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M/S CENTURY CONSULTANTS LIMITED AND OTHERS versus THE REGISTRAR OF COMPANIES, U.P. & UTTARANCHAL & ORS.

High Court of Judicature at Allahabad

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M/S Century Consultants Limited And Others v. The Registrar Of Companies, U.P. & Uttaranchal & Ors. - SPECIAL APPEAL No. 344 of 2006 [2006] RD-AH 7682 (13 April 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court No.32

Special Appeal No.344 of 2006

M/s Century Consultants Limited & others.....Appellant

Versus

The Registrar of Companies,

U.P. & Uttaranchal and others .....Respondents

*****

Hon'ble S. Rafat Alam, J.

Hon'ble Sudhir Agarwal, J.

This special appeal is preferred against the order of the Hon'ble Company Judge dated 3.4.2006 rejecting the application of the appellants to refer the matter before the Hon'ble the Chief Justice for appropriate orders.

We have heard Sri Shyamal Narain, learned counsel for the appellants at a great length.  

It appears that the Hon'ble the Chief Justice in exercise of his power under Clause 14 of the United Provinces High Courts (Amalgamation) Order, 1948  (in short the Order of 1948) passed the following order on 30.11.2005:

"Subject to any matters being heard in part already, let all the matters be heard at Allahabad by Hon. Mr.Justice Sunil Ambwani."

Pursuant to that, the matter was fixed before the Hon'ble Company Judge at Allahabad. However, an application was moved on behalf of the appellants, on the ground inter alia, that since the Hon'ble Apex Court has recalled its earlier order dated 3.11.2004 vide order dated 4.5.2005, the order of Hon'ble the Chief Justice under Clause-14 of the Order of 1948 also requires to be modified or recalled and, therefore, the matter may be placed before Hon'ble the Chief Justice.

Learned counsel for the appellants submitted that the order dated 30.11.2005 passed by the Hon'ble Chief Justice does not refer to Clause-14 of the order of 1948 and was mainly passed on account of the Hon'ble Apex Court's order dated 3.11.2004 and, therefore, it cannot be said that the same has been passed in exercise of the aforesaid power.  We do not find any force in the submission for the reason that the Hon'ble Chief Justice has power to pass order transferring any case from Lucknow Bench to Allahabad under Clause 14 of the order of 1948 which reads as under:

"The new High Court, and the judges and division courts thereof, shall sit at Allahabad or at such other places in the United Provinces as the Chief Justice may, with the approval of the Governor of the United Provinces, appoint:

Provided that unless the Governor of the United Provinces with the concurrence of the Chief Justice, otherwise directs, such judges of the new High Court, not less than two in number, as the Chief Justice, may, from time to time nominate, shall sit at Lucknow in order to exercise in respect of cases arising in such areas in Oudh, as the Chief Justice may direct, the jurisdiction and power for the time being vested in the new High Court:

Provided further that the Chief Justice may in his discretion order that any case or class of cases arising in the said areas shall be heard at Allahabad."

A perusal of 2nd proviso of Clause-14 clearly shows that the Hon'ble Chief Justice in his discretion can pass an order directing any case or class of cases arising in the area of Oudh, to be heard at Allahabad. The Hon'ble Company Judge has found that in respect to the appellants' Company some matters were pending at Lucknow and some at Allahabad and all of them were required to be heard at one place. The Hon'ble Company Judge after perusing the order dated 3.11.2004 passed by the Hon'ble Apex Court in Criminal Appeal Nos.1265-1266 of 2004 filed by the accused officials of the Company to enlarge them on bail, found that it would be necessary to consolidate all the pending cases to be heard at one place so that conflicting orders may not be passed. It cannot be said that the observation made by the Hon'ble Company Judge for placing the matter before Hon'ble the Chief Justice are based totally on the orders of the Hon'ble Apex Court but is based on the reasoning that inconsistent orders in different matters pending at two places may not be passed. The Hon'ble Chief Justice exercising his discretion under Clause-14 of the 2nd proviso of order of 1948, has, therefore, passed the order directing all the cases to be heard at Allahabad except part heard matters.

It is not disputed that the cases, which are being heard by the Hon'ble Company Judge pursuant to the aforesaid order, does not have any part heard matter. In the circumstances, it cannot be said that merely because subsequently the Hon'ble Apex Court recalled the order dated 3.11.2004 granting bail to the accused officials of the Company vide order dated 4.5.2005, would have otherwise effect on the order dated 30.11.2005 passed by the Hon'ble Chief Justice for hearing all the matters at Allahabad.

Besides that on our repeated asking from the learned counsel for the appellants as to what prejudice would cause if all the company matters of the appellants are heard at Allahabad, he failed to point out any prejudice, inconvenience or loss if all the matters are heard at Allahabad and sought to contend that after recall of the order of the Hon'ble Apex Court, the Hon'ble Company Judge ought to have again referred the matter to Hon'ble the Chief Justice for re-consideration of his order dated 30.11.2005 transferring the matter pending before Lucknow Bench of this Court to Allahabad. Thus, in the absence of any inconvenience, which is likely to cause to the appellants, there appears to be no reason to place the application before the Hon'ble Chief Justice for re-consideration of His Lordship's order dated 30.11.2005. It would be useful to refer here that the order of the Hon'ble Apex Court dated 3.11.2004 was passed in Criminal Appeal Nos. 1265-1266 of 2004 of appellants no.2 and 3 seeking release on bail in the offences of cheating, forgery and criminal conspiracy etc. involving crores of Rupees. The Hon'ble Apex Court while directing to enlarge the appellants no.2 and 3 on bail issued certain directions. However, the said order granting bail to appellants no.2 and 3 was recalled by the Hon'ble Apex Court vide order dated 4.5.2005 and the appellants no.2 and 3 were directed to surrender before the learned trial court within a week. Thus, in our view, subsequent order of the Hon'ble Apex Court dated 4.5.2005 will have no effect on the order of the Hon'ble Chief Justice of this Court dated 30.11.2005 which was passed for the reason that all the matters should be heard together to avoid conflicting decisions/orders and as such the very prayer of the appellants to again refer back the matter to Hon'ble the Chief Justice to re-consider his order dated 30.11.2005 is erroneous, misconceived and appears to have been made only to frustrate the early disposal of the matters pending before the Hon'ble Company Judge which would be contrary to the spirit of the orders of the Hon'ble Apex Court and as such, we are of the view that the Hon'ble Company Judge has rightly rejected the application.

Under Clause 14 of the Order of 1948 Hon'ble the Chief Justice has jurisdiction to assign any matter within the jurisdiction of Allahabad from Lucknow Bench and thus, where the Chief Justice has exercised his power under the aforesaid provisions, the same cannot be said to be erroneous, illegal or without jurisdiction.

Apart from the above, we are of the considered view that against such an order special appeal under Chapter VIII Rule 5 of the Rules of the Court (for short the Rules) does not lie. Special appeal under the Rules of the Court lies only against a judgment of the Hon'ble Single Judge of this Court whereby rights and obligations between the parties are adjudicated upon.

The appellants-applicants in the application dated 3.4.2006 sought the following reliefs:

"It is, therefore, Most Respectfully prayed that this Hon'ble Court be pleased to allow this application and drop the present proceedings in the winding up petitions filed by the Registrar of Companies, U.P. and Uttranchal, Kanpur, as not maintainable at Allahabad.

OR, IN THE ALTERNATIVE

be pleased to refer the records of the case to the Hon'ble the Chief Justice for appropriate orders regarding continuation of the winding up proceedings at Allahabad, particularly in the light of the order dated 9th December, 2005, passed by the Hon'ble Supreme Court clearly stating that vide order dated 4.5.2005, the Apex Court had recalled the order dated 3.11.2004 and that the applicants (City Cooperative Bank Ltd., on whose clarification application the order dated 9.12.2005 was passed) would be at liberty to take recourse to the remedies available to them in law before appropriate forum."

The Hon'ble Company Judge, having heard learned counsel for the parties, observed in paras 6, 7 and 8 of the order as under:

"The object of requesting Hon'ble the Chief Justice for nominating all the matters to be heard at one place was the intricacies of the fraudulent transactions, on which C.B.I. has filed charge sheets against Johari brothers and other Directors of the companies. Johari brothers, taking advantage of ''badla' scheme of the stock exchanges had cornered large sums running into hundreds of crores in a maze of transactions linking many companies in which they were on drivers seats. The transactions, as found out by CBI in their investigations were interlinked, using the parking of funds in these companies. It will not be possible for any company Judge either at Lucknow or at Allahabad to decide these matters separately.

Further I find that taking advantage of the various proceedings pending in different Courts, the Century Consultants Ltd. through Johari brothers have siphoned off a large amount still available to them by filing a petition under Section 391(1) of the Companies Act, 1956 in Company Case No.4/2002 at Lucknow Bench, proposing a scheme of repayment to the investors. The Court had taking the scheme to be bonafide called the meeting of unsecured creditors and sanctioned the scheme, in pursuance of which Johari brothers withdrew more than Rs.80 lacs from the banks. Sri Shyamal Narain is not in a position today to make the statement whether the amount was paid to the investors under the scheme, or the status of the scheme. The order sheet of the company petition No.4/2002 in which the scheme was filed does not indicate as to what has happened to the amount, which was withdrawn and whether the scheme was implemented at all.

This is one more reason why all the matters should be heard either at Allahabad or at Lucknow."

 The above order of the Hon'ble Company Judge rejecting the aforesaid application, in our view, cannot be said to be a judgment and thus, special appeal under Chapter VIII Rule 5 of the Rules would not lie. Construing the term ''judgment' under Chapter VIII Rule 5 of the Rules after considering the provisions pertaining to the Letters Patent, the special appeal would lie only when the order impugned would construe the judgment.

The same view has been taken by a Division Bench of this Court in the case of Musafir Singh Versus Shiv Ram Yadav and others (Special Appeal No. 1247 of 2005) decided on 20.10.2005 has held as under:

"We are of the view that the order dated 3.10.2005 is not a judgment as in fact, neither it grants final relief to the petitioner nor decides an issue finally. Chapter VIII Rule 5 of the Rules of the Court provides as under:

"5. An appeal shall lie to the Court from a judgment (not being a judgment passed in the exercise of appellate jurisdiction) in respect of a decree or order made by Court subject to the superintendence of the Court and not being an order made in the exercise of revisional jurisdiction or in the exercise of its power of superintendence or in the exercise of criminal jurisdiction [or in the exercise of jurisdiction conferred by Article 226 or Article 227 of the Constitution in respect of any judgment, order or award--(a) of a tribunal, Court or statutory arbitrator made or purported to be made in the exercise or purported exercise of jurisdiction under any Uttar Pradesh Act or under any Central Act, with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution, or (b) of the Government or any Officer or authority, made or purported to be made in the exercise or purported exercise of appellate or revisional jurisdiction under any such Act of one Judge.]"

Under the above provisions Special Appeal lies against the "judgment.

A Full Bench of this Court in the case of Shital Din & others Vs. Anant Ram, 1933 A.L.J. 127 (FB) while considering the provisions of the Letters Patent of the High Court held as under:

".......on a reading of several clauses of the Letters Patent of the High Court we have come to the conclusion that a final decision, which effectually disposes of the appeal before the High Court, should amount to a judgment, whether it amounts to a decree or not."

The Apex Court in the case of Shah Babulal Khimji Vs. Jayaban D. Kania and another, AIR 1981 SC, 1786 while dealing with an appeal from a suit for specific performance of a contract considered the question as to whether under clause 15 of the Letters Patent, special appeal would be maintainable. In the said case the plaintiff sought an interim relief for appointing a Receiver of the suit property during the pendency of the suit. The learned Single Judge dismissed the application for interim relief. The plaintiff filed special appeal under clause-15 of the Letter Patent, which was dismissed as not maintainable. The Apex Court while reversing the judgment of the appellate court, classified judgments in three categories:-

a)Final judgment

b)Preliminary judgment

c)Intermediary or interlocutory judgment.

It was held by the Apex Court where a proceeding finally terminates after adjudication of all the issues or some of the issues the adjudication is a judgment. The adjudication is also a judgment, even though it does not result in termination of proceedings, if it possesses the characteristics and trappings of a judgment. An order may possess such characteristics and trappings when the order adversely affects a valuable right of the party by deciding an important aspect of the trial in an ancillary proceeding.

The Apex Court in para-119 at page-1817 also held as under:

"(1 ) That the trial Judge being a senior court with vast experience of various branches of law occupying a very high status should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice. Thus, any discretion exercised or routine orders passed by the trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment otherwise the appellate court (Division Bench) will be flooded with appeals from all kinds of orders passed by the trial Judge. The courts must give sufficient allowance to the trial Judge and raise a presumption that any discretionary order, which he passes, must be presumed to be correct unless it is ex facie legally erroneous or causes grave and substantial injustice.

(2) That the interlocutory order in order to be a judgment must contain the traits and trappings of finality either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceedings."

In the case of State of U.P Vs. Kumari Renu Tiwari,1993(2) UPLBEC,1325 the following propositions were laid down:

"(1) When the term "judgment" is used in a Statute or rule linked with the term "decree" as defined in the Code of Civil Procedure, it will have a restricted and narrow meaning but when it is not so linked, it will have a wider connotation;  

(2) ordinarily for an adjudication to be a "judgment" it should bring about termination of the proceeding in which the adjudication is made; and

(3) an order passed on an application for interim relief is ordinarily not a "judgment" but it will qualify to be  called ''judgment' if it affects valuable right of the party or decides an important aspect of the trial and the effect of the order on the party concerned is direct and immediate rather than indirect and remote"

Learned counsel for the appellants during the course of submission could not place anything to pursue us to take a different view and, therefore, in our opinion, the order under appeal cannot be said to be a judgment under the Rules of the Court.  

Even otherwise on merit also, we do not find any reason to differ with the view taken by the Hon'ble Company Judge in the facts and circumstances of the case and thus, for all these reasons, this appeal fails and is hereby dismissed summarily.

Dated:13.4.2006

SKM


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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