Companies Act Case Law Avinash Hansraj Gajbhiye Vs Official Liquidator,M/s V Pharma P Ltd

CASE NO.:
Appeal (civil) 1156 of 2006

PETITIONER:
Avinash Hansraj Gajbhiye

RESPONDENT:
Official Liquidator,M/s. V. Pharma. P. Ltd

DATE OF JUDGMENT: 17/02/2006

BENCH:
S.B. SINHA & P.K. BALASUBRAMANYAN

JUDGMENT:
J U D G M E N T
( @ SPECIAL LEAVE PETITION (CIVIL) NO. 23706 OF 2003)

P.K. BALASUBRAMANYAN, J.

1. Leave granted.
2. This appeal, as can be seen from paragraph 1 of
the Petition for Special Leave to Appeal, challenges the
order of the High Court of Bombay, Nagpur Bench dated
18.7.2003 whereby the Division Bench of the High Court
refused to review its judgment in Company Appeal No. 3 of
2002 dated 19.9.2002 dismissing the appeal. Company
Appeal No. 3 of 2002 was filed by the appellant, the legal
representative of an ex-Director of M/s Vidarbha
Pharmaceuticals Private Limited, a company that went
into liquidation and which was ordered to be wound up in
Company Petition No. 7 of 1985 by order dated 9.11.1998.
Though that appeal was against the order dated 16.8.2002
in Company Application No. 56 of 2001, the appellant
attempted to challenge the earlier orders dated 7.9.2001
and 22.7.1999, passed during the winding up
proceedings. By the order dated 7.9.2001, the Company
Judge had dismissed the application No. 40 of 1999 filed
by the appellant for setting aside the order dated
22.7.1999 passed by him in a misfeasance application,
holding that all the ex-Directors of the Company were
jointly and severally liable under Section 543 (1)(a) of the
Companies Act to pay to the Company an amount of
Rs.6,29,220/- with interest thereon at the rate of 18% per
annum with effect from 6.10.1996 along with the costs of
the proceedings. The order dated 22.7.1999 that was
sought to be challenged was the order on the misfeasance
application. The order dated 16.8.2002 was one by which
the Company Judge rejected an application for review filed
by the petitioner seeking a review of the order passed on
7.9.2001. The appeal was in time only as regards the
order dated 16.8.2002 refusing to review the earlier orders
in misfeasance proceedings passed by the Company
Judge. The appeal was not accompanied by even an
application for condoning the delay in filing the appeal as
against the orders dated 7.9.2001 and 22.7.1999even
though the challenges to them were clearly barred by
limitation. The Division Bench of the High Court,
therefore, ordered on 19.9.2002 that the orders passed by
the Company Judge on 7.9.2001 and 22.7.1999 were not
amenable to scrutiny for their sustainability in the appeal
filed and the appeal had to be confined to one from the
order dated 16.8.2002. Thereafter, the appeal was
dismissed holding that the Company Judge was justified
in refusing to review the orders passed in the Misfeasance
Application. The appellant then filed a petition to review
the judgment in Company Appeal No. 3 of 2002. By order
dated 18.7.2003, the application for review was dismissed.
It is that order that is challenged in this appeal.

3. For the purpose of this case, we do not think it
necessary to consider the question whether the appeal
filed before the Division Bench under Section 483 of the
Companies Act against an order refusing to review the
orders on the Misfeasance Application was maintainable,
the wide words of Section 483 notwithstanding (an order
rejecting an application for review is not appealable even
under the Code of Civil Procedure either under Order XLIII
Rule 1(w) or Order XLVII Rule 7). We proceed on the
assumption that the appeal was maintainable.
4. Learned counsel for the appellant submitted
that the order of the Division Bench sought to be reviewed,
proceeded on the basis that it was an appeal challenging
the order dated 16.8.2002 passed by the Company Judge
dismissing an application for review preferred by the
appellant and the order dated 16.8.2002 passed by the
Company Judge and the challenge thereto, included a
challenge to the prior orders dated 7.9.2001 and
22.7.1999. This argument cannot be accepted. The order
dated 16.8.2002 was that the Petition for review filed by
the appellant seeking a review of the order dated 7.9.2001
passed in Company Application No. 40 of 1999, which was
one for recalling the order dated 22.7.1999 was liable to
be dismissed. The Company Judge after referring to the
facts leading to that application and considering the
merits of that application held that there was no error
apparent on the face of the record which justified a review
of the order dated 7.9.2001. The application for review
was thus dismissed on 16.8.2002. It was this order that
was dealt with in Company Appeal No. 3 of 2002 by the
Division Bench in its order which was sought to be
reviewed. The order specified that the appeal was against
the order dated 16.8.2002. Therefore, the application for
review filed by the appellant before the Division Bench
could be treated only as an application for review of the
order dated 19.9.2002 refusing to interfere with the order
dated 16.8.2002. It is not possible to accept the argument
of learned counsel for the appellant that the Division
Bench while exercising its review jurisdiction or when
called upon to exercise its review jurisdiction was bound
to consider the reviewability or correctness of all the prior
orders including the order on the review petition.
5. While dismissing the Petition for review of the
order dated 7.9.2001, on 16.8.2002, the Company Judge
found on the basis of the material on record of Company
Application No. 40 of 1999 and the contentions sought to
be raised by the appellant that there was no error
apparent on the face of the record in the order dated
7.9.2001. Therefore, what was involved in Company
Appeal No. 3 of 2002 was only the correctness of that
order of the Company Judge and the Division Bench by its
judgment dated 19.9.2002, found no reason to interfere.
The review was sought by the appellant on the basis of
certain additional material which according to him had
relevance and the Company Judge had found that no
ground based on discovery of new and important matter
which after the exercise of due diligence was not within
the knowledge of the appellant or could not be produced
by him at the time when the original order was passed,
was made out. This finding by the Company Judge was
affirmed by the Division Bench in its order dated
19.9.2002. When the appellant sought a review of that
order, as indicated earlier, the Division Bench considered
the conduct of the appellant right through the proceedings
and found that the appellant was indulging in dilatory
tactics just to thwart the order passed by the Company
Judge on the misfeasance application. The court also
found that there was no ground made out for reviewing its
order dated 19.9.2002. On a consideration of the relevant
aspects, we find that the Division Bench and the learned
single Judge were both justified in not acceding to the
prayer for review made by the appellant.

6. Learned counsel for the appellant submitted
that the order on the misfeasance application was made
without the appellant, who was only a legal representative
of one of the Directors, really getting an opportunity to put
forward his contentions. But on the materials, it was
found that he had such an opportunity, a notice in that
behalf having been taken out to him and served on him.
His plea that he had no notice was found to be
unacceptable. It is also seen that instead of taking
appropriate steps at appropriate times, the appellant had
indulged in initiating proceedings one after another which
were all found to be untenable and without merit. In the
circumstances, one can only say that the appellant has to
thank himself for the situation he finds himself in, even if
there is any merit in his claims. The High Court cannot
be faulted for refusing to review its order dismissing the
Company Appeal, or in dismissing the Company Appeal
itself.

7. Thus, we are satisfied that no ground is made
out for interference with the order of the High Court
challenged in this appeal. The order of the High Court is
confirmed and this appeal is dismissed.

Leave a Comment