JUDGMENT
D.P. Wadhwa, J.
(1) In the present winding up petition by this order I am deciding a preliminary objection raised .by the company as to maintainability of the petition. The objection is on the ground that the petition is not supported by an affidavit duly verified as required under Rule 21 of the Company (Court) Rules, 1959 (for short the Rules’).
(2) The respondent company is engaged in the business of colonisation and acts as builders and colonisers. This is as per Clause-8 of the Memorandum of Association of the company. It is stated that some tune in 1962 the company offered to sell plots of land in the Eros Garden Colony developed by it. There was large scale of advertisement. The colony is stated to be situated near Suraj Kund in the State of Haryana. There are as many as 17 petitioners who, it is alleged, wanted to buy plots and paid varying amounts to the company during the period 1963-64. The details as to which plots these petitioners wanted to buy and were allotted and the amounts paid by them have been set out in the petition. For the purpose of present order it is not necessary to refer to all the details except to note that some of the grounds mentioned for winding up the company are that the substratum of the company has gone and that company is using the amounts paid by the petitioners as plot holders and of other plot holders in other business activities of the company and that company is suffering loss in all its financial activities and that it is just and equitable that the company be wound up. It is alleged that the company is guilty of breach of contract and is commercially insolvent. Again, I need not refer to the alleged acts of mis-management as given in the petition for the purpose of this order. The petitioners feel aggrieved that all these years they have been deprived of their moneys and given false promises.
(3) The petition was filed on 1st February, 1985. At that time there were 22 petitioners. It was supported by an affidavit of Mr. R. N. Paul-one of the petitioners. By order dated 11th April, 1985 it was noted that some of the petitioners had died and that had. therefore, necessitated filing of an amended petition. This amended petition was filed on 1st July, 1985. This time also it was supported by an affidavit of Mr. R. N. Paul The company raised objection that the amended petition was defective inasmuch as it had not been signed by any of the petitioners. It was signed only by the advocate of the petitioners.
(4) It was pointed out that counsel for the petitioners had not filed his power of attorney on behalf of all the petitioners. This led to filing of another amended petition on 4th October, 1985 signed by all the petitioners. Again this was supported by an affidavit of Mr. R. N. Paul. It is this affidavit which has been the subject of objection by the company and it is submitted by the company that the petition must fail on that account as filing of affidavit as required by the Rule is mandatory. It was submitted that the affidavit filed along with the original petition. could not be looked in to after the amendment of the petition and again it was mentioned that that affidavit also did not conform to the mandatory requirements of the Rules.
(5) These submissions were disputed by the petitioners and it was submitted that in any case the Court had ample powers to permit the petitioners to file an affidavit in terms of the Rules.
(6) The present petition for winding up is under Sections 433 and 439 of the Companies Act, 1956. It is yet at the admission stage. Section 443 prescribes various modes by which this petition could be disposed of. Rules have been framed by She Supreme Court in the exercise of its powers conferred by Section 643 of the Companies Act. No doubt these have been framed under the statutory powers. Under Rule-6-practice and procedure of the Court and provisions of the Code of Civil Procedure would be applicable to all proceedings under the Act and the Rules. This would be if it is not otherwise provided by the Act or by the Rules. It is mentioned in this Rule that the Registrar may deadline to accept any document which is presented otherwise than in accordance with these Rules or the practice and procedure of the Court. Under Rule-7 the Court has power to enlarge or abridge time appointed by the Rules. Rule-9 saves inherent powers of the Court. The Court has all the inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of process of the Court. Rule– 21 is as under :- “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 case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof; such affidavit shall be fixed along with the petition and shall be in Form No. 3 : Provided that the Judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the petitioner to make and file the affidavit.”
Under Rule 18 every affidavit is to be drawn up in the first person and should give the particulars of the deponent as men- tioned therein. It is to be signed by the deponent and sworn to in the manner prescribed by the Code or the rules and practice of the Court.
(7) Tinder Rule 17 the Forms set forth in Appendix I (which contains Form No. 3), here applicable, shall at used with such variations as circumstances may require. Relevant portion of Form No. 3 is as under :- “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.”
Let me now set out the affidavit in support of the amended petition. It is quite in brief and is as under :- “1.Rajendra Nath Paul, the above named, do hereby declare on solemn affirmation as under :– 1 That I am one of the petitioners in the Company Petition No. 22 of 1985. 2 That I have instructed Shri G. R. Chopra, Advocate to prepare an amended Company petition. In the amended petition, those petitioners who could not file the petition for one reason or the other, have been dropped. The company petition now is in accordance with the direction of the Hon’ble Court, the amended petition has been signed by all the 16 petitioners. sd/- Deponent Verification : Verified at New Delhi on this 4th day of October, 1985 that the contest of my above affidavit are true and correct to my knowledge, no part of it is false, nothing has been concealed there from. sd/- DBPONENT”
No argument is needed to show that this is hardly in the form prescribed and does not meet the requirements of Rule-21 and Form No. 3. In the affidavit in support of the original petition facts have been mentioned which also find mention in the petition It is stated that the deponent Mr R. N. Paul is one of the petitioners and is fully aware of the facts enumerated in the petition for winding up and that he had been persuing the claims of the petitioners who are party to the petition. This affidavit also in terms does not meet the requirements of Form No. 3 which has been set out above.
(8) Mr G. L. Rawal, learned counsel for the company, submitted that since the petitioners did not comply with the mandatory requirements of the Rules, the petition has to be thrown out as not maintainable. In support of his submissions he referred to a decision of the Calcutta High Court in Kaya Textiles Private Ltd. etc. vs. Star Textile Engineering Works. Ltd. where it was said that a defect in verification of a winding up petition was entirely different than any such defect in the case of a plaint and that different considerations would apply. It was said that the allegations in the plaint could be acted upon only on the proof of the same by evidence or upon admission by the defendant and that the allegations in a petition for winding up were, however, to be treated by the Court as evidence without any further proof. It was also stated in this judgment that a winding up order related back to the date of presentation of the petition and that from such date there was no proper verification then there was no petition at all on which the Court could proceed. On the question as to whether the Court could permit the petitioner to re-file the affidavit the Court observed as under :- “IF leave to verify such a petition is granted, the winding up order would come into existence on the date of such re-verification and this would create a good deal of confusion regarding assets of the company and rights of third parties. Such leave therefore could not be granted.”
This judgment of the Calcutta High Court was followed by the Punjab and Haryana High Court in Mool Chand Wahi v. National Paints (P) Ltd. (1984 Plr 182) (2). This judgment was again confirmed in appeal before the Division Bench of the Punjab and Haryana High Court and that decision is reported in (1986) 60 Comp. Cus. 402.
(9) No doubt these judgments do support the objection raised by Mr. Rawal but with great respect I do not find in agreement with the views expressed therein. I do not think that the defect in the verification is so fatal that it could not be remedied. The Court can in its inherent powers allow the petitioners to present an affidavit in support of the 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. Of course, this the Court would do in the ends of justice and if the circumstances of the case so required. Mr. G. R. Chopra, learned counsel for the petitioners, said that the defect, if any, was not such that it could not be cured. He, however, insisted that in any case the affidavit filed originally with the petition did in substance meet the requirements of the Rules. In support of his submissions he referred to a decision of the Bombay High Court in Western India Theatres Ltd. vs Ishwarbhai Patel wherein the Court observed that the legal consequence of a petition for winding up not being properly signed by the petitioner was a mere irregularity which could be cured at any time. Mr. Chopra also referred to the definition of ‘affidavit’ us given in sub-section (3) of Section 3 of the General Clauses Act) 1887. Under this ‘affidavit’ shall include affirmation and declaration in. the case of persons by law allowed to affirm or declare instead of swearing. It was the submission of Mr. Chopra that no verification to the affidavit in the present case was required and that Rule-22 and Form No. 3 merely stipulated an affidavit verifying the petition. I think Mr. Chopra is right in this submission of his.
(10) It was not disputed that the Court could permit amendment of the petition. As noted above in the present case amended petition was in fact filed and no objection raised. The amended petition would relate back to the filing of the original petition. Under Rule-101 the Court could substitute a creditor or contributory or the original petitioner and.in that case would permit such amendment of the petition as might be necessary. Under Rule 102 the amended petition shall be treated as the petition for the winding up of the company and shall be deemed to have been presented on the date on. which the original petition was presented. Under Section 21 of the Limitation Act, 1963 where-after the institution of a suit a new plaintiff or defendant is substituted or added, the suit shall, as regards him be deemed to have been instituted when he was so made a party. But, there is a proviso and it says that where the Court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date. I am mentioning all this to show that dating back of the petition under various circumstances is not something new to the law. If the effect of permitting an act is to relate back the petition, otherwise initially defective to its original date filing, this could be permitted in the ends of justice and the Court will see if any prejudice is being caused to the other party which could not be compensated by costs or otherwise. A balance has to be struck between two warring parties. If amendment of the petition can be allowed there does not seem to be any reason as to why a defective affidavit verifying the petition could not be rectified. I do not think Court is helpless in a case where the affidavit verifying the petition is not in Form No. 3 and that the petition invariably has to be dismissed on that account. In the case of verification to the plaint it is now settled that a defect in verification is only an irregularity in procedure and will not be a ground for rejecting the plaint and that it could be cured at any stage of the suit. Merely because the averments in the petition could be treated as evidence without any further proof should not. in my view. be a ground for the Court to treat a defective affidavit verifying the petition as fatal to the petition. I would import the same principles as for verification of the plaint extent I would say that in case of a winding up petition Court will not permit the 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. I did ask Mr. Rawal if the effect of permitting the petitioners to file a proper affidavit would relate back to the filing of the original petition which according to him is not permissible, what rights of the third parties in the present case can be said to have been affected. He could not give any specific instance except to aver that during the period when this petition was pending various other contracts have been entered into by the company with third parties. I am not inclined to accept the submissions of Mr. Rawal and I don’t think there is any bar coming in my way in permitting the petitioners to file a proper affidavit verifying the petition.
(11) The case is at a preliminary stage and the petition is yet to be admitted. The petition was originally filed by as many as twenty two petitioners and now there are seventeen petitioners. They have made serious allegations against the company and contend that in the circumstances of the case it is just and equitable that the company be wound up. They have stated that all these years the company has misutilised their money. I would not like to push them to a new petition and would permit them to file an affidavit verifying the petition in Form No. 3. I am reminded of the following passage.
(12) In civil jurisprudence it too often happens that there is so much law that there is no room for justice, and that the claimant expires of wrong in the midst of right, as mariners die of thirst in the midst of water. (Coltan)
(13) If reference is made again to Rule-6 it would appear that it is at the stage of filing that the Registrar could decline to accept any document presented otherwise than in accordance with the Rules or the practice and procedure of the Court.
(14) I would, therefore, over-rule the objections of the company as to the maintainability of the petition on the grounds mentioned in paras 2 and 3 of the preliminary objections in its reply. Petitioners would, however, pay a sum of Rs. 500.00 as costs. The affidavit in the form prescribed will be filed within two weeks.