Review Petition No.8 of 2002,Company Petition No.420 of 2002,Company Application No.229 of 2002

30th November, 2002

Petitioner Counsel: Mr. G.R. JOSHI, Desai & Diwanji
Respondent Counsel: Mr. R.M. KADAM, Mr. B.B. SARAF, Mahimtura & Co.

Cases Cited:
Smt. Jatan Kanwar Golcha Vs. M/s. Golcha Properties Ltd., AIR 1971 S.C. 374 [Para 2,3]
Fakir Mohamed Razak Vs. The Charity Commissioner, Bombay AIR 1976 BOMBAY 304 [Para 2,4]
Bharat Singh Vs. Firm Sheo Pershad Giani Ram, AIR 1978 Delhi 122 [Para 2,4]
K. Ajit Babu Vs. Union of India, (1977) 6 S.C.C. 473 [Para 2,3]
Union of India Vs. Raman Iron Foundary, (1974) 2 S.C.C. 231 [Para 5]

JUDGMENT

JUDGMENT :- At the threshold it was contended on behalf of the Respondent company that petition for review considering Order 47 was not maintainable. In so far as power of review is concerned, it is now a settled proposition of law that the power to review must be conferred for exercising the power of review. The company court while exercising jurisdiction under the Companies Act does not cease to be civil court. The rules framed under the Companies Act, will be applicable to company proceedings. In the absence of any specific rule, procedure provided under the Code of Civil Procedure would be applicable. In the instant case, order 47 is power of the Civil Court and in those circumstances, the High Court functioning as a company court, but none the less a Civil Court has the power of review.

2. The only question which remains to be answered is whether the power of review can be exercised at the instance of the party who was not a party to the proceedings. This is the argument which learned counsel for the company has raised considering language of Order 47, that the order sought to be reviewed by this court cannot be reviewed. Order 47 rule 1 provides that the application for review is maintainable at the instance of any person aggrieved by decree or order from which appeal is allowed but from which no appeal is preferred, or from a decree or order from which no appeal is allowed, or reference of the court of small causes. In so far as Order 47 rule 2 is concerned, it is the specific power only of a party to the proceeding. In other words, the legislature has chosen to use two different expressions one in so far as "Person aggrieved" in Order 47 rule 1 and any party under Order 47 rule 2.

The court therefore, will have to consider the expression under order 47 of C.P.C. On behalf of the petitioners, their learned counsel relies on the judgment of the Apex Court in the case of Smt. Jatan Kanwar Golcha Vs. M/s. Golcha Properties Private Ltd. AIR 1971 S.C. 374. We are not really concerned with the facts of that case but considering the expression "person aggrieved" under section 96, the Apex Court has observed as under.

"It is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the appellate Court and such leave should be granted if he would be prejudicially affected by the Judgement."

A Division Bench of this court in Fakir Mohamed Abdul Razak Vs. The Charity Commissioner, Bombay and others, AIR 1976 BOMBAY 304 considering Section 96 of the C.P.C. held that it is well settled position in law that there is nothing in section 96 which lays down that it is only party to the suit who can file appeal. Section 96 of the C.P.C. does not use the expression other person or party. It is in that context that the court held that even a person who is not party to the proceeding can prefer an appeal. The learned counsel on behalf of the company relied on the Division Bench judgment of the Delhi High Court in the case of Bharat Singh Vs. Firm Sheo Pershad Giani Ram and others, AIR 1978 Delhi 122, which has taken a view that it is only a party to the lis who can prefer review and other person adversely affected can take such steps which may be available to them in law to protect their rights as and when the adverse order or decree is sought to be enforced so as to protect their rights. It seems that the attention of the Division Bench of Delhi High Court was not drawn to the observations of the Apex Court in the case of Smt. Jatan Golcha (supra) as referred to earlier. The learned counsel also relied on the judgment of the Apex Court in the case of K. Ajit Babu and Others Vs. Union of India and Others (1977) 6 S.C.C. 473.

3. Having heard learned counsel, I am of the opinion that expression person aggrieved under Order 47 rule 1 is wider in amplitude and scope than the expression Party under Order 47 rule 2 which restricts the parties to the lis. This is the view taken by Apex Court in Smt. Jatan Golcha (supra). It is also the view of the Apex Court in the case of K. Ajit (supra). In the case of K. Ajit in proceedings arose from an Order of Central Administration Tribunal. The issues raised were whether power of review was available to the Tribunal and whether a person not a party to the order could prefer a review. After considering the scope and effect thereto in Paragraph 4 of the judgment, the Apex court finally observed as under :

"We therefore find that a right of review is available to the aggrieved persons on restricted ground mentioned in Order 47 of the Code of Civil Procedure if filed within the period of limitation."

4. In other words to maintain an application for review, the party must satisfy two tests. Firstly that the party is aggrieved and secondly that the review is filed within the prescribed period of limitation. The use of expression "prescribed period of limitation" will be subject to Section 5 of the Limitation Act. Considering the two judgements of the Apex Court and Division Bench of this court in the case of Fakir Mohd. (supra), it is clear that review at the instance of a person aggrieved and filed within the period of limitation would lie and to that extent the judgment of Division Bench of Delhi High Court in the case of Bharat singh (supra) does not correctly lay down the law. In respect of a company petition before the company court, therefore, clearly a review petition would lie at the instance of a party aggrieved.

5. Petitioner before this court by the present review application seeks review of the order passed by the Company Court dated 6.6.2002 in company petition No.420 of 2002. The case of the Petitioner is that he was creditor within the meaning of section 10 of the Companies Act and as such ought to have been heard before the order was passed. In the review petition, contention is that the petitioner was creditor as per Exh.5 to the petition. Perusal of Exh.5 would show that the rent as and upto July, 2002 had been paid. Petition was filed on 15.4.2002 and order was passed on 6.6.2002. The claim of which Petitioner contended that he was creditor was in respect of mesne profits. The review petition proceeds on the footing that as mesne profits can be claimed by the Petitioners that would be "debt" and therefore, petitioner would be creditor. In so far as this aspect is concerned, mesne profits would be of compensation for occupation of the premises after termination of the tenancy. In other words, these would be "damages" which the court would have to ascertain considering the Judgment in Union of India Vs. Raman Iron Foundary, (1974) 2 S.C.C. 231, the damages would become debt only on decree being passed by this court. That event has yet to happen and in these circumstances, at least today the claim for mesne profits cannot be said to be debt which would entitle the petitioner to notice, if any under section 10 of the Companies Act. It is then contended that the municipal taxes for the period April 2000 to September, 2000 at least would be payable. There is nothing on record to show when the demand was made or when the municipal taxes were to be paid. It is no doubt true that apart from rent, Petitioner is entitled to claim taxes. However, what is important to bear in mind is that whether on the date when the petition was filed, the company was indebted to the Petitioners. There is no material before this court to so hold. Under Section 101 before giving effect to a resolution of the company for reduction of share capital, the court in those situations which would result in diminution of liability in respect of unpaid share capital or payment to any share holders of any paid up share capital has to issue notice to the parties set out therein. That is not the case here. However, the court can still direct notice. In the instant case, considering section 102 notice was dispensed with. The case of the company was that there was only one creditor. Notice otherwise was published in the Times of India inviting objections. No objection was received and it is in those circumstances, the court proceeded to confirm the resolution of the share holders reducing the share capital. Considering that aspect, to my mind, this would not be a case which would fall within Order 47 rule 1 for the court to review its earlier order dated 6.6.2002.

Review application rejected.

Application dismissed.