Calcutta High Court
Bangeswari Cotton Mills Ltd. vs Dhanrajmal Govindram And Ors. on 4 October, 1966
Equivalent citations: AIR1967CAL595, AIR 1967 CALCUTTA 595
JUDGMENT Banerjee, J.
1. On the application of respondent No. 1 (hereinafter referred to as the petitioning creditor), Datta. J. made an order, dated June 24, 1966. for the winding up of that applicant company Bangeswari Cotton Mills Ltd.. under the provisions of the Companies Act.
2. The applicant states that, on June 29, 1966 (not June 24, 1966 as wrongly stated in paragraph 21 of the petition), the court clerk of the applicant's the then solicitors, Messrs. T. C. Roy and Co. applied for certified copy of the judgment as well as of the order. He did not, however, at that time, put in the requisition for the completion of the order under the mistaken belief, as the court clerk said, that the solicitor for the petitioning creditor must have put in the requisition On August 6, 1966, the said court clerk made enquiries about certified copies and came to learn that nobody having had made any requisition for the drawing up of the order, the same was not drawn up and as such certified copies were not ready. The court clerk of Messrs. T. C. Roy and Co. has filed a supporting affidavit in corroboration of the above statement by the applicant.
3. The applicant company obtained a change of attorney in the meantime and their new solicitor put in a requisition for the drawing up of the order, on August 10. 1966, with the leave of the Court
4. On the same day, the applicant's solicitor took out a notice of motion, inter alia, praying for leave to file the memorandum of appeal without the certified copy of the order, upon the undertaking to file the same as soon as obtained; for condonation of the delay in submitting the requisition for drawing up of the order; if necessary for extension of the time to file the appeal: for interim injunction and for other reliefs.
5. On behalf of the petitioning creditor it was contended that the appeal was barred by limitation and sufficient cause for not proferring the appeal within the prescribed period of limitation had not been made out.
6. Now, under Article 117 (sic) of the Limitation Act, 1963, the period of limitation for preferring an appeal from a decree or order of any High Court to the same Court is ninety days from the date of the decree or order. Under Rule 2, in Chapter XXXI of the Original Side Rules, the memorandum of appeal is to be accompanied by a copy of the decree or order appealed from. Section 12 of the Limitation Act, dealing with the exclusion of time In legal proceedings, provides for exclusion of the time requisite for obtaining a copy of the decree or order appealed from and reads as follows:
"(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded.
(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree sentence or order appealed from or sought to be revised or reviewed shall be excluded (3) Where a decree or order is appealed from or sought to be revised or reviewed, or where an application is made for leave to appeal from a decree or order, the time requsite for obtaining a copy of the judgment on which the decree or order is founded shall also be excluded (4) * * * ** Explanation In computing under this section the time requisite for obtaining a copy of a decree or an order, any time taken by the court to prepare the decree or order before an application for a copy thereof is made shall not be excluded "
7. Reiving upon Sub-section (2) of Section 12, read with the explanation, it was contended on behalf of the applicant that the applicant was entitled, after the making of the application for a certified copy of the order on June 29, 1966 to the exclusion of the time to be taken by the Court in preparing the order and also the time to be consumed in granting such a copy Since the copy was not yet granted, it was contended that the applicant's appeal was still in time.
8. This argument was sought to be repelled with the contention that the failure on the part of the applicant to put in requisition for the drawing up of the order made the application for copy of the order an infructuous application and the applicant did not become entitled to exclusion of time under Section 12(2) read with the explanation in the Limitation Act. Inspiration for this argument was drawn from Rule 27. In Chapter XVI of the Original Side Rules, which reads as follows:
"Except as otherwise provided in the rules, or unless otherwise ordered, application shall be made for the drawing up of every decree and order, other than an order directing a person to furnish security, by requisition to the Registrar in writing by the party in whose favour the decree or order was made within three days from the date of the decree or the order, or, in default of his applying within such time, by any party within seven days from the date of the decree or order. In the case of an order directing a person to furnish security such application shall be made by requisition in writing by the party in whose favour the order was made by 2 P. M. of the day following the date of the order, or in default thereof, by the party who is to furnish the security by 4-30 p.m. of the day following the date of the order. If such application for drawing up a decree or order is not made within the time aforesaid, the decree or order shall not be drawn up except under order of the Court or a Judge to be obtained, unless otherwise ordered, by petition ex parte. The costs of the application, for obtaining such order and those of drawing up and completing the decree or order shall be in the discretion of the Court or a Judge."
9. In re-inforcement of this argument reliance was placed by the learned counsel for the petitioning creditor, on Pramatha Nath Roy v. Lee. 49 Ind App 307= (AIR 1922 PC 352): J. N Surty v T. S. Chettyar. 56 Ind App 161 = (AIR 1928 PC 103); In the Goods of Pashupati Mukherjee Secy of State for India in Council v Parija Debi . Briflal Ganeriwalla v Girindra Shekhar ; Sudhansu Bhusan Pandey v. Mafho Bibi. ; Jayashankar v. Maya Bhai Lalbhai, (FB) and Charity Commr v Padmavati.
10. In the case of 49 Ind App 307= (AIR 1922 PC 352 (supra) there was an order made on July 26, 1918. No step was immediately taken by the plaintiff appellant to have the order drawn up but, after the lapse of four days it was competent for the defendant respondent to apply for that purpose The four days elapsed and nothing was done. On August 6 an application was made by the plaintiff appellant to have the order drawn up and on August 7, the draft order was sent to the plaintiff appellant, who returned the order approved by him on August 16 The order was signed on August 28 and filed by the plaintiff appellant on September 3, 1918 The memorandum of appeal was presented in the meantime, on 30-8-1918 without the order This memorandum was rejected as time barred In this context Lord Buckmaster observed.
"Now the learned Judges in the Appeal Court have held that in determining what is the requisite time referred to in Section 12 subsection (2) of the Limitation Act the conduct of the appellant must be considered and their Lordships think that in so determining they have rightly regarded the statutory provision. In their Lordships' opinion, no period can be regarded as requisite under the Act which need not have elapsed if the appellant had taken reasonable and proper steps to obtain copy of the decree or order. In the present case he took none, and the periods between July 30 and August 6, and again between August 7 and August 16, which were within the appellant's control, are sufficiently great to prevent the appellant saying that the time that did elapse must have elapsed even if he had acted with reasonable promptitude."
In that view their Lordships affirmed the opinion of the High Court that the appeal was time-barred.
11. In the case of 66 Ind App 161= (AIR 1928 PC 103) (supra), explaining the meaning of the word "requisite" in Section 12(2) of the Limitation Act, Lord Phlrllmore observed:
"The word 'requisite' is a strong word; it may be regarded as meaning something more than the word 'required'. It means properly required and there thrown upon the pleader or counsel of the appellant the necessity of showing that no part of the delay beyond the prescribed period, is due to his default."
11a. Following the law laid down in 55 Ind App 161=(AIR 1928 PC 103) (supra) a Full Bench of this Court observed in the case entitled (supra):.
"The appellant is as of right, entitled to the exclusion of such time as is properly required for the drawing up of the decree or order, assuming that no part of the delay, if any, is due to his default. In other words, if the delay in obtaining a copy is due to the laches of the appellant, he cannot claim the benefit of this provision for exclusion of the time required for obtaining a copy of the decree or order."
12. In the case of 38 Cal WN 702= (AIR 1934 Cal 848) (supra) it was further observed:
"It is now established that it is not sufficient to say that there is no decree or order in existence of which a copy can be obtained. The principle upon which the judgments have proceeded is that any delay in obtaining a copy of the decree or order for which delay the appellant is 'responsible is not to be excluded in computing !he time requisite for obtaining such a copy."
13. The decision in Suddansu Bhusan Pandey (supra) does also lay down the same proposition.
14. The Bombay High Court's view on this point is the same as expressed by the Calcutta High Court in (supra) Reference in this context may also be made to the case of (FB) and . In the last mentioned case Chagla C. J further observed that in the Original Side of the High Court the practice was entirely different, it being incumbent upon the attorney to draw up an order if he wanted a certified copy thereof. His Lordship also observed that if the appellant was guilty of negligence in taking the necessary steps for the purposes of getting the order drawn up, his inaction disentitled him to any extension of time for the filing of an appeal.
15. As against the above contention and authorities cited in support the of, the learned counsel for the applicant came out with a two-fold reply its submitted in the first place, that the old Limitation Act of 1908 did not contain any provision similar to the explanation to Section 12 of the I imitation Act of 1963 and the authorities cited by the learned counsel for the petitioning creditor, having had been decided under the old Limitation Act of 1908 were of irrelevant consideration in the present context. In other words, he submitted, that under the explanation to Section 12 of the new Limitation Act the entire lime taken by the Court to prepare the decree or order, after an, application for copy thereof has been made, shall be excluded, -- the time consumed prior to such applies lion only need be ignored. He submitted, in the next place, that under Rule 111(1) of the Companies (Court) Rules. 1959 it was the duty of the Registrar to draw up the order for winding up as soon as possible, and he need not wait for a formal requisition by a party for the drawing up of the order. Rule 111(1) referred to above is set out below:
"(1) The order for winding-up shall be drawn up by the Registrar as soon as possible, and after it is signed and sealed, two certified copies thereof duly sealed shall be sent to the Official Liquidator The order shall be in Form No 52 with such veriations as may be necessary-"
Thus, it was submitted, the entire time consumed in the drawing up of such an order after the making of an application for copy, should be excluded under the explanation to Section 12 of the new Limitation Act.
16. The first part of the above argument was sought to be met on behalf of the petitioning creditor by placing reliance on a Bench decision of this Court in Addl. Collector of Customs v. Best and Co., , in which B. C. Mitra J. (H. K. Bose C. J. agreeing with him) held that under Section 12 of the Limitation Act 1963 the time requisite for obtaining a copy of the order is no doubt to be excluded but such exclusion can be allowed if and only if a copy of the same was annexed to the petition for leave to appeal to the Supreme Court But, if in fact, the petition could be moved and was moved without a copy of the order, there was no excuse for the delay in moving the application beyond the period of limitation. Now, if this judgment had been a correct judgment, what was said about an application for leave to appeal to the Supreme Court would have been equally true of a memorandum of appeal Unfortunately, for the petitioning creditor, this judgment stands reversed by the Supreme Court In Civil Appeal No. 275 of 1966. Addl. Collector of Customs, Calcutta v. M/s. Best and Co.. un-reported= (since reported in) in which Shelat J., in delivering the judgment of the Court, observed:
"(a) Two views were, however, canvassed before us on the construction of Section 12. One was that the right of exclusion of time is qualified by the words 'time requisite for obtaining a copy of the decree, sentence or order' in Sub-section (2). Therefore, if an application for leave to appeal does not require a certified copy of the order in question to be annexed to the application, it is not possible to say that the time required for obtaining such a copy was requisite, in such cases the time in obtaining the copy would not be requisite time and consequently the applicant would not be entitled to exclude the time taken in obtaining the certified copy of the order. Certain decisions of some of the High Courts have also taken the view that such an applicant would not be entitled to the benefit of the sub-section where a copy of the decree, judgment or order is not actually annexed to the application or the memorandum of appeal. The other view is that Sub-sections (2) and (3) of Section 12 enact the rule of exclusion as a positive direction. The object of the sub-section being to afford a party opportunity to consider his position even where a certified copy of the judgment gives all the necessary information enabling the party to decide to proceed further or not he would nevertheless be entitled to exclude the time for obtaining the certified copy of the decree or order. it has been held In some decisions that even in cases where it is not necessary to prepare a formal order, if such an order is prepared, the party would be entitled to the benefit of exclusion of time taken in preparing and furnishing a copy thereof where it is applied for
(b) We shall deal with the second contention first as it is capable of an easy disposal, Rule 4. in Chapter XXXIII-A of the Rules of the High Court requires that an application for leave to appeal shall be made by a notice of motion before the appellate court and shall be presented in the prescribed form, viz.. Form No. 3 That form does not require that a certified copy of the judgment and/or decree or order need e annexed to such an application. The rule and the form thus enable a party to file an application for a certificate without annexing either a copy of a judgment or a copy of an order. But that does not mean that the rule and the form lay down any mandatory direction that a copy either of thp order or of the judgment shall not be annexed. The rule and the form thus do not assist or further the argument urged by counsel for the respondents In regard to his first contention the learned counsel for the respondents urged that Subsections (2) and (3) of Section 12 would not apply where it is not necessary to annex a copy of the judgment or order. For. In such a case it is not possible to say that the time taken in obtaining such a copy is time 'requisite' within the meaning of that expression in Sub-section (2) of Section 12. Exclusion of the time required in obtaining a copy of the order therefore can only be allowed if and only if, such a copy is either required to be annexed or in any event is in fact annexed to the petition for leave to appeal. The question is: is the provision for exclusion of time in Section 12(2) dependent upon whether the rules of a court permit a petitioner to file an application for leave with or without a copy of the judgment or order or decree and also where the rules so permit whether he has annexed such a copy to his application? In 55 Ind App 161 = (AIR 1928 PC 103) the Privy Council after considering various decisions of different High Courts held that (1) the preponderance of practice in India was that lime for obtaining a copy of the judgment or decree or order should be excluded even though under the rules of the Court it was not necessary to obtain a copy of the judgment or decree to be filed with the memorandum of appeal, and (2) that on a grammatical construction of Section 12(2) the sub-section plainly lays down a positive direction for exclusion of time without any reference to the Code of Civil Procedure or any other Act.
(c) The legislature allowed the exclusion even though the rules of a court might not require a copy to he annexed to the memorandum of appeal for a party who intends to file an appeal may desire to examine the decree or the judgment before he launches a further proceeding. Therefore, the exclusion was allowed irrespective of the rules of a court which permit a party to file an appeal without annexing a certified copy of the judgment or decree or order
(d) As the Privy Council has laid down the provisions of Section 12 (2) and (3) are a positive direction excluding the time taken in obtaining a copy of the judgment and decree or order as the case may he and those provisions are irrespective of the Code of Civil Procedure or the rules made by a Court under Section 122 of the Code, such rules if they permit a memorandum of appeal to be filed without annexing thereto a copy of the judgment or decree of order confer a privilege on a would-be appellant but do not govern the positive direction contained in Section 12. The High Court in this view, therefore, was not right in dismissing the petitioners' application for leave to appeal on the ground that it was barred by limitation " Thus, the attempt on the part of the petitioning creditor respondent to meet the first part of the argument advanced on behalf of the appellant fizzles out
17. The second part of the argument was sought to be met by placing reliance on Rule 6 in Part I of the Companies (Court) Rule 1959 which reads as follows:
"Save as provided by the Act or by these Rules, the practice and procedure of the Court and the provisions of the Code so far as applicable, shall apply to all proceedings under the Act and these Rules. The Registrar may decline to accept any document which is presented otherwise than in accordance with these Rules or the practice and procedure of the Court."
What was contended before us was that, notwithstanding anything contained in Rule 111 of the Companies (Court) Rules, 1959. the Registrar shall not draw up an order for winding up unless there was a proper requisition made. This contention merits detailed consideration.
18. Rule 37(1), in Part I of the Companies (Court) Rules. 1950 contains the general provisions that every order, made by a Company Judge , whether in Court or in Chamber, shall be drawn up by the Registrar. The said Rule reads as follows.
"Every order, whether made in Court or in Chambers, shall be drawn up by the Registrar, unless in any proceeding or class of proceedings the Judge or the Registrar shall direct that the order need not be drawn up. Where a direction is given that no order need be drawn up the note or memorandum of the order signed or initialled by the Judge making the order or by the Registrar shall be sufficient evidence of the order having been made. The date of every order shall be the date on which it was actually made, notwithstanding that it is drawn up and issued on a later date"
Rule 111(1), in Part III. repeats the similar provisions with particular reference to winding up orders Nevertheless. Rule 6, which has been already quoted, saves the practice and procedure of this Court save as otherwise provided by the Companies Act and the Companies (Court) Rules.
19. Turning now to the provisions of the Companies Act we find that Section 444 provides:
"Where the Court makes an order for the winding up of a company, the Court shall forthwith cause intimation thereof to be sent to the Official Liquidator and the Registrar."
19a. Section 445 (1) and (1A) further provides:
"(1) On the making of a winding up order, it shall be the duty of the petitioner in the winding up proceedings and of the company to file with the Registrar a certified copy of the order. within one month from the date of the making of the order If default is made in complying with the foregoing provisions the petitioner, or as the case may require, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one hundred rupees for each day during which the default continues (1A) In computing the period of one month from the date of the making of a winding up order under Sub-section (1). the time requisite for obtaining a certified copy of the order shall be excluded "
Thus, the Act provides for the immediate communication of the winding up order to the Official Liquidator and to the Registrar of Companies before the order is drawn up and also provides for filing of the certified copy thereof, by the petitioner in the winding up proceeding with the Registrar of Companies Rule 109 of the Companies (Court), Rules prescribes the procedure for sending notices to the Official Liquidator in the following language:
"Where an order for the winding-up of a company or for the appointment of a Provisional Liquidator has been made the Registrar shall forthwith send to the Official Liquidator of the Court notice of the order under the seal of the Court in duplicate in Form No. 50 as the case may be together with a copy of the petition and the affidavit if any filed in support thereof."
20. The question that calls for our decision is whether the provisions of the Act and of the Rules are consistent with the practice and procedure that prevail in this Court and as such are saved by Rule 6 of the Companies (Court) Rules Now. the practice and procedure that prevail in this Court can be ascertained from Rule 27 in Chapter XVI already quoted, providing for requisition for drawing up of the decree or order and Rule 71A, in appendix 7 of the Original Side Rules, which reads us follows:
"When an order for the winding up of a company by the Court has been made:
(i) The petitioner or his attorney shall forthwith by letter send to the Official Liquidator notice of the making of the order.
(ii) In the High Court, a copy of the minutes of the order shall immediately be sent by the principal officer in attendance to the Registrar. The petitioner or his attorney shall forthwith make an application for the drawing up of the order by requisition to the Registrar in writing on payment of the usual fees, and the Registrar shall thereupon cause the order to be drawn up with expedition
(iii) The Registrar shall, as soon a possible, send to the Official Liquidator a copy of the order sealed with the Seal of the Court
(iv) * * * *
21. In our opinion, there is no repugnancy between the practice and procedure prevailing in this Court and the provisions of the Companies Act and the Companies (Court) Rules. Thus, although Rule 37(1) in Part I and Rule 111(1) in Part III of the Companies (Court) Rules require the Registrar of this Court to draw up the order, the provision as to requisition for the drawing up of such an order, as in Rule 27 in chapter XVI and Rule 71A in Appendix 7 of the Original Side Rules, does not stand excluded In other words the Registrar shall draw up the order only on requisition properly made The provisions of Rule 27 in Chapter XVI and Rule 71A in appendix 7. in our opinion, thus stand saved by the operation of Rule 6 of the Companies (Court) Rules This view finds further support from the language of Section 448(lA) of the Companies Act which provides for exclusion of time requisite for obtaining a certified copy of the order in computation of the period of one month within which the petitioner must file the certified copy of the order to the Registrar of the Company.
22. Thus, the legal position is as follows:
(I) Although a memorandum of appeal may be filed without a certified copy of the order or the decree, with the leave of the Court, on an undertaking to annex the certified copy thereof to the memorandum, as soon as obtained, the appellant is till then entitled to exclusion of the time requisite for obtaining the certified copy on computation of the period of limitation (II) The words "time requisite" in Section 12(b) of the Limitation Act, 1963 have the same meaning as they had under the Limitation Act, 1908, as explained in 49 Ind App 307= (AIR 1922 PC 352); 55 Ind App 181 = (AIR 1928 PC 103); ; 38 Ca] WN 702= (AIR 1934 Cal 543); Sudhansu Bhusan Pandey v, Majho Bibi ; (FB) and .
(III) Thus the time requisite for obtaining a certified copy of the decree or order, minus the time consumed by appellant's own default for not having the decree or order drawn up, should only be excluded in computing the period of limitation.
(IV) The explanation, to Section 12 of the Limitation Act of 1963 certainly means that the time taken by the Court for preparing the decree or order, after an application for copy of the decree or order has been made, shall be excluded. But this exclusion of time does not Include, in it s ambit, the period consumed by a party by not putting in the requisition for the drawing up of the order or decree af'ter the making of an application for a certified copy In other words, where the decree or order can be prepared without any step being taken by a party, the entire period after the making of an application for copy by him may a excluded in the computation of the period of limitation for an appeal But where a Court cannot prepare a decree or order unless the party takes certain steps the period un necessarily consumed by the party in taking thai step does not enure to his benefit and does not count onwards the period taken by the Court for preparing the decree or order The time taken by the Court in preparing the decree of order means the time taken after the Court was moved by the party to prepare the decree or order, where such a move is necessary under the law (V) That move, in our opinion, is still necessary under the Original Side Rules, even in respect of winding up orders and notwithstanding the provisions contained in Rules 37(1) and 111(1) of the Companies (Court) Rules This is so by reason of the provisions of Section 6 (sic) which saves the provisions of Rule 27 in Chapter XVI and Rule 71A in appendix 7 of the Original Side Rules
23. Although this is the legal position, the applicant was not at fault in the circumstance of this case Rule 27 in Chapter XVI of the Original Side Rules operates save as otherwise provided in the Rules. That other provision is in Rule 71A, appendix 7, which makes it the duty of the petitioner for winding up to have the order drawn up on due requisition. Thus, if the applicant did not put in the requisition at first, which however he did later on with the leave of the Court, the time lost was not due to his laches Thus in one view of the matter, the time consumed by the inaction of the petitioning creditor, in the matter of drawing up of the order, does not work to the disadvantage of the applicant. In that view the appeal is not vet time-barred because the applicant made application for copies and also put in the requisition both within ninety days of the order and the applicant became entitled to the exclusion of the time thereafter. In any view, there was sufficient reason to excuse the delay, if any, which of course we doubt We, therefore, make an order in terms of prayer (a) alternatively in terms of prayer (b) and also in terms of prayer (c) of the petition.
24. Now we come to the other prayer of the petition, namely, for an interim injunction restraining the respondent from giving effect to the order, dated June 24, 1966. pending the disposal of the appeal This in the facts and circumstances of this case may be allowed only on terms we therefore, direct-
(a) that there will be an unconditional interim order until the time indicated hereunder in clause (b):
(b) if within a period of three months from today, the applicant furnishes security for rupees six lacs, to the satisfaction of the Registrar of this Court the injunction will continue till the disposal of the appeal Liberty is given to the Registrar to accept properties outside the original jurisdiction of this Court as security
(c) notwithstanding anything contained in Clauses (a) and (b) above, the applicant shall be only entitled to carry on day to day business of the company and not to deal with or encumber the properties of the company except as aforesaid.
(d) in default of conditions as in Clauses (b) and (c) above the order of interim injunction shall stand vacated;
(e) the hearing of the appeal is expedited and the settlement of index is dispensed with. Liberty to the appellant to prepare the requisite number of cyclostyled copies of the paper book and to file the same within January 3, 1967
25. Liberty to mention.
26. Costs of this application shall be costs in the appeal
27. Let the order be drawn up as ex-peditiously as possible including the order appealed against Masud, J.
28. I agree