Case: M/S. Heat Shrink Technologies Limited Vs. Iit Capital Services Limited

with liberty to the Petitioners to lodge their claim with the Official Liquidator in accordance with law. Secondly, it may also be noticed that it appears from the record that during the pendency of the winding up petition, the Company, REPL Engineering Limited, changed its name to Heat Shrink Technologies Ltd., with registered office at the same place. During the course of hearing, a copy of the letter dated 26th November, 2007 was placed on record which supports this fact. In this very letter, certain allegations were made against the Counsel whom the Company had engaged earlier and that the Advocate should have brought to the notice of the Court that the matter is pending before the BIFR.7. No doubt, if a valid reference is pending before the BIFR, normally all the other proceedings need to be stayed. This position of law is of hardly any advantage to the Company on facts of the present case and particularly keeping in mind the conduct of the Company before the Company Court as well as before the BIFR. The Company Petition was admitted by the order of the Company Court dated 1st July, 2005 and the petition remained pending before the Company Court for a considerable time. The final order of winding up against the Company was passed on 13th September, 2007. There is not a whisper in the entire appeal as to what the Company was doing for all this period. It is nowhere stated that it was brought to the notice of the Company Court that a reference before the BIFR was pending and, therefore, the proceeding should be stayed, despite the fact that the appellant company had received notice from the Official Liquidator in furtherance to the order passed by the Court. The only document shown during the course of arguments in the appeal is the letter dated 26th November, 2007 which is of no consequence inasmuch as it is written after the order of winding up was made by the Court on 13th September, 2007. Even after writing this letter, the Company has taken no effective steps except casually filing the present appeal. In four paragraphs of the grounds of appeal, no material grounds have been stated except the vague ground that the proceedings before the BIFR were pending. The contention of the appellant company that it was obligatory upon the Company Court to find out as to whether the proceedings were pending before the BIFR or AAIFR and at what stage is unacceptable in law. This is strange for the appellant company to even raise such an argument. If the appellant company desired that the proceedings before the Company Court should be stayed because of the pendency of the proceedings before the BIFR or AAIFR it was obviously the obligation of the appellant company to bring due material on record before the learned Company Judge. The onus to prove this fact was obviously upon the appellant company which it miserably failed to discharge and now it cannot be permitted to take advantage of its own wrong.8. Furthermore, it may also be noticed that at all material time no proceedings were pending before the BIFR/AAIFR. The appellant company was desperate to have its proceedings continued before BIFR at any cost. As already noticed, it filed as many as four references between the period 30th April, 1999 and 13th June, 2006 but all these references came to be rejected. Strangely, the learned counsel appearing for the appellant during the course of hearing made a vague argument that the AAIFR had referred back the proceedings to BIFR in Appeal No. 109 of 2003 vide order dated 8th August, 2007. What happened thereafter the counsel was unable to inform the Court. This is the conduct of the appellant Company. In any case, we had directed the Registry to check from the internet and place a report before the Court as to whether any proceedings were pending before the BIFR in Reference No. 295/2002 which, according to the appellant, was referred back by AAIFR vide its order dated 8th August, 2007. The report put up by the Registry before us reads as under.As per online status provided by the Board for Industrial and Financial Reconstruction, there are total four references so far preferred by the Appellants Company as per the particulars given hereunder:I respectfully submit that AAIFRs reports are not available on web site and therefore, the status of Appeal No. 109 of 2003 before the AAIFR is not available.9. From the above, it is seen that no reference was pending before the BIFR when the Company Petition was admitted on 1st July, 2005. By that time, all the first three references filed by the Company right from 1998 to 2003 had already been dismissed even in appeal by AAIFR. The Company was ordered to be wound up on 13th September, 2007. Again at that time no reference was pending before the BIFR and none appears to be pending from the record. The appellant company in fact has abused the process of law not only before the Company Court but even before BIFR/AAIFR. In the present appeal, again no effort was made by the appellant to bring on record anything to the contrary than what we have noticed.10. Before the learned Company Judge, no defence was put forward when the company was ordered to be wound up. Even in the grounds of appeal, nothing has been stated on merits of the claim of the respondent Company. There is no dispute to the fact that the cheques were issued by the appellant company and/or under its former name. The funds were insufficient in the bank accounts. No defence has been offered even in appeal before the Court. We are unable to find any error in the judgment of the learned single Judge either in law or on facts. Appeal (Lodging) No. 927 of 2007 is consequently dismissed. However, in the facts of the case, we leave the parties to bear their own costs.

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

Explanation:
0[ds]7. No doubt, if a valid reference is pending before the BIFR, normally all the other proceedings need to be stayed. This position of law is of hardly any advantage to the Company on facts of the present case and particularly keeping in mind the conduct of the Company before the Company Court as well as before the BIFR. The Company Petition was admitted by the order of the Company Court dated 1st July, 2005 and the petition remained pending before the Company Court for a considerable time. The final order of winding up against the Company was passed on 13th September, 2007. There is not a whisper in the entire appeal as to what the Company was doing for all this period. It is nowhere stated that it was brought to the notice of the Company Court that a reference before the BIFR was pending and, therefore, the proceeding should be stayed, despite the fact that the appellant company had received notice from the Official Liquidator in furtherance to the order passed by the Court. The only document shown during the course of arguments in the appeal is the letter dated 26th November, 2007 which is of no consequence inasmuch as it is written after the order of winding up was made by the Court on 13th September, 2007. Even after writing this letter, the Company has taken no effective steps except casually filing the present appeal. In four paragraphs of the grounds of appeal, no material grounds have been stated except the vague ground that the proceedings before the BIFR were pending. The contention of the appellant company that it was obligatory upon the Company Court to find out as to whether the proceedings were pending before the BIFR or AAIFR and at what stage is unacceptable in law. This is strange for the appellant company to even raise such an argument. If the appellant company desired that the proceedings before the Company Court should be stayed because of the pendency of the proceedings before the BIFR or AAIFR it was obviously the obligation of the appellant company to bring due material on record before the learned Company Judge. The onus to prove this fact was obviously upon the appellant company which it miserably failed to discharge and now it cannot be permitted to take advantage of its ownalready noticed, it filed as many as four references between the period 30th April, 1999 and 13th June, 2006 but all these references came to be rejected. Strangely, the learned counsel appearing for the appellant during the course of hearing made a vague argument that the AAIFR had referred back the proceedings to BIFR in Appeal No. 109 of 2003 vide order dated 8th August, 2007. What happened thereafter the counsel was unable to inform the Court. This is the conduct of the appellant Company.9. From the above, it is seen that no reference was pending before the BIFR when the Company Petition was admitted on 1st July, 2005. By that time, all the first three references filed by the Company right from 1998 to 2003 had already been dismissed even in appeal by AAIFR. The Company was ordered to be wound up on 13th September, 2007. Again at that time no reference was pending before the BIFR and none appears to be pending from the record. The appellant company in fact has abused the process of law not only before the Company Court but even before BIFR/AAIFR. In the present appeal, again no effort was made by the appellant to bring on record anything to the contrary than what we haveis no dispute to the fact that the cheques were issued by the appellant company and/or under its former name. The funds were insufficient in the bank accounts. No defence has been offered even in appeal before the Court. We are unable to find any error in the judgment of the learned single Judge either in law or on facts. Appeal (Lodging) No. 927 of 2007 is consequently dismissed. However, in the facts of the case, we leave the parties to bear their own costs.