Judgment:
ORDER
Lakshmanan, CJ.
1. This Special Appeal was filed by the respondent in the Company Petition (Sand Plast India Ltd., Jaipur) against the order dated, 15th September, 1998 passed in S.B. Company Petition No. 9/97, by P.P. Naolekar, J. dismissing the objections against the maintainability of the winding up petition filed by the respondent Company (JTC Bhadrachalam Finance & Investment Ltd. Mumbai. Company Petition No. 9/97 was filed by the respondent herein under Sections, 433, 434 and 439 of the Companies Act, 1956 for winding up of the appellant company. According to the respondent Company, the appellant is liable to pay a sum of Rs. 1,00,51,237/-due to it on 3tst December, 1996 with interest thereon. Since the appellant company was unable to meet its financial obligations, the above company petition was filed for winding up of the appellant company, as according to the respondent herein that the appellant company appears to be in a commercially insolvent condition.
(2). Preliminary objections were filed by the appellant company. The objections are:
(i) The winding up petition is not maintainable and is liable to be dismissed as the affidavit filed in respect of the petition is not in conformity with the provisions of the Companies Act and the rules made thereunder. It is not an affidavit, in the eye of law and the winding up petition is not a properly constituted petition.
(ii) According to the appellant, every affidavit shall be drawn up in the first person and shall state the full name, age, occupation and place of abode of the deponent. It shall be signed by the deponent and sworn to in the manner prescribed by the court or by the Rules and practices of the Court. Rule 18 of the Company (Court) Rules states as above. The rule further provides that every exhibit annexed to an affidavit shall be marked with the number of the proceeding to which it relates and shall be initialed and dated by the authority before whom it is sworn. Thus, as per the provisions of Rule 18 of the Company Court Rules every petition has to be drawn up in the first person and it shall state full name, age, occupation of the deponent. It is submitted by Shri Paras Kuhad, learned counsel appearing for the appellant that the above description of the deponent has not been given in the main body of the affidavit and this affidavit does not comply with the form of the affidavit given in form No. 3. He has further submitted that even the description of the deponent which has been given as mere heading, does not state the age and occupation or the place of abode of the deponent. Thus, the affidavit is defective and the company petition is liable to be dismissed in limine.
2. It is further submitted by Shri Paras Kuhad that the deponent of the affidavit has no personal knowledge as he is a Constituted Attorney and that the deponent Shri Vivek Mazumdar has not disclosed his source of information and/or knowledge. It is the requirement of law that the grounds of belief must be stated with different clauses. It has also not been staled specifically as to on whose advice the paragraphs No. 23 to 27 are based. Further, the affidavit has no co-relation with the petition.
3. No averments have been made either in the petition or in the affidavit that the person verifying the age has been authorised by the Board of Directors of the Company to file the aforesaid petition.
4. The respondent-petitioner has abused the process of law by filing a winding up petition as the alleged dispute is of civil nature raised for the alleged non-performance of the contract as entered into between the two parties regarding bill discounting facility.
5. The winding up petition is not maintainable, since its contents do not satisfy the requirements as envisaged by the provision of the Sections 433 and 434 of the Companies Act. It is also denied that the appellant company is in a commercially insolvent condition.
(3) Mr. Paras Kuhad drew our attention to various provisions of the Companies Act and the rules made thereunder and in particular Rules 6, 18, 21 and 33 and certain provisions of the Oaths Act, 1969, General Clauses Act etc. He also relied on the following judgments reported in:
i) Mool Chand Wahi vs. National Paints P. Ltd. And another (1)
ii) Registrar of Companies Punjab vs. New Suraj Financiers and Chit Fund Co. Pvt. Ltd. (2)
iii) Malhotra Steel Syndicate vs. Punjab Chem Plants Ltd. (3).
(4). In the course of arguments, Mr. Kuhad has also referred to certain High Court Rules with reference to the affidavit (Chapter IV) and in particular, Rules 33, 35(g), 40, 14, 47, 48 and 49 of the Rules.
(5). An affidavit dated, 31st July, 1997 was filed by Shri Vivek Mazumdar, working as Assistant Manager and constituted Attorney of M/s. ITC Bhadrachalam Finance and Investments Ltd. By a reply to the preliminary objections sought to be raised by the appellant company, it is stated that the objections are frivolous and have been filed by the appellant company with a view to delay and prolong the present petition and postpone the inevitable order of it being wound up. According to the respondent, reliance sought to be placed by the appellant company on rule 18 of the said Rules is misconceived, since it deals with the affidavits in general, whereas, Rule 21 deals with the requirements of an affidavit i.e. to be filed in support of a substantive petition as in the present case. It is further submitted that the affidavit verifying the petition is in Form No. 3 and in accordance with rule 21 of the Company (Court) Rules, 1959. It is further submitted that the Registry had, at the time of filing of the present petition, also raised more or less similar objections and listed the matter before this Court subject to such office objections most of which were subsequently removed. This court by order dated, 30.01.97 has over-ruled the remaining defects and had issued notice on the petition and therefore, the respondent company is now estopped from once again raising any such objections.
(6). Shri Ajeet Kumar Sharma, learned counsel appearing for the respondent herein-petitioner in the Company Petition, submitted that the contention of the appellant herein, based on Rule 18 (b) of the Company (Court) Rules is not at all applicable for the affidavit. In the affidavit it has been clearly stated that Vivek Mazumdar, is the Assistant Manager and Constituted Attorney of the petitioner Company and conversant with the facts of the case and authorised to swear the said affidavit; it is pursuant to a Power of Attorney dated 24.04.96, that Vivek Mazumdar has been appointed as the constituted attorney of the Company by its Board and has been duly delegated with the powers to institute and depose in the present proceedings. Mr. Sharma drew our attention to the provisions of the Power of Attorney Act, 1882 and also invited our attention to Sec. 643 of the Companies Act, Rule 2(13), form No. 3, Rule 18, Rule 21, Rule 30, Rule 54, Form No. 35 and Rule 26 of the Company (Court) Rules. He has also placed reliance on the judgment reported in Murarka Radhey Shyam Ram Kumar vs. Roop Singh Rathore and others (4), Bal Chand and another vs. Tarak Nath Sadhu (5) and Mrs. Roma Deb and others vs. R.C. Sood and Co. Pvt. Ltd. (6).
(7). Before we proceed further, it is useful to reproduce herein the affidavit filed by Shri Vivek Mazumdar.
'Affidavit of Mr. Vivek Mazumdar, Asstt. Manager and Constituted Attorney of M/s. I.T.C. Bhadrachalam Finance and Investments Limited having its registered Office at 817, Tulsiani Chambers, Nariman Point, Mumbai - 400021. Presently came down at New Delhi.
I, Vivek Mazumdar S/o Rabatiranjan Mazumdar, age 29 years, the above named deponent do hereby solemnly affirm and state as follows;
1. That I am the Asstt. Manager and Constituted Attorney of the Petitioner Company and am fully authorised and competent to swear this affidavit. I say that I am conversant with the facts and circumstances of the case and am in a position to swear this Affidavit.
2. That I say that I have read the accompanying Petition for winding up under Sec. 433, 434 and 439 of the Companies Act, 1956 and have understood the contents thereof. I say that the contents of paragraphs 1 to 22 are true to my knowledge, derived from the records of the case and that the contents of paragraphs 23 to 27 are based on advice which I believe to be true.
3. That I say that the annexures annexed to the petition are true copies of their originals.
Sd/-
DEPONENT
Verification;
I, the above-named deponent, do hereby verify that the contents of the above affidavit are true to my knowledge, no part of it is false and nothing material is concealed therefrom.
Verified by me at New Delhi on this the 8th day of January, 1997.
Sd/-
DEPONENT
(8). According to Mr. Paras Kuhad, the following are the infirmities affecting the affidavit filed in support of the winding up petition:
(a) The affidavit had not been sworn by the deponent in the manner prescribed by the Code or by the rules framed by the Court.
(b) The exhibits enclosed with the affidavit had not been marked with number of the proceeding to which they related.
(c) Although, the deponent was neither the Director nor the Secretary nor the Principal Officer, the company had neither applied for the leave of the Hon'ble Company Judge to make and file the affidavit through some other authorised person, nor had the company disclosed any reason for grant of any such leave nor had the Hon'ble Company Judge granted leave in the matter as required under Rule 18 of the Company (Court) Rules, 1959.'
(9). As already noticed, by a reply to the preliminary objections, the respondent Company submitted its counter affidavit through Shri Vivek Mazumdar wherein it was inter-alia contended by the respondent company that:
(i) The affidavit verifying the petition was in Form No.3 and in accordance with Rule 21 of the Company (Court) Rules, 1959.
(ii) The reliance placed by the respondent company on Rule 18 of the Company (Court) Rules was misconceived since Rule 18 dealt With the affidavit in general whereas Rule 21 dealt with the affidavits in support of winding up petitions.
(iii) The petition was properly constituted in as much as the deponent was not only the Asstt. Manager but was also the constituted attorney of the company and was thus admittedly conversant with the facts of the case.
On the above pleadings, the following questions arise for our decision:
(a) Whether the affidavit verifying the petition was in Form No. 3 and in accordance with Rule 21 of the Company (Court) Rules, 1959?
(b) Whether the reliance placed by the appellant on Rule 18 of the Company (Court) Rules was misconceived as alleged by the counsel for the respondent herein?
(c) Whether a Constituted Attorney of the Company, who is also conversant with the facts of the case, can file the affidavit verifying me petition in Form No. 3 as provided under the Rules and whether the said Constituted Power of Attorney had been delegated by the Board with the power to depose in the winding up petition?
(10). Naolekar J., passed the order impugned in this appeal holding that affidavit in support of a winding up petition has to only conform with the requirement of Rule 21 and Form No. 3. According to Mr. Kuhad, the said order passed by the learned Single Judge is not correct. According to him, an affidavit in a pending Company Petition has to conform with the requirement of Rule 18 of the Company (Court) Rules and that the form adopted by the deponent did not conform to the requirements of the rules and not in accordance with, the law. According to Mr. Kuhad, the findings of the learned Single Judge are contrary to taw and not sustainable and that the Hon'ble Judge has not appreciated the Rule 18 and Rule 21 read together constitute the complete scheme and that they can not be read as being mutually exclusive and as being meant to cover totally different situations.
(11). According to Mr. Kuhad, in the case of every affidavit there are four issues: (a) The Form of affidavit,
(b) The person authorised to depose the affidavit,
(c) The manner in which the affidavit is to be drawn up, and
(d) The manner in which the affidavit is to be deposed i.e. by way of swearing or by way of affirmation.
(12). Per contra, it is argued that Rule 21 deals with two issues, namely, the form of the affidavit and the person empowered to verify the affidavit. As against that, Rule 18 deals with the issue as to the manner in which the affidavit is to be drawn up and the issue as to the manner in which the affidavit is to be deposed. The consequence of construing Rule 18 and Rule 21 as constituting two separate schemes would be that each of such schemes would be silent either on the issue of the manner in which the affidavit is to be drawn and sworn, or on the issue as to the form of the affidavit and the person competent to depose the affidavit. Thus, it is contended by Mr. Kuhad that there is no escape to the adoption of an interpretation that a complete scheme is contained under Rule 21 read with Rule 18 of the Company (Court) Rules and each of the said rule represents only one part of the scheme and in order to arrive at a complete picture, both the Rules have to be read together. Thus, the Company Judge has failed to appreciate that there is no conflict between the provisions of the Rules of 1959 and the provisions of the Rules framed by the Rajasthan High Court. In any case, the Rules framed by this Court are only applicable to the strength of the mandate contained under the provisions framed by the Hon'ble Supreme Court u/S. 643 of the Companies Act, 1956. Since Rule 18 incorporates the consistent practice and procedure of the concerned court as also that the manner of swearing prescribed by the Code of Civil Procedure, thus, the learned Company Judge could not have held that the procedure prescribed by the Rules of High Court stood excluded by virtue of the provisions of the Company (Court) Rules framed by the Supreme Court. He has further urged that the finding of the learned company Judge that the power of Attorney filed by the respondent company was indicative of a resolution of the Board of Directors to file a winding up petition is not correct. According to Mr. Kuhad, nomination of a person for filing a winding up petition manifests that the person so nominated is principal officer of the Company for the purpose of filing the winding up petition. It is the contention of the appellant's counsel that Rule 21 in terms provides that an affidavit on behalf of a company shall be deposed only by a Director, Secretary, or Principal Officer of the Company. Inviting our attention to Sec. 2(3) of the Companies Act, which defines the expression 'Principal Officer' and this expression seeks to confine its applicability to only the persons holding the post of a Director, Secretary or Manager of the Company. It is the specific contention of Mr. Kuhad that the terms excludes from its coverage person holding offices below the rank of Managers. The expression 'Principal Officer' thus obviously refers to an officer more elevated and higher than an ordinary 'officer' and that the Assistant Manager is not even an 'officer' and therefore, he certainly cannot be said to be the 'principal officer' of the Company. Referring to Rule 21, it is submitted that the said rule does not allow the competence to swear the affidavit to cover persons carrying a delegated authority and confines it in terms of the nature of the office held by the deponent and that as per Rule 21, only such persons who holds principal office of the company shall be empowered to swear affidavit on behalf of the company. The proviso to Rule 21 in terms excludes from its purview the persons who are duly authorised on behalf of the Company, but are not holding any of the principal offices of the company and renders them incapable of deposing an affidavit on behalf of a company and this proviso exclusively states in this regard that a person authorised but not holding a principal office, shall be entitled to depose an affidavit on behalf of a company only with the leave of the Court granted for sufficient reasons. In the instant case, the deponent of the affidavit was admittedly not holding any of the principal offices of the company and, therefore, the Company Petition was improperly constituted since inception and was thus, liable to be dismissed in limine. Winding up his arguments, the learned counsel for the appellant submitted that the winding up petition had not been instituted under the authority of the Board of Directors of the Company and that Shri Vivek Mazumdar had no authority under the law to institute a winding up petition and he was not the principal officer of the company, he had never applied for the leave of the Company Judge to depose on behalf of the company.
(13). Per contra, Shri Ajeet Kumar Sharma submitted that Rule 18 is a general rule and that it is unnecessary for this Court to consider Rule 18 and that the said rule will never over ride Rule 21. At the time of hearing, he relied on Rule 13, Rule 2 (13), Rule 6 (Form No.3), Rule 30, Rule 54, Form No. 25 and Rule 76 of the Company (Court) Rules.
(14). Sec. 643 of the Companies Act deals with the power of the Supreme Court to make rules. The Supreme Court after consulting the High Courts, shall make rules providing for all mailers relating to the winding up of the company which are to be pres- cribed by the Act, except those reserved to the Central Government by sub-Sec. (5) of Sec. 503, sub-sec. (3) of Sec. 550, Sec. 552 and Sub-sec. (3) of Sec. 555. The Supreme Court also may make rules consistent with the Code of Civil Procedure as to the mode of proceedings to be had for winding up a company by the High Courts and courts subordinate thereto and for the voluntary winding up of companies, holding of meetings of creditors and members in connection with proceedings under Sec. 391 and for giving effect to the provisions of the Companies Act as to the reduction of the capital and generally for all applications to be made to the Court under the provisions of this Act.
(15). In exercise of the powers conferred by Sub-sections 1 and 2 of Sec. 643 of the Companies Act, the Supreme Court of India framed the rules. Rule 6 of the Rules provides for practice and procedure of the Court and provisions of the Code to apply to all proceedings under the Act and the Rules. Rule 18 deals with the affidavits, which reads as follows:
'Affidavits (a) Every affidavit shall be drawn up in the first person and shall state the full name, age, occupation and the place of abode of the deponent. It shall be signed by the deponent and sworn to in the manner prescribed by the Code or by the rules and practice of the Court.
(b) Every exhibit annexed to an affidavit shall be marked with the number of the proceeding, to which it relates, and shall be initialed and dated by the authority before whom it is sworn.
(c) Except with the leave of the Judge, no affidavit having an interlineation, alteration or erasure, shall be filed in Court unless such interlineation or alteration is initialed by the authority before whom it is sworn, or, in the case of an erasure, the words and figures written on the erasure are rewritten in the margin and initialed by such authority.
Rule 21 which is relied on by both the parties reads thus:
'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 alongwith 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.'
(16). Under Rule 21 in the case of a petition presented by a body corporate, by a director, secretary or other principal officer, such affidavit shall be filed along with the petition and shall be in Form No.3.
Form No. 3 is reproduced hereunder:
Form No.3
(See rule 21)
(Heading as in Form No. l)
Company Pelition No...... of 19 ......
I, A.B., son of ...... aged ...... residingat ...... do solemnlyaffirm and say as follows:
1. I am a director/secretary/ ...... of ...... Ltd., the petitioner in the above matter (and am duly authorised by the said petitioner to make this affidavit on its behalf.
(Note- This paragraph is to be included in cases where the petitioner is the company.)
2. The statements made in paragraphs ...... of the petition herein now shown to me and marked with the letter 'A' are true to my knowledge, and the statements made in paragraphs ...... are based on information, and I believe them to be true.
Solemnly affirmed etc.
Note - To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of he company.'
(17). Rule 2(13) runs as follows: 'The Rules' means these Rules, and includes theprescribed forms.'
(18). Rule 6 provides that save as otherwise provided by the Civil Procedure Code or by these rules, the practice and procedure of the Court and provisions of the Code so far as applicable, shall apply to all proceedings under the Act and these rules. The proceedings under the Act are to be regulated by the procedure of the court and the provisions of the Code save as otherwise expressly provided. In Form No. 3, rule 21, is referred to and Form No. 3 speaks of solemn affirmation. Form No. 3 prescribes in Para-1, after the words 'Director/secretary' there is a blank which is to be filled up or included when the affidavit is sworn to by any person duly authorised by the petitioner company to make the affidavit on its behalf. The Note appended to Form No. 3 clearly states that if the affidavit is to be sworn to by any person other than a directors, agent of secretary or other officer of the company. The same is to be filled up in the space provided to for it in Paragraph-1/3. In the instant case, Vivek Mazumdar has sworn the affidavit. It is described in para-I that he is the Asstt. Manager and Constituted Attorney of the petitioner company and he is duly authorised and competent to swear the affidavit. It is also sated that he is conversant with the facts and circumstances of the case and he is in a position to swear the affidavit. It is stated in para-2 that the contents of paras 1 to 22 are true to his knowledge derived from the records of the case and contents of paras 23 to 27 are based on advice which he believes to be true. The affidavit was also verified by the named deponent that the contents the affidavit are true to his knowledge and no part of it is false and nothing material is concealed there from. The affidavit was verified by him at New Delhi on 8th January, 1997. We have already seen that the affidavit was filed by Shri Vivek Mazumdar as Assistant Manager and Constituted Attorney of the petitioner company. The Power of Attorney executed by the Board has also been filed. It is stated that it is pursuant to a Power of Attorney dated, 24.4.96 that Vivek Mazumdar has been appointed as Constituted Attorney by the Board of the Company and is duly delegated with the powers to institute and depose in the present proceedings. In the instant case, Vivek Mazumdar has signed the affidavit. He is the principal officer of the company. The company has authorised one of the officer to institute the proceedings. The definition of 'officer' Includes any director, managing agent, secretary and treasurer, manager or secretary or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the Directors is or are accustomed to act and also includes (a) where the managing agent, or the secretaries and treasurers, is or are a firm, any partner in the firm; (b) where the managing agent or the secretaries and treasurers is or are a body corporate, and director or manager of the body corporate;
but, save in sections 477, 478, 539, 543, 545, 621, 625 and 633 does not include an auditor.'
(19). Shri Vivek Mazumdar is the Assistant Manager of the Company. The definition 'Manager' (Sec.2 (24) means, an individual who is subject to the superintendence, control and direction of the Board of Directors and includes a Director or any other person occupying the position of a Manager by whatever name under a contract of service or not. The rule making authorities have prescribed different kinds of forms. Rule 30 provides the mode of affidavit of service. The rule reads as follows:
'30. Affidavit of service (1) An affidavit or affidavits stating whether the petition has been advertised as prescribed by rule 24 and whether the notices, if any have been duly served upon the persons required to be served shall be filed not less than 3 days before the date fixed for hearing. Such proof of the advertisement or of the service, as may be available, shall be filed along with the affidavit.
(2) An affidavit of service on a company or its liquidator shall be in Form No. 7 or 8 as the case may be.'
(20). The said rule provides that an affidavit of service on a company or its liquidator shall be in Form No. 7 or 8 as the case may be. Rule 54 provides for affidavit of service. This rule reads as follows:
'54. Affidavit of service. The company shall, as soon as may be file an affidavit providing the dispatch and publication of the notices referred to in rules 52 and 53. Such affidavit shall be in Form No. 25'.
(21). This rule provides that an affidavit proving despatch and publication shall be in Form No. 25. Likewise, rule 21, which provides for affidavit verifying petition states that every petition shall be verified by an affidavit made by the petitioner 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. Whereas, in rule 18, which deals with affidavits and also prescribes procedure as to how the affidavit shall be drawn up. There is no form prescribed for the affidavits to be filed under the rules. Rule 21, which is undoubtedly statutory in nature and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be brushed aside. In our opinion the affidavit filed in the present case, complies with the requirement of Rule 21. In this case, the person who filed the affidavit in the winding up petition has disclosed the source of information on the basis of which he verified that the contents of the affidavit are believed to be true.
(22). Rule 21 requires every petition for winding up of a Company to be accompanied by an affidavit verifying the petition in Form No. 3. In our view, the defect if any, in the verifications is only an irregularity in procedure, which can be cured at any stage of the proceedings. It is not an incurable defect as contended by Mr. Paras Kuhad. Even if there is a defect, an amendment of the petition and the affidavit be permitted to filed. The Court, in our opinion, can in the ends of justice and in its inherent power can allow the petitioner or a party to a proceeding to present an affidavit in support of the petition in terms of Rule 21 and Form No. 3. This power can be exercised if the affidavit originally filed with the petition did not conform to Form No. 3. In our opinion, the affidavit filed with the company petition strictly conforms to Rule 21 and the form prescribed, namely, Form No.3. On the other hand, an affidavit filed under Rule 18 shall be drawn up in the first person and shall state full name, age, occupation etc. An affidavit which is not in the prescribed form is of value and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law and therefore, it is liable to be rejected. Where an affidavit is filed under Rule 18, the provisions of Order 19 Rule 3 must be strictly observed and an affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief and the grounds of belief must be stated with sufficient. particularity to enable the court to judge whether it would be safe to act on the deponent's belief.
(23). In our opinion, Rule 18 is of no application. The reliance sought to be placed by the appellant company on Rule 18 is misconceived since it deals with the affidavit in general, whereas, Rule 21 deals with the requirement of an affidavit i.e. to be filed in support of a substantive petition as in the instant case. In view of the fact that the affidavit sworn to by Shri Vivek Mazumdar verifying the winding up petition is in the prescribed form, the objections raised by the appellant are unsustainable. We are also of the view that the objections are misconceived and contrary to law since the proceedings initiated by Ihe respondent herein, U/ss. 433, 434 and 439 of the Companies Act, 1956 are not for recovery of any money under independent of a civil suit for recovery of amounts under contracts. The objections raised are frivolous in nature and are not bonafide. Such objection cannot at all be countenanced in the larger public interest and in the interest of the creditors of the company. We have already referred to Rules 30 and 54. Rule 76 does not prescribe any form. Rule 76 directs the Chairman appointed for the meeting of the Company and other person to issue advertisements and notices of the meeting shall file an affidavit not less than seven days before the date fixed for the holding of the meeting or the holding of the first of the meetings as the case may be showing that the directions regarding the issue of notices and the advertisement have been duly complied with. Thus, the rules of procedure has been clearly spelt out in Rule 76.
(24). Sec. 6 of the Oaths Act, 1969 deals with forms of oaths and affirmation. The section reads as follows:
'6. Forms of oaths and affirmations - (1) All oaths and affirmations made under Sec. 4 shall be administered according to such one of the forms given in the Schedule as may be appropriate to the circumstances of the Case:
Provided that if a witness in any judicial proceeding desires to give evidence on oath or solermi affirmation in any form common amongst, or held binding by persons of the class to which he belongs, and not repugnant to justice or decency, and not purporting to affect any third person, the court may, if it thinks fit, notwithstanding anything herein-before contained, allow him to give evidence on such oath or affirmation.
(2) All such oath and affirmations shall, in the case of all courts than the Supreme Court and the High Courts, be administered by the presiding officer of the Court himself, or, in the case of a Bench of Judges or Magistrates, by any one of the Judges or Magistrates as the case may be.'
(25). Under this Section all the oaths etc. shall be administered according to the forms mentioned in the Schedule annexed with the Act. The Schedule deals with the forms of oath or affirmations. It reads as follows:
THE SCHEDULE
(See Section 6)
Form No. 1 (Witnesses);
I do swear in the name of God/Solemnly affirm that what I shall state shall be the truth, the whole truth and nothing but the truth,
Form No. 2 (Jurors):
I do swear in the name of God/solemnly affirm that I will well and truly try and true deliverance make between the State and the prisoner (s) at the bar, whom I shall have in charge, and true verdict give according to the evidence.
Form No. 3 (Interpreters):
I do swear in the name of God/Solemnly affirm that I will well and truly interpret and explain all questions put to and evidence given by witnesses and translate correctly and accurately all documents given to me for translation:
Form No. 4 (Affidavits):
I do swear in the name of God/Solemnly affirm that this is my name and signature (or mark) and that the contents of this my affidavit are true.
(26). Form No. 4 of the Schedule deals with affidavits. The affidavits can be sworn in the name of God or that the deponent may solemnly affirm that the name mentioned in the affidavit is his name and signature and that the contents of the affidavit are true. Sec. 7 of the Oaths Act, 1969 provides for the proceedings and the evidence not invalidated by omission of oath or irregularity. The Sec. reads as follows:
'7. Proceedings and evidence not invalidated by omission of oath or irregularity - No omission to take any oath or make any affirmation, no substitution of any one for any other of them, and no irregularity whatever in the administration of any oath or affirmation or in the form in which it is administered, shall invalidate any proceeding or tender inadmissble any evidence whatever, in or in respect of which such omission, substitution or irregularity took place, or shall affect the obligation of a witness to state the truth.'
(27). The present Sec. 7 of the Oaths Act, 1969 is corresponding to Sec. 13 of 1873 Act, which was repealed. Sec. 13 of the Old Act cures form of oath.
(28). The Calcutta High Court in the case of Bal Chand and another vs. Tarak Nath Sadhu (supra), held that the omission to take any oath or any other irregularity in the from in which it is administered does not invalidate the proceedings. The Delhi High Court in the case of Mrs. Roma Deb and others vs. R.C. Sood and Co. Pvt. Ltd (supra), had occasion to deal with Rule 21 Of the Companies (Court) Rules, 1959, which requires every petition for winding up a company to be accompanied by an affidavit verifying the petition in Form No. 3. In that case, the petitioners filed a petition for winding up of the Company alleging inter-alia that me Company was using these amounts in other business activities and was guilty of breach of contract and mismanagement. The petition was twice amended and the affidavit filed alongwith the amended petition was challenged by the Company as defective and the petition as not maintainable. On facts, the Delhi High Court held:
'On the facts, that since no rights of third parties would seem to be affected, and since the petitioners made serious allegations that the respondent company had misused their money for many years, in- stead of pushing the petitioners to a new petition, they were to be permitted to file an affidavit verifying the petition in Form No.3.'
(29). The Court has also observed that in the case of a verification of a plaint, a defect in the verification is only an irregularity in procedure which could be cured at any stage of the suit and that the same principle could be imported for verification of a petition for winding up, except that, in the latter case, the court would not permit rectification of the defect just as a matter of course and would take into account all the relevant circumstances, including the conduct of the parties. The court has further held that merely because the averments in a petition for winding up can be treated as evidence without any further proof, this would not be a ground for the court to treat a defective affidavit verifying the petition as fatal to the petition and if amendment of a petition can be allowed, there is no reason why a defective affidavit verifying the petition could not be rectified. The Delhi High Court, in the ends of justice, exercising its inherent power, allowed the petitioner therein to present a petition in support of his petition in terms of Rule 21 and Form No. 3, if the affidavit originally filed with the petition did not conform to Form No. 3.
(30). Learned counsel relied on the case of Murarka Radhey Shyam Ram Kumar (supra), which was decided by five Judges Bench. In the said case filed from Rajasthan, it was contended that the election petitions were not maintainable and should have been dismissed by the Election Tribunal. It was urged that there was no non-compliance with the provisions of Sec. 83 of the Representation of People Act, 1951, in as much as, the affidavit in respect of the corrupt practices which accompanied the Election Petition was neither properly made nor in the prescribed form. In Paragraphs 12 and 13 of the judgment it was held as follows:
'12. We now turn to the third preliminary objection and this relates to the affidavit which accompanied the petition in respect of the corrupt practices alleged against the appellant. The argument on this part of the case is that the affidavit was neither in the prescribed form nor was it properly sworn as required by the Rules in the Conduct of Election Rules, 1961; therefore, there was a failure to comply with the proviso to sub-Sec. (1) of Sec. 83 of the Act. The argument further is that an election petition under Sec. 81 must comply with the provisions of Sec. 83 and unless it complies with those provisions it is not an election petition under Sec. 81.'
'13. We think that this contention has been sufficiently disposed of by what has been stated by the Election Tribunal. The Election Tribunal has rightly pointed out that the affidavit was in the prescribed form but due to inexperience the Oath Commissioner had made a mistake in the verification portion of the affidavit. The Tribunal said:
'It appears that due to inexperience of the Oaths Commissioner instead of 'verified before me' words, 'verified by me' have been written. The signature of the deponent has been obtained in between the writing with respect to admission on oath of the contents of affidavit by the petitioner and the verification by the Oaths Commissioner. According to the prescribed form the verification should be 'solemnly affirmed or sworn by ' ' such and such 'on' such and such date 'before me'. The verification of the affidavit of the petitioner is apparently not in the prescribed form but reading as a whole the verification carries to same sense as intended by the words mentioned in the prescribed form. The mistake of the Oaths Commissioner in verifying the affidavit cannot be a sufficient ground for dismissal of the petitioner's petition summarily, as the provisions of Sec. 83 are not necessarily to be complied with in order to make a petition valid and such affidavit can be allowed to be filed at a later stage also,'
This view of the election Tribunal was affirmed by the High Court. We agree with the view expressed by the Election Tribunal and we do not think that the defect in the verification due to inexperience of the Oaths Commissioner is such a fatal defect as to require the dismissal of the election petition.'
(31). Reading of paragraph 13 as a whole would only hold that substance alone has to be seen and not the form. In our opinion, the procedure has to advance the cause of justice and not to defeat.
(32). Reliance was placed by Mr. Kuhad on Sec. 139 of the Code of Civil Procedure. Sec. 139 reads as follows:
'139 Oath on affidavit by whom to be administered In the case of any affidavit under this Code-
(a) any Court or Magistrate, or
a(aa) any Notary appointed under the Notaries Act, 1952, or)
(b) any officer or other person whom a High Court may appoint in this behalf, or
(c) any officer appointed by any other Court which the State government has generally or specially empowered in this behalf, may administer the oath to the deponent.
(a) Inserted by the Code of Civil Procedure (Amendment) Act, 1976 (104 of 1976), Section 46 (f.2.1977)'
(33). Learned counsel also referred to Sec. 8 sub-clause 63 of the General Clauses Act, 1897, which deals with 'swear', reads as under:
'Swear', with its grammatical variations and cognate expressions, shall include affirming and declaring in the case of persons by the law allowed to affirm or declare instead of swearing.'
(34). We have already pointed out by reading of Rules 18 and 21 together, affidavit accompanying the petition is required to be sworn not affirmed and swearing of the affidavit should be in the manner prescribed by the Code and manner of the Court. The phrase 'swearing and affirmation' of the affidavit itself can be seen by the definition of the word 'swear' in Sec. 3 (63) of the General Clauses Act. This point was argued before the learned single Judge. The learned single Judge held as follows:
'Thus, it is apparent that normally swearing does not include affirmation or declaration and further under Rule 49 of Rules of the High Court of Judicature for Rajasthan, 1952, it is provided that the person administering an oath or affirmation to the person making an affidavit shall follow the provisions of the Oaths Act, 1969. The form of Oath/Affirmation given in the name of God 'in case of swearing, and 'I do solemnly affirm' in case of affirmation, which clearly indicates that swearing and affirmation of an affidavit are distinct acts and to be' performed under the rules and practice of the Court.'
(35). Mr. Kuhad cited the case of Mool Chand Wahi (supra), wherein the Punjab and Haryana High Court held that the petition for winding up is required to be accompanied by an affidavit in due form and that if an affidavit is not in due form, no value can be attached to it. The Punjab and Haryana High Court was considering Rules, 11(a), 18, 21 and Form No. 3 in that case.
(36). In the appeal preferred, the Division Bench of the same High Court held that under Rules 11(a), 18 and 21 of the Rules a, petition for winding up is required to be accompanied by an affidavit in a proper form and an affidavit which is not in due form is not valid. This judgment is reported in 1986(6) Co. Cases 402) (supra).
(37). Learned counsel then relied on the case of Malhotra Steel Syndicate (supra) of the Punjab and Haryana High Court, Majithia, J. has doubted the principles laid down in the aforementioned decisions. In para 9, the learned Single Judge has observed that, sitting singly, is bound by the judgment reported in 1986 (6) Co. Cases 402 and that he had got serious doubts about the correctness made in the judgment. The petition is liable to be rejected on the sole ground that the affidavit accompanying petition is not verified according to law. According to the learned Judge, it was a mere irregularity and the Company Court could direct the petitioner to file a fresh affidavit in conformity with rule 21 of the Rules and irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. With respect to the learned Judges of the Punjab and Haryana High Court who rendered judgments reported in 1986 (6) Co. Cases 198 and 1986 (6) Co. Cases 402 (supra), we are unable to agree or subscribe with the proposition of law laid down by the said Court. We have already held that an affidavit accompanying petition would not require compliance of Rule 18 of the Rules and Rule 21 is the relevant rule and Form No. 3 is the relevant form and no more. Another decision of the Punjab and Haryana High Court reported in Registrar of Companies, Punjab vs. New Suraj Financiers and Chit Fund Co. Pvt. Ltd : (supra) was cited. A learned Single Judge of the Punjab and Haryana High Court held:
'An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. Amendment of a petition for winding up, if allowed, relates back to the date of presentation of the petition. It would lead to a great deal of confusion if the petitioner were allowed to swear and supply a fresh affidavit at a later stage because rights of third parties would crop up.
Held, on the facts, that since the blanks indicating the numbers of the paragraphs in the affidavit filed in support of the petition had been left blank, it was not in accordance with law and the verification of the petition also could not be treated as being in accordance with law. The petition therefore, had to be dismissed.'
(38). For the reasons above mentioned, we are unable to agree with the proposition of law laid down by the learned Single Judge of the Punjab and Haryana High Court in this case.
(39). We have also noticed, Sec. 643 of the Act which lays down that the Supreme Court after consulting the High Court, shall make rules providing for alt matters relating to winding up of the companies. The Rules have been framed and published by Notification No. GSR 950 in the Gazette of India dated, 17.8.1959 in exercise of the powers conferred by sub-sec. 1 and 2 of Sec. 643 of the Act after consulting the High Court, after framing the High Court Rules in regard to the winding up proceedings have no application. Therefore, Rule 21 and Form No. 3 prescribing the procedure and form respectively, will be applicable. Mr. Kuhad submitted that the power to file Company Petition was given only to the Managing Director and those powers cannot be further delegated. This principle, in our view, has no application to the case on hand. The said principle essentially applies to the powers delegated by the Legislature under the enabling Act and not the contractual matter or powers. In the instant case, the Managing Director has only delegated and authorised the person concerned to take necessary steps in the matter of winding up proceedings in the High Court. In our opinion, such authorisation/delegation given to Shri Vivek Mazumdar to file Company Petition was within the competence of the managing Director.
(40). We have referred to the Power of Attorney given in favour of Vivek Mazumdar, which indicates that it has been given for taking steps against the appellant company either in criminal court or under the Act. Thus, the Board of Directors have authorised a person concerned to file a Company Petition. In our opinion, the preliminary objections sought to be raised by the appellant company are frivolous in nature and have been filed by the company with a view to delay and prolong the company proceedings and postpone outcome of the final order. The Company Petition was presented in this Court on 9.1.97 by the respondent company. The matter was directed to be listed for admission after removing defects on 30.1.97. On 6.2.97, notice of the petition to the respondent in the Company Petition to show cause as to why it should not be admitted, was ordered. Notice by registered post in addition to the normal procedure was also ordered. On 20.3.97, time was sought to file reply to the Company Petition. Time was granted upto 24.4.97. On 22.5.97 again time was sought to file reply. On 11.7.97 time was sought to file rejoinder to the reply. The matter was thereafter, put up before the Court on 21.8.97, 27.8.97, 11.9.97, 16.10.97 and 23.10.97. On 11.12.97 Mr. Paras Kuhad submitted that the parties are making efforts to make compromise in the matter, the matter was adjourned again to put up on 15.1.98.Again it was posted on 15.8.98, 4.2.98, 26.2.98, 19.3.98, 17.4.98, 12.5.98, 29.5.98, 13.7.98, 16.7.98, 23.7.98, 30.7.98, 1.8.98, 25.8.98 and 27.8.98. On 3.9.98, after several adjournments, the arguments were heard on 15.9.98, the order was pronounced in the open court.
(41). This Special Appeal was filed on 26.9.98 and posted on 7.10.98. On 8.10.98 the Division Bench reserved the judgment after arguments were heard. On 19.2.98, the Division Bench passed the order that no order for detaching the S.B. Company Petition No. 9/97 can be passed. After few adjournments, on 13.9.99 when it was listed before the then Hon'ble Chief Justice and Hon'ble J.C. Verma, J., it was posted before the Hon'ble Mrs. G.S. Misra, J. and another Judge under the head To be mentioned'. After few adjournments on 26.4.2000, the Bench passed the order, when the judgment in the special appeal could not be pronounced and now it has been listed after lapse of one and half years, it is difficult for the Judges to recollect the circumstances and the submissions, the Bench ordered for listing the appeal before the regular Bench for its re-hearing. Thereafter, it was put up on 17.7.2000, 20.7.2000, 26.7.2000, 27.7.2000, 28.7.2000, 2.8.2000, 9.8.2000, 19.8.2000 and before our Bench for the first time on 1.9.2000 and again adjourned to 7.9.2000, 11.9.2000, 13.9.2000, 14.9.2000, 11.10.2000 and 16.10.2000, on which date, arguments were heard in part and for further arguments, it was posted on 16.1.2000 and again adjourned to 5.12.2000 and arguments were heard and concluded and the judgment was reserved. The judgment is now pronounced by us today, i.e. December 14th, 2000. The matter filed on 9.1.97 could not be taken up in view of the preliminary objections raised by the appellant company on 30th June, 1997. We cannot ignore the fact that there is laws delay also. Therefore, in our opinion, the Company Petition should be disposed of a expeditiously as possible and at any rate, not later than 31.3.2001. The appellant-respondent in the company petition has also filed his reply in respect of the merits of the petition as could be seen from para 6 of the D.B. Special Appeal. Under such circumstances, we direct that the company petition be posted before the Judge for formal admission of the petition and fixing of a date for hearing and for a direction as to the advertisement to be published and proceed further in accordance with the provisions of the Act and the Rules made thereunder. We request the Hon'ble Company Judge to dispose of this matter within three months in view of the reasons mentioned in paragraphs, supra.
(42). Though, an objection in regard to the maintainability of the appeal u/S. 18 of the Rajasthan High Court Ordinance was made by Shri Ajeet Kumar Sharma, he did not press the said contention.
(43). The learned Judge disposed of the matter on 15th September, 1998 by awarding a cost of Rs. 5000/-. Though a direction was issued that the company petition shall be placed for admission, the appellant company has ventured to file the appeal by raising a tall claim on the infirmities pointed out by the appellant company rendering the entire proceedings a glaring example of total non conformity with the prescribed procedural safeguards which the Legislature had deemed to be imperative, have miserably failed to prove the infirmities. In our view, this is eminently a fit case for awarding exemplary costs. We therefore, dismiss the appeal by awarding costs of Rs. 5000/-, which shall be paid within two weeks to the respondent company. However, the awarding of costs will not detract us from expressing our appreciation at the invaluable help and assistance we received from Shri Paras Kuhad and Shri Ajeet Kurhar Sharma, counsel appearing for the respective parties in approaching their respective contentions and rendering out task at once easy and exhilarating.