Calcutta High Court
Jai Balaji Industries Ltd vs Wellman Logistics Pvt. Ltd on 4 August, 2016
Author: Indira Banerjee
Bench: Indira Banerjee, Sahidullah Munshi
ORDER SHEET
R.V.W.O. No. 28 of 2015
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
JAI BALAJI INDUSTRIES LTD.
Versus
WELLMAN LOGISTICS PVT. LTD.
BEFORE:
The Hon'ble JUSTICE INDIRA BANERJEE
-And-
The Hon'ble JUSTICE SAHIDULLAH MUNSHI
Date : 4th August, 2016.
For Appellant : Mr. Abhrajit Mitra, Sr. Adv.
with Ms. Rajshree Kajaria, Mr. Jishnu Chowdhury,
Mr. Pramit Bag & Mr. Uttam Sharma, Advs.
For Respondent : Mr. Shaunak Mitra with
Ms. Sristi Barman Roy, Mr. Siddhartha Sharma & Ms. Namrata Basu, Advs.
The respondent, Wellman Logistics Pvt. Ltd., filed a petition for winding up of the appellant company, Jai Balaji Industries Ltd., being C.P. No. 1031 of 2014.
By a judgement and order dated 26th March, 2015, the winding up petition was admitted by the learned Company Court for a principal sum of Rs.5,15,31,045/- with interest thereon at the rate of 6% per annum. The learned Company Court directed -
"If the company pays off the entire amount, together with interest, within a period of a fortnight from date, the instant petition will remain permanently stayed. In default, the winding up petition will 2 automatically stand revived and will be advertised once in "The Statesman" and once in `Bartaman'. In the advertisements to be published in the said two newspapers, it shall be indicated therein that the matter will appear before this Court under the same heading, three weeks from the date of advertisements. Publication in the Official Gazette, however, will stand dispensed with."
The appellant company filed an appeal from the said order and also filed an application for stay of operation of the order under appeal.
By an order dated 17th April, 2015, a Division Bench of the Hon'ble Justice A.K. Banerjee (as His Lordship then was) and the Hon'ble Justice Shivakant Prasad admitted the appeal and gave directions for preparation of paper books and hearing of the appeal. The admission of the winding up petition was stayed on condition that the appellant company would pay Rs.1,00,00,000/- within 24th April, 2015 and thereafter pay a further sum of Rs.2,50,00,000/- in five equal monthly instalments of Rs.50,00,000/- each, payable within the 15th of each succeeding month. In default, the stay would stand vacated.
The appellant company defaulted in making payments in terms of the order dated 17th April, 2015. On the prayer of the appellant company, this Bench passed an order dated 18th June, 2015 modifying the order dated 3 17th April, 2015 by extending the time to make payment of Rs.70,00,000/- that had fallen due.
On 13th July, 2015, the appeal appeared in the list, but was adjourned till 16th July, 2015. On 27th July, 2015, the appeal was adjourned till 3rd August, 2015 with a direction that further payment of Rs.15,00,000/- be made in the mean time. Payment in terms of the aforesaid order was not made. On 7th September, 2015, the appeal was again adjourned for one week with the direction that a sum of Rs.20,00,000/- be paid to the petitioning creditor in the mean while, failing which the appeal would stand dismissed. No payment was made in terms of the aforesaid order. Thereafter by an order dated 18th September, 2015, the appeal was dismissed. The appellant has filed this application for review of our order dated 7th September, 2015, which is set out hereinbelow -
"Adjourned for one week. A sum of Rs.20,00,000/- (Rupees: twenty lakhs) be paid to the Respondent petitioning creditor in the meanwhile, failing which the appeal shall stand dismissed."
It appears that time for payment of instalments had thrice been extended after which the order under review was passed directing that in default of payment, the appeal would stand dismissed. 4
The short question is, whether the order dated 7th September, 2015, quoted above, is a reviewable order. It is the case of the appellant company that a different winding up petition against the company has been advertised and the matter has assumed representative character. However, winding up proceedings have been stayed because of reference of the company to the Board for Industrial & Financial Reconstruction [hereinafter referred to as BIFR] under the provisions of Sick Industrial Companies [Special Provisions] Act, 1985 [hereinafter referred to as SICA].
Mr. Abhrajit Mitra, learned Senior Advocate appearing on behalf of the appellant, argued that the review might be allowed since there was misconception of facts and law, both on the part of the Court as well as the learned Advocates, who have represented the appellant on 7th September, 2015.
It was argued that instalments were being made in terms of the order of the learned Division Bench dated 17th April, 2015 and subsequent extension of time. The appeal should not have been directed to be dismissed in default of payment of instalments.
The order of the learned Division Bench dated 17th April, 2015 was an interim order pending hearing of the appeal. Interim orders can always be varried, modified and/or altered and in fact, the order has been 5 modified at the instance of the appellant to the extent the time for making further payment has from time to time been extended.
Mr. Mitra next argued that this Court ought not to have directed dismissal of the appeal itself for failure to make payments in terms of the interim order. Mr. Mitra argued that by reason of a recent Division Bench Judgement in Manoj Kumar Singh vs. New Hariyana Transport Company reported in (2015) 190 Company Cases 253 [paragraph 6], the appellant would seriously prejudiced. Mr. Mitra submitted that in the aforesaid case, the learned Division Bench held that the amount held to be outstanding at the admission stage would be binding on all concerned even after advertisements. The claims of other supporting creditors would be adjudicated. But so far as the claim of the petitioning creditor is concerned, the appellant would be bound by the order of admission. The appellant would not be able to refute the claim.
It is true that our attention was not drawn to the learned Division Bnech judgement in Manoj Kumar Singh vs. New Hariyana Transport Company [supra] and we are not aware of the same. The practice in this Court has always been different. As per the age-old practice followed by the Company Court, a claim of the petitioning creditor is adjudicated prima facie at the admission stage and later again adjudicated after advertisements along with the claims of other supporting creditors. 6
This Court proceeded on the assumption that no useful purpose would be served in keeping the appeal pending. Once the stay was vacated, advertisements would follow. The claim of the petitioning creditor against the Company would again be adjudicated after giving the Company an opportunity of hearing. Mr. Mitra argued that misconception of fact or law by the Court or an Advocate was sufficient ground for review. In this context, Mr. Mitra cited Board of Control for Cricket in India & Anr. Vs. Netaji Cricket Club & Ors. reported in 2005 (4) SCC 741. The proposition also find support from the judgment of the Supreme Court in Inderchand Jain (Dead) through LRS. Vs. Motilal (Dead) through LRS. Reported in (2009) 14 SCC 633.
On the other hand, Mr. Mukherjee appearing on behalf of the respondent submitted that no grounds had been made out by the company for review of the order dated 7th September, 2015. Mr. Mukherjee argued that merely because a decision might be erroneous in law, the same cannot be a ground for review of such decision. There must be an error apparent on the face of the record that the review would be maintainable. Reference was made to the judgment of the Supreme Court in Subramanian Swamy Vs. State of Tamil Nadu, reported in (2014) 5 SCC 75 and to the judgment of this Court in Dilip Nath Sen Vs. Certificate Officer & Ors., reported in AIR 1962 Cal 346. Mr. Mukherjee argued that 7 the grounds on which an order might be reviewed are limited. The onus is on the company to show an apparent error.
Mr. Mukherjee referred to Meera Bhanja (Smt.) Vs. Nirmala Kumari Choudhury (Smt.), reported in 1995 (1) SCC 170, where the Supreme Court held that review proceedings are not by way of the appeal and have to be strictly confined to the scope and ambit of Order 47 Rule 1 of the Civil Procedure Code. The review petition can be entertained only on the ground of error apparent on the face of the record and not on any other ground. An error apparent on the face of the record must be such an error which must strike one on mere looking at the record and would not require any long-drawn process of reasoning on points where there may conceivably be two opinions. The limitation of powers of Court under Order 47 Rule 1 of the Code of Civil Procedure is similar to the jurisdiction available to the High Court while seeking review of orders under Article
226. It is true that we were not aware of the judgment. However, there appears to be difference of opinion on the question of whether the Company is completely debarred from resisting the claim of the petitioning creditor at the post-advertisement stage. It does not appear that the appellant will suffer any real prejudice since they will be able to agitate their contentions at the post-winding up stage.
8
It is well settled that in the garb of considering review of a judgment and order, we cannot embark upon a rehearing to change a decision and pass a fresh order. The order may be erroneous. The remedy, however, lies by way of an appeal and not by way of a review.
The application for review is, therefore, rejected.
(INDIRA BANERJEE, J.) (SAHIDULLAH MUNSHI, J.) K. Banerjee & C. Sinha A.Rs. [C.R.]