1. THIS is a revision petition filed against order dated 9.7.2003 passed by the District Consumer Disputes Redressal Forum-II [for short hereinafter referred to as the District Forum] in Execution Case No. 202 of 2002, whereby the District Forum disposed of the execution application saying that since in C.P. No. 93/2001 and Co. A(B) No. 4/1998 in the matter of Reserve Bank of India v. M/s. Rockland Leasing Ltd., the Hon''ble High Court by their judgment dated 5.12.2001 had appointed Provisional Liquidator, the proper remedy left to the Decree Holder is to file his claim with the said Provisional Liquidator.
2. THE learned Counsel for the revisionist Mr. G.D. Hans, Advocate contended that in the order dated 5.12.2001 passed by the Hon''ble Delhi High Court, it is mentioned at page 2 that cases proceeding in various Fora against Sh. J.M. Chawla, Arun Chawla, Tarun Chawla and Ms. Indu Chawla and the Company-Rockland Leasing Limited should continue, if not already concluded. He also placed reliance on the judgment of the Hon''ble National Consumer Disputes Redressal Commission, New Delhi [for short hereinafter referred to as the National Commission] in the case of Ravikant and Another v. Mrs. Veena Bhatnagar and Others, I (1996) CPJ 260 (NC). In the case of Ravikant and Another (supra), the main submission made was that the company was in the process of liquidation and the Hon''ble Company Judge of Delhi High Court vide order dated 3.6.1992 had already given charge of the company to the Official Liquidator attached to the Hon''ble Company Court that all proceedings are liable to be stayed against the company by virtue of the provisions of Section 446 of the Companies Act and further more the charge of the company after appointment of the Official Liquidator/Provisional Liquidator, goes in the exclusive hands of the Liquidator and no attachment or recovery can be made or enforced against the company by virtue of the provisions of Sections 441, 442, 446 and 537 of the Companies Act. It was further argued that a decree holder cannot resort to the recovery by way of simple execution in case of company which is under process of liquidation and the only remedy in such cases is to approach the concerned Company Court under the provisions of preferential payments under Section 530 of the Companies Act.
The Hon''ble National Commission in the last but concluding para observed, inter alia, as under: "Admittedly, no winding up order has been passed of the two companies. The State Commission considered the provisions of 446 of the Companies and held, in our view rightly that from the reading of Sub-section (1) of Section 446 of the Companies Act, it is evident that no proceedings against a company after the appointment of a Provisional Liquidator can be commenced except by the leave of the Court. However, if any proceedings are pending on such date, these can continue till the date when winding up orders are passed by the Court. The proceedings before the State Commission thus could continue in spite of the fact that a Provisional Liquidator has been appointed by the High Court for I.G.F. Leasing (P) Ltd. as the cases were pending on the date of the appointment of the Provisional Liquidator."
The learned Counsel for the revisionist vehemently argued that the proceedings in execution case going on before the District Forum should not have been stayed or the execution application should not have been disposed of in view of the company being gone into liquidation. He further cited the judgment of Tamil Nadu State Commission, Chennai, rendered in the case of V.P. Balasubramaniam v. Srijaianjaneya Associates and Another, I (2001) CPJ 328, wherein the State Commission observed that for the non-compliance of the order of Fora constituted under the Act, action can be resorted to by way of execution proceedings either under Section 25 or 27 of the Act. Lastly, he placed reliance on the case of International Housing Development Corporation Ltd. v. Suniti Pal, I (1998) CPJ 580, wherein the Punjab State Commission held that no bar of Section 446 of Companies Act is attracted to the provisions of Section 27 of the Consumer Protection Act, 1986 [for short hereinafter referred to as the C.P. Act].
3. AFTER going through the case of Ravikant and Another (supra), we are of the opinion that the Hon''ble National Commission has specifically laid down the law that no proceedings against a company after the appointment of a Provisional Liquidator can be commenced except with the leave of the Court as is clear from the reading of Sub-section (1) of Section 446 of the Companies Act. The Hon''ble National Commission further held that if any proceedings are pending on such date these can continue till the date when winding up orders are passed by the Court. But in the present case, the winding up order had already been passed by the Hon''ble Delhi High Court vide order dated 6.12.2001, whereby the Hon''ble Delhi High Court at page 48 of the order held as under:
"As a result of this discussion, CP 93/2001 is allowed and Rockland is ordered to be wound up. Co. A (B) 4/1998 is dismissed. All the connected petitions and applications are disposed of in view of the above..."
It is specifically laid down in Sub-section (1) of Section 446 of the Companies Act, 1956 that if any proceedings are pending on such date these can continue till the date when winding up orders are passed by the Court. In the present case, as extracted above, the Company Rockland Leasing Ltd. has ordered to be finally wound up vide order dated 5.12.2001 by the Hon''ble Delhi High Court, which was subsequently modified vide order dated 6.12.2001 to the extent that instead of the Official Liquidator carrying on the duties and functions mentioned in the judgment, the duties and functions would now have to be carried out by the Official Liquidator attached to this Court, who would act as the Provisional Liquidator and since a Provisional Liquidator had been appointed in the matter, the connected company petitions being infructuous were disposed of as such. However, the petitioners in the connected company matters were left to their remedy of filing claims before the Provisional Liquidator.
4. THE Hon''ble National Commission has also in the case of Dhanalakshmi Consolidates Industries Ltd. v. C.S. Menon, III (1993) CPJ 299 (NC)=1993 (2) CON.LT 409, held that mere pendency of such a petition for winding up is no bar to the entertainment and disposal of these complaints and such a bar will only come into play after a Provisional order of winding up of the company is passed by the competent Court. In the present case, the order for winding up had been passed by the Hon''ble Delhi High Court on 5.12.2001 and, therefore, the bar of Section 446 will come into play in the present case.
In the case of Kamla Devi v. The Udayan Credit and General Investment Co. Ltd., 1993 (2) CON.LT 634, wherein the Hon''ble National Commission upheld the order passed by the State Commission whereby the State Commission dismissed the complaints with the observation that the complainant may now apply for winding up before the proper Forum. In the case of The International Housing Development Corporation (supra), the Punjab State Commission has also held that taking into consideration the provisions of Section 446 of the Companies Act, the matter covered under the provisions of the Companies Act are to be dealt with under such provisions particularly after order of winding up or appointment of Official Liquidator in the process of winding up of a company has been passed. The Punjab State Commission further held that the present appeal challenging the order of the District Forum passed on merits cannot be finally adjudicated in view of the bar provided under Section 446 of the Companies Act.
The learned Counsel for the respondent Mr. Dinesh Kumar, Advocate submitted written arguments, wherein the respondent relied upon a judgment dated 9.7.2003 passed by this State Commission rendered in Appeal 303 of 2003, Tina v. Sh. J.M. Chawla, M.D. Rockland Leasing Limited and Others, whereby connected Appeal Nos. 304 to 310 all of 2003 were also decided. This Commission vide order dated 9.7.2003, observed that since the Provisional Official Liquidator had been appointed in respect of the respondent company-Rockland Leasing Ltd., the appellants, if so advised, could file their claims before the Official Liquidator for their satisfaction out of the assets of the company which is now in possession and control of the Hon''ble Company Judge of High Court through Provisional Official Liquidator.
5. MR. G.D. Hans, Advocate appearing on behalf of the appellants heavily relied on the provisions of Section 27 of the C.P. Act and contended that the provisions of Section 27 of the C.P. Act are penal in nature and the same are not covered by the proceedings under section 446 of the Indian Companies Act, 1956. It may be mentioned that a Full Bench of Hon''ble Andhra Pradesh High Court has in the case of Dr. C.V. Ratnam v. Union of India and Others, 2002 CTJ 421 (Andhra Pradesh High Court) (CP), held in para 45 as under:
"45. Section 27 should not be read in isolation. It should be read in conjunction with Section 25. The provisions of Section 25 or for that matter Section 27 can be taken recourse to only when the order becomes final. As noticed hereinbefore, against the order of District Forum at least two appeals have been provided for whereas against the orders of the State Commission and the National Commission one appeal is provided."
6. THE Hon''ble Supreme Court also considered the constitutional validity of various provisions of the C.P. Act and regarding Sections 25 and 27 of the C.P. Act, the Hon''ble Supreme Court held in the case of State of Karnataka v. Vishwabarathi House Building Co-op. Society and Others, I (2003) CPJ 1 (SC)=I (2003) SLT 435=AIR 2003 Supreme Court 1043, in paras 58 and 59 as under:
"58. Furthermore, Section 27 of the Act also confers an additional power upon the Forum and the Commission to execute its order. THE said provision is akin to Order 39 Rule 2-A of the Code of Civil Procedure or the provisions of the Contempt of Courts Act or Section 51 read with Order 21 Rule 37 of the Code of Civil Procedure. Section 25 should be read in conjunction with Section 27. A parliamentary statute indisputably can create a Tribunal and might say that non-compliance of its order would be punishable by way of imprisonment or fine, which can be in addition to any other mode or recovery.
59. It is well settled that the cardinal principle of interpretation of statute is that Courts or Tribunals must be held to possess power to execute their own order."
The settled position of law is thus the provisions of Sections 25 and 27 of the C.P. Act are to be read in conjunction and not in isolation. Resort to Section 27 of the C.P. Act is to be taken as a last resort as held in the case of Dr. C.V. Ratnam [supra]. The proceedings for implementation of the impugned order are initially to be undertaken under Section 25 of the C.P. Act. In the present case, the company has finally been ordered to be wound up vide order dated 5.12.2001 passed by the Hon''ble Company Judge of High Court of Delhi and a Provisional Official Liquidator attached to the Court of Hon''ble Company Judge has been appointed who would act as the Provisional Liquidator. The bar of Section 446 will definitely come into play, once the company has finally been ordered to be wound up vide order dated 5.12.2001 of the Hon''ble Company Judge and it is so held by the Hon''ble National Commission in the case of "Ravikant and Another (supra) that if any proceedings are pending on such date, these can continue till the date when winding up orders are passed by the Court. But in the present case, as mentioned above, the Company-Rockland Leasing Limited has ordered to be wound up vide order dated 5.12.2001 by the Hon''ble Company Judge of Delhi High Court. Since the Company-Rockland Leasing Ltd. has been finally wound up and a Provisional Official Liquidator has been appointed in respect of the respondent company, the revisionist, if so advised, can file their claims before the Official Liquidator for their satisfaction out of the assets of the company which is now in possession and control of the Hon''ble Company Judge of High Court through the Provisional Official Liquidator. Resultantly, the revision petition lacks merit and is dismissed. Copies of this order be sent to the parties free of charge. Revision Petition dismissed.
