Calcutta High Court
Smt.Suvra Dey And Ors vs Pawan Kumar Churiwal & Ors on 12 July, 2013
Author: Arun Mishra
Bench: Arun Mishra
IN THE HIGH COURT AT CALCAUTTA
Civil Appellate Jurisdiction
Original Side
APOT 38 OF 2013
ACO 19 OF 2013
C.P.179 OF 2008
SMT.SUVRA DEY AND ORS.
VERSUS
PAWAN KUMAR CHURIWAL & ORS.
With
APOT 39 OF 2013
ACO 20 OF 2013
C.P.179 OF 2008
DAY TO DAY VINIMAY PVT.LTD.& ORS/
VERSUS
PAWAN PROJECTS PVT.LTD.& ORS.
For the approval of :
The Hon'ble Justice Arun Mishra, Chief Justice
................................................................................................
The Hon'ble Justice Joymalya Bagchi ................................................................................................ Date of Judgment : 12TH July, 2013 Whether the judgment should be sent to the reporters for reporting ? (Yes/No) Whether the reporters be allowed to see the Judgment ? (Yes/No) 2 IN THE HIGH COURT AT CALCAUTTA Civil Appellate Jurisdiction Original Side APOT 38 OF 2013 ACO 19 OF 2013 C.P.179 OF 2008 SMT.SUVRA DEY AND ORS.
VERSUS PAWAN KUMAR CHURIWAL & ORS.
With APOT 39 OF 2013 ACO 20 OF 2013 C.P.179 OF 2008 DAY TO DAY VINIMAY PVT.LTD.& ORS/ VERSUS PAWAN PROJECTS PVT.LTD.& ORS.
For the Appellants : Mr. Promit Kumar Ray with
Mrs. Suparna Mukherjee
Mr. Shaunak Ghosh and
Mr. R.K.Khandelwal, Advocates
For the Appellants in : Mr. Arik Banerjee with
APOT 39 of 2013 Mr. Rajib Mullick, Advocates
For Respondent Nos. Mr. Swapan Kumar Mullick with
2,5,6 and 10 Mr. Javed K. Sanwarwala and
Mr. Nahid Masood, Advocates
For Respondent Nos.10, : Mr. Anubhav Sinha with
13, 14 and 18 in Ms. Debjani Chatterjee, Advocates
APOT 38 of 2013 and
Respondent Nos.2,5,8 & 10
In APOT 39 of 2013
For the Respondents : Mr. Abhrajit Mitra with
Ms. Noelle Banerjee and
Mr. Dipak Dey, Advocates
3
BEFORE
THE HON'BLE CHIEF JUSTICE ARUN MISHRA
THE HON'BLE JUSTICE JOYMALYA BAGCHI
Date : July 12, 2013
THE COURT : Surprisingly after having lost in the first round of
litigation for being impleaded as party-respondents to the case pending before the single Judge wherein the learned single Judge by order dated 8th August 2012 had declined to allow the appellants to intervene in applications for recalling the order sanctioning the scheme of amalgamation and which order was affirmed by a Division Bench of this Court and by the Hon'ble Supreme Court in Special Leave Petitions, the appellants have no right even to be impleaded as party respondents to the pending litigation. When Terms of Settlement contemplated by the parties have been accepted by the Court, again, appeals have been preferred by the appellants.
We wonder as to how the appellants are at all interested in the affairs of the company in the backdrop of the fact that the company before amalgamation has filed a suit for specific performance of the agreement for sale which is pending before the Civil Court at Barasat and the same is being contested by the appellants. Now the appellants have come up in the appeals as the company which had filed the suit and which had been dissolved has been revived by virtue of the recalling order sanctioning the scheme of amalgamation. The Terms of Settlement executed between the parties has been accepted by the 4 Court. The single Judge has passed the order on 14th December 2012 in C.A. No.413 of 2013 (C.,P.No.179 of 2008).
The learned counsel appearing on behalf of the appellants has submitted that in view of the provisions contained in Section 392 of the Companies Act, 1956, the appellants are clearly persons interested in the affairs of the company and hence can question the settlement reached as also the impugned order. It has been submitted by the learned counsel that the single Judge has not applied the mind to the Terms of Settlement whereas it is incumbent upon the Court to consider the legality of the Terms of Settlement. Thus, the impugned order is bad in law. It was also submitted by the learned counsel that by virtue of the provisions contained in section 559 of the Companies Act, 1956 the period of only two years was available so as to declare that dissolution was void. Thus the impugned order is violative of the provisions contained in Section 559 of the Companies Act. Learned counsel further submitted that considering the Terms of Settlement and the nature of the suit which is pending before the Civil Court at Barasat, it directly affects the rights of the appellants as the suit was liable to be dismissed as the plaintiff company had been dissolved. Now there is a revival and the appeals filed by the appellants should be entertained.
Learned counsel appearing on behalf of the respondents has submitted that order of singe Bench and the order dated 17th December 2012 passed by the Division Bench of this Court has been affirmed by the Supreme Court. The single Bench vide order dated 8th August, 2012 had refused to grant leave to the appellants to intervene in the pending applications for recalling the order 5 sanctioning the scheme of amalgamation. The Division Bench of this Court by the order dated 17th December 2012 also held that the appellants are neither proper nor necessary parties in the application for recalling the order granting the scheme of amalgamation and they shall have the liberty to take such point as may be open to them in law in the suit. All the rights of the appellants were directed to be kept intact, to be decided in the civil court at Barasat. Even otherwise, section 392 of the Act is not applicable and the appellants had no right to question the Terms of Settlement executed between the parties as they cannot be said to be interested in the affairs of the company within purview of Section 392 of the Act.
First, coming to the submission made by the learned counsel appearing on behalf of the appellants with respect to Section 392 of the Companies Act, 1956, section 392 of the Act the same contains provisions as to power of the Court to enforce compromises and arrangements. It says that where the High Court makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it shall have the power to supervise the carrying out of the compromise or arrangement and may at the time of making such order or at any time thereafter give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement in question.
In support of his contentions, the learned counsel for the appellants relied upon a decision in S.K.Gupta and another vs. K.P.Jain & Anr., (1979) 3 SCC 54 in which the Apex Court has laid down that Section 392 has wider 6 denotation than Section 391 where the member or creditor or liquidator of the company can be heard. In our opinion, section 392 is not applicable, hence the decision is of no value. The learned counsel particularly relied on paragraph 14 of the decision in S.K.Gupta (supra) which reads as follows :
"14. Sub-section (2) provides the legislative exposition as to who can move the court for taking action under section 392. Reference to section 391 in sub-section (2) of section 392 merely indicates which compromise or arrangement can be brought before the court for taking action under section 392. The reference to section 391 does not mean that all the limitations or restrictions on the right of an individual to move the court while proposing a scheme of compromise or arrangement have to be read in sub-section (2) merely because section 391 is referred to therein. Unlike section 391, section 392 does not specify that a member or creditor or in the case of a company being wound up, its liquidator can move the court under section 392. On the other hand, the legislature uses the expression 'any person interested in the affairs of the company''which has wider denotation than a member or creditor or liquidator of a company. In fact, the ambit of the power to act under section 392(2) can be gauged from the fact that the Court can suo motu act to take action as contemplated by section 391(1) or it may act on an application of any person interested in the affairs of the company."
The ambit of section 392 is totally different and the cause which is sought to be espoused by the appellants in the appeals does not fall within its ambit. Once the appellants question the very settlement, provision of section 392 has no application neither it can be said that the appellants are interested in the affairs of the company as provided in Section 392. The expression "any person interested in the affairs of the company" used in Section 392 should be 7 read in the context of "satisfactory working of the agreement with or without modifications" which is not the case here. Thus, the reliance on the provisions contained in section 392(2) by the learned counsel is of no avail. The provision itself has no application and even if it is assumed that the provision is applicable, it cannot be said that the appellants are persons interested in the affairs of the company. They are simply holders of the agreement with the company and as such can reist specific performance of the agreement for sale. The appellants are not persons who are creditors or shareholders or members or such a class who may be interested in the affairs of the company. Therefore, we find that provisions of section 392 are not attracted.
Reliance placed upon the provisions contained in section 559 of the Companies Act is equally futile. Section 559 of the Act deals with the power of the court to declare that the dissolution of the company is void. In our opinion the appellants cannot have the right to question the Terms of Settlement reached between the parties as recorded by the single Judge, more so as they were not held to be necessary or proper parties as per order passed by this Court which order has been affirmed by the Supreme Court while dismissing the Special Leave to Appeal (Civil) Nos. 12473 of 2013 and 12677 of 2013 vide order dated 12-4-2013.
The Division Bench of this Court in the earlier round of litigation has already observed that it is open to the appellants to take all the pleas in the pending civil suit. Liberty has already been given to the appellants to take permissible pleas in accordance with law in the civil suit The observations made 8 in this order will not come in the way of appellants from raising any permissible objection before the Civil Court and shall not be treated as binding - they are being made only for the purpose of deciding the instant appeals.
The learned counsel for the appellants in APOT 39 of 2013 has relied upon a decision in the case of Jasbir Singh vs. Vipin Kumar Jaggi & Ors., (2001) 8 SCC 289 in which it has been laid down that once the Apex Court has granted permission to Special leave to appeal to which the appellant was not a party and the appellant has not challenged the order by which his application for intervention had been rejected. As such the appeal was maintainable. The learned counsel relied upon paragraph 11 of the decision which reads as follows :
"11. At the outset, a preliminary objection raised by Respondent No.1 is dealt with. According to the Respondent 1 this appeal has been preferred from an order passed in proceedings to which the appellant was not a party and the appellant has not challenged the order by which his application for intervention was rejected. It is contended that in the circumstances, the appeal preferred before us is not maintainable. The objection, assuming that it had some force, does not survive the order passed by this Court on 3-11-2000 granting permission to the appellant to file the special leave petition."
The facts are totally different in the instant case. The aforesaid case pertains to Criminal Procedure Code and the matter involved grant of pardon to an accused by the Court. In this case no permission has been granted to appellants to file appeal. The decision has no application. 9
The learned counsel has also relied on the decision in the case of Smt. Jalan Kumar Golcha vs. M/s. Golcha Properties (P) Ltd., (1970) 3 SCC 573 in which the matter was with respect to leasehold right without notice to the affected parties. The Apex Court has also laid down that winding up of the Company without issuing notice to affected party was not proper. The Apex Court ordered that "the order by the High Court was not proper and party should not be driven to file a suit which was the long and cumbersome procedure when order has been made directly affecting that party and redress can be had by filing an appeal which is permitted in law. It is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the Appellate Court and such leave should be granted if he would be prejudicially affected by the judgment."
It is not the case here. The property had been sold in Golcha's case That apart, in the instant case the suit is already pending before the Civil Court and requisite liberty has also been given and the earlier impleadment was disallowed on the ground that in the application, in which final order has been passed, the appellants could not be considered to be necessary or proper parties. That order has attained finality and in view of the aforesaid decision and in the facts of the case, the decision in Smt. J.K.Golcha (supra) has no application.
It was, however, submitted by the learned counsel appearing on behalf of the respondents that the appellants have no locus standi to question and raise collateral or remote challenges in the suit. In the facts of the case they cannot be said to be interested in the affairs of the company. We need not go into the 10 various submissions raised by the learned counsel appearing for the respondents as entitlement of the appellants to raise objection in the pending suit has already been given On such objection by company, order can be passed. We decline to examine the submission on merits.
Both the appeals and the connected applications are hereby dismissed. Costs of these cases are assessed at Rs.5000/- to be paid by the appellants each to the Legal Aid Services, West Bengal within a period of two weeks from date.
Photostat certified copy of this order be made available to the parties upon compliance of usual formalities.
( JOYMALYA BAGCHI, J.) ( ARUN MISHRA, C.J.) Rsg AR(CR)