our opinion, however, it cannot be said that the Division Bench was in error in passing the impugned order and remitting the matter to the learned Company Judge to consider the question as to maintainability of company petition filed by Severn Trent as a Creditor of the Company. In this connection, our attention has been invited by the learned counsel for Severn Trent to the company petition. In para 16 of the petition, it was stated by Severn Trent that it was also a Creditor of the Company and admitted sums owed by the Company to Severn Trent had not been paid. It was further stated that the Board of Directors of the Company and the Managing Director had acknowledged the Companys liability to Severn Trent in various communications and Board Meetings. It was further stated that in the circumstances, Severn Trent was constrained to issue legal notice on August 4, 2004 demanding payment of all outstanding dues. A copy of the demand notice was also annexed to the company petition. According to Severn Trent, total amount due and payable by the Company to Severn Trent as on July 31, 2004 came to US $ 575113.29. In ground (i) also, it was the case of the Company that there was intentional refusal by Mr. Kocha to allow the Company to pay its admitted debts to Severn Trent. In paragraph 41, it was stated by Severn Trent that it was just, equitable, necessary and in the interest of justice and in order to secure the dues of the petitioner that Provisional Liquidator should be appointed. 68. It is thus clear that though the case put forward by Severn Trent in the winding up petition was as a contributory, the factum of the Company being Debtor and Severn Trent being Creditor and in spite of dues being admitted by the Company, there was non payment on the part of the Company had been mentioned in the petition. The learned counsel for Severn Trent appears to be right that in view of the finding by the learned Company Judge that the petition instituted by Severn Trent as a contributory was maintainable, it was no more necessary for the learned Company Judge to consider the question whether the company petition filed by Severn Trent was maintainable in the capacity as a Creditor. 69. It was then contended by the learned counsel for the Company that the ground for winding up of Company under clause (f) of Section 433 was not available to Severn Trent in case it had presented a petition as a Creditor of the Company. In this connection, our attention was invited to certain decisions. In our opinion, it would not be appropriate to express any opinion one way or the other since we are of the view that the Division Bench of the High Court was not wrong in allowing Severn Trent to argue that point before the learned Company Judge as that point did not arise before him earlier. We may, however, hasten to add that we may not be understood to have recorded a finding that the petition presented by Severn Trent is maintainable. We clarify that as and when the matter will be taken up by the learned Company Judge, it will be open to the Company to raise a contention that no such petition as presented is maintainable in the capacity as a Creditor. 70. Question No. 2 is answered accordingly. 3. Whether a winding up petition filed by Severn Trent is liable to be dismissed at the threshold on the ground of premature advertisement by Severn Trent without the order of the Court as required by law? 71. So far as the third question is concerned, neither the learned Company Judge, nor the Division Bench has decided it. Before the learned Company Judge, no such contention appears to have been advanced by the Company. Before the Division Bench, it was argued that since there was premature advertisement by the Severn Trent without any order from the Company Court, there was abuse of process of the Court by Severn Trent and the petition was liable to be dismissed only on that ground. Before us also, the above contention was reiterated by the learned counsel for the Company and in support thereof, case-law has been cited. The learned counsel for the Severn Trent, however, submitted that the advertisement was qualified, carefully worded and the facts stated therein were accurate. It was essentially a notice to creditors, contributories and other persons intimating about presenting of winding up petition and there was no mala fide intention or oblique motive in issuing the advertisement. We may only state that since the Division Bench of the High Court has remitted the matter to the learned Company Judge and granted liberty to the Company to oppose admission of the Company petition on all available grounds including the ground of premature advertisement, we need not express any opinion one way or the other. As observed by the Division Bench of the High Court, at the time the company petition will be taken up by the Company Judge for admission, it will be open to the Company or contesting respondent to oppose the admission on all grounds available. 72. Question No. 3 is answered accordingly.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]19. Bare reading of Section 439 makes it clear that it is couched in positive as well as negative words. Whereas sub-section (1) of the said section permits the presentation of application for winding up of a Company by any person enlisted therein, it clarifies that the said provision is subject to the provision of the said section and, hence, the entire section has to be read with a view to consider the right of a person presenting a petition for winding up of a Company.From the above scheme of the Act, it is abundantly clear that a contributorys right to present a winding up petition must be one either under clause (a) or under clause (b) of sub-section (4) of Section 439. It is nobodys case that clause (a) of Section 439(4) is attracted in the instant case. Hence, Severn Trent can only claim the right to present a winding up petition under clause (b) of sub-section (4) of Section 439 of the Act.. in theinstant case, neither the foreign law was pleaded nor such evidence has been produced to prove merger/amalgamation. But even otherwise, in our considered opinion, Severn Trent cannot be treated as or said to be contributory unless and until the requirements of law i.e. the provisions of Section 439(4)(b) have been complied with. It is not disputed that the name of Severn Trent has not been registered in the Register of the Company and hence, it cannot present a petition for winding up of the Company in the capacity of a contributory.From the above discussion, it is clear that the provisions of the Act must be complied with before presenting a winding up petition under Section 439(4)(b) of the Act. If a person intends to present a petition for winding up of a company as a contributory, he/it has to satisfy the Company Court that his/its case is covered by one of the eventualities contemplated by clause (b) of sub-section (4) of Section 439 of the Act.We must express our inability to uphold the contention of learned counsel. In our judgment, sub-section (4) of Section 439 is a self-contained Code as to presentation of petition by a contributory. A person claiming to be a contributory and presenting a petition for winding up of a Company in that capacity must fulfill the conditions laid down in the said section. Moreover, as observed by us, if there is omission, default or illegal action on the part of the Company in not registering the name of the contributory even though he/it can be said to be a contributory by holding the shares as required by clause (b) of sub-section (4) of Section 439, the law provides a remedy. In the instant case, however, no such course has been adopted by Severn Trent. In the circumstances, in our opinion, it cannot be said that the Division Bench of the High Court was in error in holding that Severn Trent could not be said to be a contributory to present a winding up petition.The above argument weighed with the learned Single Judge and he observed that though Severn Trent was not the person who was originally allotted shares nor its name was registered in the register of the Company but the expression or have devolved on him through the death of former holder would get attracted inasmuch as upon merger/amalgamation of Capital Controls (Delaware) Company, Inc. in Severn Trent, the former Company i.e. former holder can be said to have been met with death and the shares held by the said Company could be said to have devolved on Severn Trent. If it is so, obviously, a petition filed by Severn Trent as a contributory was maintainable.In the context of Company Law, winding up of a body corporate is not the same thing as or equivalent to death of a member. An individual and a body corporate expressly have been treated separately which is clear from Sections 430, 431 and 432 of the Act. Under the scheme of the Act, every creditor may present a petition for winding up of a company, but every contributory cannot. A contributory to be eligible and qualified to present a winding up petition must be covered by sub-section (4) of Section 439 of the Act and the Legislature, in its wisdom, excluded certain categories of persons from being entitled to present a petition for winding up as contributory. As already held by us earlier, the provision is exhaustive in nature and its sweep cannot be extended by judicial interpretation. Upholding of argument of Severn Trent and conceding the right to present a petition for winding up of a Company though it cannot be said to be a contributory would, in our judgment, result in re-writing of the provision. A Court of law cannot adopt a construction which would result in amendment of a statute. The contention of the learned counsel for Severn Trent, therefore, must be rejected.For the aforesaid reasons, we answer question No.1 in the negative and hold that a winding up petition filed by Severn Trent in the capacity as a contributory is not maintainable.So far as second question is concerned, reading of the order passed by the learned Company Judge makes it clear that no such argument was raised on behalf of Severn Trent presumably because there was no occasion for such argument inasmuch as according to the learned Company Judge, Severn Trent could be said to be a contributory within the meaning of Section 439 (4)(b) of the Act and a petition presented by Severn Trent in that capacity was tenable. Since the order passed by the Company Judge was challenged by the Company before the Division Bench and the Division Bench upheld the objection of the Company and reached a conclusion that the learned Company Judge was wrong in treating Severn Trent as contributory and granting it locus to present a petition for winding up of Company, that an alternative argument was raised on behalf of Severn Trent that Severn Trent was also a Creditor of the Company and in that capacity i.in the capacity of aCreditor, the petition for winding up of the Company was maintainable.We have given anxious consideration to the above submission. In our opinion, however, it cannot be said that the Division Bench was in error in passing the impugned order and remitting the matter to the learned Company Judge to consider the question as to maintainability of company petition filed by Severn Trent as a Creditor of the Company. In this connection, our attention has been invited by the learned counsel for Severn Trent to the company petition. In para 16 of the petition, it was stated by Severn Trent that it was also a Creditor of the Company and admitted sums owed by the Company to Severn Trent had not been paid. It was further stated that the Board of Directors of the Company and the Managing Director had acknowledged the Companys liability to Severn Trent in various communications and Board Meetings. It was further stated that in the circumstances, Severn Trent was constrained to issue legal notice on August 4, 2004 demanding payment of all outstanding dues. A copy of the demand notice was also annexed to the company petition. According to Severn Trent, total amount due and payable by the Company to Severn Trent as on July 31, 2004 came to US $ 575113.29. In ground (i) also, it was the case of the Company that there was intentional refusal by Mr. Kocha to allow the Company to pay its admitted debts to Severn Trent. In paragraph 41, it was stated by Severn Trent that it was just, equitable, necessary and in the interest of justice and in order to secure the dues of the petitioner that Provisional Liquidator should be appointed.So far as the third question is concerned, neither the learned Company Judge, nor the Division Bench has decided it. Before the learned Company Judge, no such contention appears to have been advanced by the Company. Before the Division Bench, it was argued that since there was premature advertisement by the Severn Trent without any order from the Company Court, there was abuse of process of the Court by Severn Trent and the petition was liable to be dismissed only on that ground. Before us also, the above contention was reiterated by the learned counsel for the Company and in support thereof, case-law has been cited. The learned counsel for the Severn Trent, however, submitted that the advertisement was qualified, carefully worded and the facts stated therein were accurate. It was essentially a notice to creditors, contributories and other persons intimating about presenting of winding up petition and there was no mala fide intention or oblique motive in issuing the advertisement. We may only state that since the Division Bench of the High Court has remitted the matter to the learned Company Judge and granted liberty to the Company to oppose admission of the Company petition on all available grounds including the ground of premature advertisement, we need not express any opinion one way or the other. As observed by the Division Bench of the High Court, at the time the company petition will be taken up by the Company Judge for admission, it will be open to the Company or contesting respondent to oppose the admission on all grounds available.It is thus clear that though the case put forward by Severn Trent in the winding up petition was as a contributory, the factum of the Company being Debtor and Severn Trent being Creditor and in spite of dues being admitted by the Company, there was non payment on the part of the Company had been mentioned in the petition. The learned counsel for Severn Trent appears to be right that in view of the finding by the learned Company Judge that the petition instituted by Severn Trent as a contributory was maintainable, it was no more necessary for the learned Company Judge to consider the question whether the company petition filed by Severn Trent was maintainable in the capacity as aour opinion, it would not be appropriate to express any opinion one way or the other since we are of the view that the Division Bench of the High Court was not wrong in allowing Severn Trent to argue that point before the learned Company Judge as that point did not arise before him earlier. We may, however, hasten to add that we may not be understood to have recorded a finding that the petition presented by Severn Trent is maintainable. We clarify that as and when the matter will be taken up by the learned Company Judge, it will be open to the Company to raise a contention that no such petition as presented is maintainable in the capacity as a