Calcutta High Court
Rei Agro Ltd vs Ubs Ag & Ors on 27 January, 2015
Author: Biswanath Somadder
Bench: Biswanath Somadder
ORDER SHEET
CA No.786 of 2014
With
CP No.1122 of 2014
IN THE HIGH COURT AT CALCUTTA
Original Jurisdiction
ORIGINAL SIDE
IN THE MATTER OF :
REI AGRO LTD.
AND
UBS AG & ORS.
BEFORE:
The Hon'ble JUSTICE BISWANATH SOMADDER
Date : 27th January, 2015.
Mr. Sudipto Sarkar, Sr.Advocate, Mrs. Moushumi Bhattacharya, Mrs. Smita Mukherjee, Mr.Udit Mendiratte, Advocates for the petitioners Mr. S. N. Mukherjee, Mr. Tilak Kr. Bose, Sr. Advocates, Mr.Saunak Mitra, Mr. S.Chowdhury, Mr. D. Ghosh, Mr. M. Manot, Advocates for the company.
The Court : At the time of the petitioners obtaining leave under Rule 21 of the Company (Court) Rules, 1959 (hereinafter referred to as the said "Rule"), the learned senior advocate representing the company objected to such leave being granted by this Court. He referred to the scope of the said Rule and some judgments of the High Courts and also a judgment rendered by the 2 Supreme Court. He submitted that the instant petition has not been verified in accordance with the provision contained under the said Rule and that it has been held by this Court in Gaya Textiles Private Ltd. etc. and Star Textile Engineering Works Ltd., reported in AIR 1968 Calcutta 388, to the effect that if a verification was defective, the Court could not make an order for winding up of a petition and re-verification of a winding up petition cannot be allowed. He also referred to a judgment of the Punjab and Haryana High Court, rendered in the case of Mool Chand Wahi Vs. National Paints P. Ltd. and Another, reported in Vol.60 Company Cases 198, where a question came up for consideration as to whether the affidavit in support of the petition was in proper form and if not, with what effect. He submitted that while dealing with this question, the Punjab and Haryana High Court followed the ratio of the decision rendered by this Court in Gaya Textiles Private Ltd. (supra) and held that in case of a petition for winding up of a company, if a winding up order is passed, it relates back to the date of the presentation of the winding up petition. If on the date when the petition was presented, there was no proper verification according to law, then there was no petition at all on which the Court could issue directions for advertisement. He, thereafter, referred to a Division Bench judgment of the Punjab and Haryana High Court rendered in the same matter [Mool Chand Wahi Vs. National Paints (Private) Ltd. and Another] reported in Vol. 60 Company Cases 402, wherein the Division Bench upheld the view taken by the learned Single Judge. He also relied on a decision rendered by the Allahabad High Court in the case of Tayal Potteries and Another Vs. Macroplast Pvt. Ltd. reported in Vol.103 Company Cases 404. 3 Relying on the aforesaid decision, he submitted that the provision of Rule 21 was mandatory in nature. Lastly, he referred to a judgment of the Supreme Court rendered in the case of Janki Vashdeo Bhojwani and Another Vs. Indusind Bank Ltd. and Others, reported in (2005) 2 Supreme Court Cases 217 and submitted that if a power of attorney holder rendered some "acts" in pursuance of a power of attorney, he may depose for the principal in respect of such acts, but cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined. While referring to the aforesaid judgment of the Supreme Court, he also relied on paragraph 6 of the affidavit verifying the instant petition and submitted that it would appear therefrom that other than paragraph 1 of the petition - which has been verified as true to the respective knowledge of the power-of-attorney holders - those contained in paragraphs 2 to 80 of the winding up petition are based on information derived from record and believed by each of the power-of-attorney holders to be true and those contained in paragraphs 81 to 93 of the petition, being their respective submissions before the Court. Thus, the manner in which the instant petition has been verified, it would be quite evident therefrom that the power of attorney holders have deposed for the principals for the acts done by the principals not by the power of attorney holders.
On the other hand, the learned senior advocate representing the petitioning creditors referred to and relied on the said Rule and in particular, 4 Form no.3 provided under the said Rule. He submitted that if one barely glances at Form no.3, it would appear therefrom that it provides as to how an affidavit verifying a winding up petition is to be made. He, thereafter, referred to the affidavit verifying the instant petition and submitted that the same has been made in accordance with Form no.3, as provided under the said Rule. He also sought to distinguish the judgments of the High Courts, including the judgment of the Supreme Court and submitted that for the purpose of obtaining leave under Rule 21 of the Company (Court) Rules, 1959, all that his clients are required to do is to satisfy the Court that the person who is making and affirming the affidavit verifying the petition, was duly authorised by his clients to do so.
After considering the respective submissions, it is necessary to refer to the provision as contained under Rule 21 of the Company (Court) Rules, 1959, which is setout hereinbelow:
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.
On a bare perusal of the provision of law, as referred above, it appears that the same provides the manner in which a petition is required to be verified by an affidavit which shall be filed along with the petition. It clearly 5 provides that such affidavit shall be in Form No.3. The proviso makes it clear that the Judge or the Registrar may, for sufficient reason, grant leave to any other person - duly authorised by the petitioner - to make and file the affidavit in support of a petition.
In the fact of the present case it is noticed that the affidavit verifying the instant petition is clearly in consonance with Form no.3, as required under Rule 21 of the Company (Court) Rules, 1959.
None of the judgments of the High Courts, which have been referred to on behalf of the company, have been rendered at the preliminary stage, before a winding up petition is taken up for consideration on its merit, and as such, are clearly distinguishable. So far as the judgment of the Supreme Court is concerned, the same was rendered in the context of interpretation of the word, "acts", as provided under Order 3 Rules 1 and 2 of the Code of Civil Procedure, in its relation to exercise of power by a power of attorney holder.
In the facts of the instant case, at this preliminary stage, all that the Court is required to do has been clearly stated under the proviso contained under Rule 21 of the Company (Court) Rules, 1959.
As such, the question that now comes up for consideration is whether the Court can grant leave to the persons who have sworn the affidavit verifying the instant winding-up petition, as being "duly authorised" to do so by the petitioners. This Court is of the view that in the facts and circumstances of the instant case, before such leave under Rule 21 of the Company (Court) Rules, 1959, is granted in favour of those persons, it is necessary for it to be satisfied 6 that that all of them have been "duly authorised" by the petitioning-creditors to make and file the affidavit in support of the instant petition on their behalf. As such, the deponents are directed to satisfy this Court that they were "duly authorised" by the petitioning creditors to make and file the affidavit verifying the instant winding-up petition, by producing valid resolutions adopted by the Board of directors of the petitioning-creditors supported by powers of attorney given in their favour by the petitioning-creditors. Let such documents be produced before this Court on 29th January, 2015.
Urgent photostat certified copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(BISWANATH SOMADDER, J.) pa/kc.