Calcutta High Court
Hbr Sales Private Limited vs Unknown on 21 January, 2011
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
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IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
IN APPEAL FROM ORIGINAL JURISDICTION
ORIGINAL SIDE
PRESENT :
The Hon'ble Mr. Justice PINAKI CHANDRA GHOSE
And
The Hon'ble Mr. Justice ASIM KUMAR RAY
A.P.O.T. No. 395 of 2010
A.C.O. No. 98 of 2010
G.A. No. of 2010
C.A. No. 279 of 2010
C.P. No. 238 of 2009
In the matter of :
HBR Sales Private Limited
And
In the matter of :
HBR Trexim Pvt. Ltd.
For the Appellant : Mr. Abhrajit Mitra, Adv.
Mr. S. Ray Chowdhury, Adv.
Mr. Dilip Kr. Ghosh, Adv.
Mr. Jayanta Datta, Adv.
Heard on : 15.07.10, 19.07.10, 26.07.10 & 29.07.10
Judgment on : 21.01.2011.
PINAKI CHANDRA GHOSE, J.: This appeal is directed against an order passed by the
Hon'ble First Court on 28th April, 2010 on an application being filed before the Court for
enlargement of the time to file the certified copy of the sanctioned scheme with the Registrar of
Companies beyond the permitted time.
It appears that the matter was mentioned before the Company Court when the Court
declined to condone the delay. Hence, a formal application was filed on 22nd March, 2010.
The Hon'ble Company Court after hearing the parties dismissed the application filed by
the appellant when His Lordship held as follows :
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"Upon the applicants not filing the certified copy of the order sanctioning the scheme
within a month of the date of receipt thereof, a presumption arose that these applicants had
abandoned the same. The applicants could have rebutted the presumption in the present
application or in the supplementary affidavit that was permitted to be filed. The applicants
have not addressed such matter in either the application and the supplementary affidavit.
The time limit fixed by a statute or by statutory rules cannot be flagrantly flouted nor can
the Court be expected to condone such conduct without any plausible explanation being
furnished".
Being aggrieved and dissatisfied with the said order this appeal has been filed by the
appellants.
The facts of the case briefly are as follows :
On 21st July, 2009 the Hon'ble Court was pleased to sanction the scheme of
amalgamation and directed the appellant to file certified copy thereof with the Registrar of
Companies within thirty days. On 22nd July, 2009 the appellant's advocate-on-record had put in
the requisition for obtaining three sets of xerox certified copies of the said order dated 21st July,
2009. It is stated that due to the inadvertence of the clerk of the advocate-on-record Photostat
signed copies were obtained instead of certified copies thereof.
Thereafter fresh requisitions were put in and on 25th November, 2009 certified copies of
the orders were obtained since the period of thirty days as stipulated of the order dated 21st July,
2009 was lapsed. The Registrar of Companies refused to accept the certified copies.
The learned Counsel appearing on behalf of the appellant drew our attention to Rule 81 of
the Companies (Court) Rules which deals with a situation where the Court sanctioned the scheme
and inter alia states that the certified copy shall be filed with the Registrar of Companies within
14 days from the date of the order or within such time as may be fixed by the Court.
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The Rule 7 of the said Rules empower the Court to enlarge or abridge the time fixed by an
order of Court. The said Rule 7 provides as follows :
"Rule 7: Power of Court to enlarge or abridge time.
The Court may, in any case in which it shall deem fit, extend or abridge the time
appointed by these Rules or fixed by an order of the Court for doing any act or taking any
proceeding, upon such terms (if any) as the justice of the case may require, and any such
enlargement may be ordered although the application for the same is not made until after
the expiration of the time appointed or allowed".
It is also necessary for us to quote the Rule 81 which is also set out hereunder :
"Rule 81 : Order on petition.
Where the Court sanctions the compromise or arrangement, the order shall include
such directions in regard to any matter and such modifications in the compromise or
arrangement as the Judge may think fit to make for the proper working of the compromise or
arrangement. The order shall direct that a certified copy of the same shall be filed with the
Registrar of Companies within 14 days from the date of the order, or such other time as may
be fixed by the Court. The order shall be in Form No. 41, with such variations as may be
necessary."
Therefore, it is the contention of the learned counsel of the appellant that this Hon'ble
Court has power to extend the time stipulated by the order dated 21st July, 2009. It is further
submitted that the learned Judge has come to the conclusion that by not filing the certified copy
of the order within one month from the date of receipt a presumption arises that the applicants
had abandoned its right to file the order with Registrar of Companies. The learned Judge has not
stated under what law such presumption arises. On the other hand, Rule 7 of the Companies
Court Rules expressly empowers the Court to enlarge the time fixed by an order of Court for doing
any Act. With this Rule, there cannot be a presumption that after expiry of 30 days it is deemed
that the applicants have abandoned their right to file the certified copy.
The learned Judge ought to have considered Sections 115 to 117 of the Evidence Act
before laying down the law that a presumption arises that after 30 days the applicants
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abandoned their right to file the certified copy of the order with the Registrar of Companies; In
law there is no such presumption.
He further submitted that the learned Judge without in any manner dealing with the
explanation given by the appellant for extension of time to file the said order with the Registrar of
Companies has brushed aside the same by saying that "no explanation worth its name has been
proffered".
He further submitted that the Hon'ble Court failed to take note of the fact that the order
dated 21st July, 2009 sanctioning the scheme subsists and remains in force. By virtue of not
granting extension of time to file certified copy of the order with the Registrar of Companies, this
valid and subsisting order of this Hon'ble Court cannot be given effect to.
He further submitted that in case of extension of time the recent trend of judgments are in
favour of granting such extension by applying the principle that rules of procedure are made to
advance the cause of justice and not to defeat it. Even when the First Court refuses to grant
extension, the Higher Courts have granted extension without applying the strict principles
applicable to interfere with discretionary orders. He relied upon the following decisions :
1. Zolba Vs. Keshoo, 2008(11) SCC 769 paras 16 and 17;
2. Sambhaji Vs. Ganga Bai, 2008(17) SCC 117 paras 7 and 8;
3. Unreported judgment of the Division Bench of this Hon'ble Court dated 30th
April, 2010, in National Bank Ltd. Vs. Dulai Kanti Chowdhury (paras 11 to
13).
It is submitted that in the instant case due to the advertence of the clerk of the Advocate-
on-Record the certified copy of the order dated July 21, 2009 could not be filed with the Registrar
of Companies within the prescribed time. It is trite law that a party cannot be made to suffer due
to the lapses on the part of the Advocate-on-Record or his office.
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He relied upon the following decisions :-
1. Rafiq & Anr. Vs Munshilal & Anr. reported in AIR 1981
SC 1400 (Para 3);
2. National Bank Vs. Dulal Kanti Chowdhury (Para 11 to 13);
It is pointed out that the Registrar of Companies itself had consented to the sanctioning of
the scheme and the same would be evident from a perusal of the order dated 21st July, 2009. If
the prayer of the appellant for condoning the delay is allowed the Registrar of Companies will
suffer no prejudice. Before the Hon'ble First Court also the Registrar of Companies was not a
party when the application was moved.
However, in the light of the observations of the Hon'ble Division Bench, the stay petition
and the appeal were served on the Registrar of Companies on 27th July, 2010 by hand and on
16th July, 2010 the appeal and stay petition had also been forwarded by speed post. Inspite of
service none appeared for the respondent.
He also relied upon the decision in the case of Coal Marketing Company Pvt. Ltd. reported in AIR 1968 Calcutta 119 where in this Judgment so far as deal with Rule 7 supports the case of the Appellant herein. Only in paragraph 26 which is set out below that Rule 7 was dealt with by the Court in the Judgment:-
"(26) Finally it was submitted by Mr. Ray Chowdhury, learned counsel for the applicants, that under Rule 7 of the Companies Rules, the Court has power to enlarge or abridge time in any in which it shall deem fit. In the first place, I do not consider it to be at all fit in which I should enlarge the time. The matter, therefore, ends there. In the second place, this power of the court to enlarge or abridge time is only confined to the time appointed by its Rule or fixed by an order of the Court for doing any act or taking any proceeding. If the statute and the interpretation of its relevant section show that the court itself has no power to extend time for holding the annual general meeting, this question does 6 not arise and such an order of the Court will then not only be irregular and outside the court's jurisdiction but illegal being against statute."
It is further submitted that the said decision is not under Rule 7 but the said application was made under Section 633(2) of the Companies Act. The prayer was made for extension of time by the Hon'ble High Court to hold Annual General Meeting of the Company. As per Section 166(2) and 167 exclusive power to extend the time to convene an Annual General Meeting was vested in the Central Government (now this jurisdiction is vested in the company law board). That is the reason for holding that the Hon'ble Court had no jurisdiction to extend the time to convene an Annual General Meeting and in the said decision it has been stated that the applicant would have to approach the Central Government for extension. In the instant case the said decision has no manner of application since it is not a case under Section 633 (2) of the Companies Act.
After hearing the learned Counsel for the parties and after perusing the facts and the materials placed before us and also after considering the decisions cited at the Bar we have no test. In the case of Zolba (supra) where the Hon'ble Supreme Court held as follows :
"13. Considering the facts and circumstances of the present case and the statements made in the application for condoning the delay in filing the written statement, we are not in a position to hold that the appellant was not entitled to file the written statement even after the expiry of the period mentioned in the proviso to Order 8 Rule 1 Code of Civil Procedure. After reading the provisions, in particular the proviso to Order 8 Rule 1 are mandatory in nature."
The Hon'ble Supreme Court also held that it would be open to Court to direct the appellant to file written statement if exceptional circumstances have been made out and the Hon'ble Supreme Court condoned the delay and directed that the written statement filed by the appellant to be exceptional.
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The learned Counsel also relied upon the decision in the case of Sambhaji (supra) where the Hon'ble Supreme Court held that an amendment of Order 8 Rule 1 cast an obligation on the defendant to file the written statement within 30 days on the date of service of summons on him and within the extended time falling within 90 days. The provision does not deal with power of Court and also does not specifically take away the power of the Court to take the written statement on record although filed beyond the time as provided for.
The Hon'ble Apex Court also held that the said Order 8 Rule1 is procedural. In the said decision the Court observed as follows :
"10. All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would have the court helpless to meet extraordinary situations in the ends of justice.
11. The mortality of justice at the hands of law troubles a Judge's conscience and points an angry interrogation at the law reformer.
12. The procedural law so dominates in certain systems as to overpower substantive rights and substantial justice. The humanist rule that procedure should be the handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power in the Judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable. Justice is the goal of jurisprudence, procedural, as much as substantive.
13. No person has a vested right in any course of procedure. He has only the right of prosecution or defence in the manner for the time being by or for the court in which the case is pending, and if, by an Act of Parliament the mode of procedure is altered mode. A procedural law should not ordinarily be construed as mandatory; the 8 procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed.
14. Procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice".
The Division Bench of this Hon'ble Court presided over by the Hon'ble Chief Justice in the case of National Bank Ltd. (surpa) this Hon'ble Court held as follows :
"7. We deal with the first contention that by virtue of operation of the default clause the suit stood dismissed upon failure of the plaintiff to file the affidavit of documents by 10th September, 2008 and, therefore, the learned trial Judge had no jurisdiction to entertain the application of the plaintiff for recalling the orders dated 8th April, and 4th April, 2008".
The Courts have held that the trial Court does not become functus officio after expiry of the time limit stipulated in its previous orders with a default clause. In Mahanth Ram Das Vs. Ganga Das A.I.R. 1961 SC 882, the Apex Court made the following observations :
"Such procedural orders, though peremptory (conditional decree apart) are, in essence, in terrorem, so that dilatory litigants might put themselves in order and avoid delay. They do not, however, completely estop a Court from taking note of events and circumstances which happened within the time fixed."
(emphasis supplied) He also relied upon the decision in the case of Chinnamarkathian Vs. Ayyavoo reported in AIR 1982 SC 137 where the Hon'ble Apex Court held as follows :
"The true purport of conditional order is that such orders merely create something like a guarantee or sanction for obedience of the court's order but would not take away the Court's jurisdiction to act according to the mandate of the stature or on relevant equitable considerations if the statute does not deny such consideration."
(emphasis supplied) 9 The above decisions were followed by a Division Bench of this Court in Shethia Mining & Mft. Corporation Ltd. Vs. Khas D.C. Co. Pvt. Ltd. reported in AIR 1982 Cal 413 with reference to Rule 46 of Chapter 38 of the Original Side Rules of this Court.
The Full Bench of the Madhya Pradesh High Court in Bhudulal Kasturchand Vs. Chhotetlal reported in AIR 1977 M.P. 1 also dealt with this question while dealing with the scope of Section 148 of the Code of Civil Procedure and held that so long as the trial Court has does not record a formal order disposing of the suit, it continues to have the jurisdiction to extend the time granted to a party for performing an act, notwithstanding the previous order with such a default clause. The Full Bench expressed the following view :-
"In our opinion, the language of Section 148 Civil Procedure Code is wide enough to vest the Court with undoubted jurisdiction to enlarge the time from time to time, and this jurisdiction extends even to a case where the period fixed had already been expired. Even if in the initial order the Court may have said that if costs are not paid before a certain date fixed for it, the suit shall stand dismissed, the Court does not lose seisin of the case after the expiry of such period notwithstanding a default. Such directions are in terrorem so that dilatory litigants puts themselves in order."
(emphasis supplied) We have also noticed that the Hon'ble Apex Court has held that time limit of 90 days for filing written statement cannot be considered to be so sacrosanct and mandatory that Curt cannot specifically extend the time limit as held in the case of Salem Advocate Bar Association Vs. Union of India reported in 2005(6) SCC 344.
In the given facts, it appears to us that the litigant duly appointed a lawyer in the mater to take steps in terms of the Rules framed and it appears to us that there is a fault on the part of the Advocate-on-Record or his office in taking steps in the matter in accordance with the provisions of law. Therefore, in our considered opinion, the litigant should not suffer at the instance of his lawyer. We have also noticed that in the case of Sambhaji (supra) the Hon'ble 10 Supreme Court has specifically stated that the mortality of justice at the hands of law troubles a Judge's conscience and points an angry interrogation at the law reformer. It further appears to us that the procedural law in certain systems tries to overpower substantive rights and substantial cause for justice. It is well known that procedure should be the handmaid, not the mistress. The procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions should be treated as a lubricant and not a resistant in the administration of justice.
Applying the above principles in the present case we do not have any hesitation to allow the application filed by the appellant and granting an extension for filing the certified copy of the order sanctioning the scheme in question with the Registrar of Companies within a period of three weeks from date of this order.
In these circumstances, we allow the appeal upon payment of the cost of 500 Gms. to be paid to the Registrar of Companies, Kolkata.
For the reasons stated hereinabove the order so passed by the Hon'ble Single Judge is set aside, the appeal is allowed.
Xerox certified copy of this order, if applied for, be supplied to the parties on usual undertakings.
( PINAKI CHANDRA GHOSE, J. ) I agree, ( ASIM KUMAR RAY, J. )