Case: M/S.Associated Journals Ltd Vs. The Mysore Paper Mills Ltd

affidavit by filing fresh affidavit for removal of the defect in swearing clause of the affidavit. The case of the respondents is not prejudiced in any manner nor there was any bar of limitation to come in the way. The winding up petition has already been admitted and any amendment or correction to rectify the defect of the affidavit by filing fresh affidavit at this stage would not be so fatal to dismiss the petition. The Court has always discretion to allow the amendment of pleadings, reswearing or reverification of the petition. The defects thus could be cured subsequently even after filing of the petition." 18. In this context, it is beneficial to reproduce Form No.3 of the Companies (Court) Rules, 1959: - "FORM NO.3[See rule 21][Heading as in Form No.1]Company Petition No.......of 19....Affidavit verifying petitionI, A.B., son of ...................aged ...........residing at .............do, solemnly affirm and say as follows:-1. I am a director/secretary/.............../of ................Ltd., the petitioner in the above matter *(and am duly authorized by the said petitioner to make this affidavit on its behalf).[Note.-This paragraph is to be included in cases where the petitioner is the company.]2. The statements made in paragraphs.......of the petition herein now shown to me and marked with the letter `A, are true to my knowledge, and the statements made in paragraphs..........are based on information, and I believe them to be true.Solemnly affirmed, etc.*Note.- To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company." 19. Rule 21 of the Companies (Court) Rules, 1959 prescribes the procedure for verification of affidavit. Rule 21 is reproduced as under: - "R.21. Affidavit verifying petition.- Every petition shall be verified by an affidavit made by the petitioner or by one of the petitioners, where there are more than one, and in the case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof; such affidavit shall be filed along with the petition and shall be in Form No.3:Provided that the Judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the petitioner to make and file the affidavit." 20. The affidavit filed by the respondent herein is available at page 63 of the paper book. Para 2 of the said affidavit is reproduced as under: - "2. That I have read the contents of the accompanying Company Petition and have understood the contents thereof.I, the deponent above named do hereby swear that the contents of paragraphs nos.1 and 2 of this affidavit, those of paragraph nos.1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22 of the accompanying petition are true to the best of my knowledge, information and belief, that no part of its is false and nothing material has been concealed in it. So help me God." 21 . A careful perusal of the affidavit filed by the respondent and Form No.3 as prescribed under Rule 21 would show that there is substantial compliance of the said Rule. A Three-Judge Bench of this Court in an identical matter in Malhotra Steel Syndicate vs. Punjab Chemi-Plants Ltd., (1993) Suppl.3 SCC 565 has also opined that even if there is some slight defect or irregularity in the filing of affidavit, the appellant should have been given an opportunity to rectify the same. In the instant case, the same liberty was given to the respondent by the Company Judge as also by the Division Bench of the High Court. We are, therefore, of the opinion that the Division Bench was right in dismissing the appeal filed by the appellant.22. This Court has in catena of decisions held that substantial compliance is enough. Rules are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The Rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition. In the instant case, both the learned Company Judge and also the Division Bench were of the opinion that there is substantial compliance of Rule 21. In Khaitan Overseas & Finance Ltd. vs. Dhandhania Bros. P. Ltd., (2002) 1 Comp LJ 274, a petition was filed by the Chairman-cum-Director of the company. He annexed with the petition a resolution of the Board of Directors permitting him to execute necessary petitions, documents, applications, affidavits and to lodge a suit to recover dues from the debtor company. This was held to include the authority to file a Winding Up Petition also. The affidavit accompanying the petition was signed, sworn and affirmed on oath in the prescribed manner. The court said that the affidavit conformed with the requirements of law.23. We are of the opinion that the Rules of procedure cannot be a tool to circumvent the justice. In fact, the Rules are laid to help for speedy disposal of justice. The learned Judges of the Division Bench has appreciated that the technical plea raised by the respondent regarding defective affidavit was raised after seven years of filing the petition. The learned counsel submitted that the appellant is raising the defence of technical plea to protect himself from the consequence of his default and this plea cannot be considered effective enough to review the order of advertisement. Assuming without admitting that the affidavit was not verified as per the Company Rules, the learned counsel has correctly submitted that if this objection was taken earlier the respondent would have cured the defect.24. For the aforesaid reasons, we are of the opinion that the appeal has no merit and the order passed by the learned Judges of the Division Bench confirming the order passed by the Learned Company Judge does not call for any interference by this Court.

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

Explanation:
0[ds]A careful perusal of the affidavit filed by the respondent and Form No.3 as prescribed under Rule 21 would show that there is substantial compliance of the said Rule. ABench of this Court in an identical matter in Malhotra Steel Syndicate vs. PunjabLtd., (1993) Suppl.3 SCC 565 has also opined that even if there is some slight defect or irregularity in the filing of affidavit, the appellant should have been given an opportunity to rectify the same. In the instant case, the same liberty was given to the respondent by the Company Judge as also by the Division Bench of the High Court. We are, therefore, of the opinion that the Division Bench was right in dismissing the appeal filed by the appellant.22. This Court has in catena of decisions held that substantial compliance is enough. Rules are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The Rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition. In the instant case, both the learned Company Judge and also the Division Bench were of the opinion that there is substantial compliance of Rule 21. In Khaitan Overseas & Finance Ltd. vs. Dhandhania Bros. P. Ltd., (2002) 1 Comp LJ 274, a petition was filed by theof the company. He annexed with the petition a resolution of the Board of Directors permitting him to execute necessary petitions, documents, applications, affidavits and to lodge a suit to recover dues from the debtor company. This was held to include the authority to file a Winding Up Petition also. The affidavit accompanying the petition was signed, sworn and affirmed on oath in the prescribed manner. The court said that the affidavit conformed with the requirements of law.23. We are of the opinion that the Rules of procedure cannot be a tool to circumvent the justice. In fact, the Rules are laid to help for speedy disposal of justice. The learned Judges of the Division Bench has appreciated that the technical plea raised by the respondent regarding defective affidavit was raised after seven years of filing the petition. The learned counsel submitted that the appellant is raising the defence of technical plea to protect himself from the consequence of his default and this plea cannot be considered effective enough to review the order of advertisement. Assuming without admitting that the affidavit was not verified as per the Company Rules, the learned counsel has correctly submitted that if this objection was taken earlier the respondent would have cured the defect.24. For the aforesaid reasons, we are of the opinion that the appeal has no merit and the order passed by the learned Judges of the Division Bench confirming the order passed by the Learned Company Judge does not call for any interference by this Court.