High Court of Judicature at Allahabad

HIGH COURT OF JUDICATURE AT ALLAHABAD

Reserved

Company Petition No. 46 of 2002

M/s Paharpur Cooling Towers Ltd........................Petitioner

Versus

M/s Anuradha Masala Udhyog Pvt. Ltd. .................Respondent

*****

Hon'ble S.P.Mehrotra, J.

Order On

1-Company Application No. 73312 of 2004 (Paper No. A-9).

2-Company Application No. 72405 of 2004 (Paper No.A-10).

The aforementioned Company Petition No. 46 of 2002 has been filed by M/s Paharpur Cooling Towers Limited (Petitioner-Company), under Section 433 (e) read with Section 434 (1)(a) and Section 439 of the Companies Act, 1956, inter-alia, praying that the Respondent-Company, namely, M/s Anuradha Masala Udhyog Pvt. Lmt., having its Registered Office at 59/132-A, L-2-4, Akash Deep Building, Old Dalmandi, Nayaganj, Kanpur (U.P.) -208001 be wound up by this Court under the provisions of the Companies Act, 1956.

An Affidavit, sworn on 6th September, 2002 by Santosh John, stating himself to be an Officer in the Petitioner-Company, has been filed along with the said Company Petition.

On 10th September 2002, when the case was taken up, none appeared for the petitioner. Therefore, the Court by its order dated 10th September, 2002 directed that Company Petition be "put up tomorrow as a fresh matter before the appropriate Bench".

It further appears that by the order dated 12th September 2002, the Court permitted the Petitioner-Company to move Amendment Application for amending paragraph 1 of the Company Petition as the address of the Petitioner-Company for service of notice was mentioned, as that of its counsel at New Delhi.

The said order dated 12th September, 2002 is reproduced below :

"As prayed, list on 3rd October, 2002 to enable the petitioner to move amendment application for amending paragraph 1 of this petition, which states that the address of the petitioner for service of notice is of its counsel at New Delhi. Under the rules of the Court before filing any document or the Counter Affidavit its copy is required to be served on the other side and endorsement is to be obtained on the original, regarding receipt. It would be most unreasonable to expect the opposite party in response to the notice, if issued, to go to New Delhi to serve the copy of the Counter Affidavit."

It further appears that pursuant to the said order dated 12th September, 2002, an Amendment Application dated 30th September, 2002 (Paper No.A-5) was filed on behalf of the Petitioner-Company, inter-alia, praying for being permitted to amend Paragraph 1 of the Company Petition as also Prayer (b) in the Prayer Clause of the Company Petition.

By the order dated 3rd October 2002, the said Amendment Application dated 30th September, 2002 (Paper No. A-5) was allowed, and notice of the amended Company Petition was directed to be issued to the Respondent-Company. The said order dated 3rd October, 2002 is quoted below :

"Amendment Application dated 30-09-2002 is allowed, Necessary amendment may be incorporated in the original petition within three days. After amendment is in-corporated, notice of amended petition will be issued to the Respondent/ Company i.e. M/s Anuradha Masala Udhyog Pvt. Ltd. Notices will be made returnable at an early date."

It further appears that a Counter Affidavit, sworn on 12th October 2003, in reply to the said Company Petition was filed on behalf of the Respondent-Company.

The Petitioner-Company filed its Rejoinder Affidavit, sworn on 22nd November, 2003 (Paper No. A-12), in reply to the said Counter Affidavit filed in the main Company Petition.

It further appears that on 31st March, 2004, the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9), shown at Serial No. 1 above, was filed on behalf of the Respondent-Company.

It is, inter-alia, stated in the said Company Application (Paper No.A-9) that the Affidavit, filed in support of the Company Petition, is no Affidavit in the eyes of law, inasmuch as, the mandatory requirements of Rule 21 and Form 3 of the Companies (Court) Rules, 1959 have not been complied with; and that since there is no Affidavit in support of the Company Petition, as required by Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition, in this Form, is not maintainable and is liable to be dismissed.

It is, inter-alia, prayed in the said Company Application (Paper No. A-9) that the present Company Petition be dismissed as not maintainable.

An Affidavit, sworn on 30th March 2004, was filed in support of the said Company Application (Paper No. A-9).

By the order dated 31st March 2004, the Court, inter-alia, granted time to the learned counsel for the Petitioner-Company for filing reply to the said Application.

The said order dated 31st March, 2004 passed on the said Application (Paper No. A-9) is as follows :

"The present application has been filed today on behalf of the respondent-company.

Registry is directed to give appropriate number to the application.

Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted one week's time for filing reply to the present application. The respondent-company may file its Rejoinder Affidavit within another week thereafter.

List this case on 20-4-2004."

It further appears that on 17th April, 2004, the Petitioner-Company filed its Reply (Paper No.A-11) in reply to the Company Application (Paper No. A-9). The said Reply, filed on behalf of the Petitioner-Company, was accompanied by an Affidavit, sworn on 13th April, 2004.

It further appears that on 17th April, 2004, the Petitioner-Company also filed the aforementioned Company Application No. 72405 of 2004 (Paper No.A-10), shown at Serial No. 2 above, under Rules 6, 9 and 21 of the Companies (Court) Rules, 1959 read with Section 151 Code of Civil Procedure.

It is, inter-alia, stated in the said Application (Paper No. A-10) that the Affidavit filed on behalf of the Petitioner-Company in support of the Company Petition substantially complied with the requirements of Form 3 of the Companies (Court) Rules, 1959, but in order to put the controversy to rest, the Petitioner-Company seeks leave of this Court to file an additional Affidavit of Santosh John, who is working as Assistant Manager (Administration) with the Petitioner-Company, in support of the said Company Petition verbatim as prescribed in Form 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959.

An Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as an Assistant Manager with the Petitioner-Company, was filed along with the said Company Application (Paper No. A-10) in support of the said Application (Paper No.A-10).

Further, an Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as Assistant Manager (Administration) with the Petitioner-Company, was filed in Form No.3 as Annexure ''A' to the said Company Application (Paper No.A-10) and its supporting Affidavit.

It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file an Affidavit in the prescribed Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959 of Santosh John, Assistant Manager (Administration), which has been annexed as Annexure ''A' to the said Company Application (Paper No. A-10).

It further appears that on 10th May, 2004, a Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No. A-14), was filed on behalf of the Respondent-Company in reply to the aforesaid Reply (Paper No. A-11), filed on behalf of the Petitioner-Company.

Further, on 10th May, 2004, a Counter Affidavit, sworn on 30th April, 2004 (Paper No. A-13), was also filed on behalf of the Respondent-Company in reply to the aforesaid Company Application (Paper No.A-10), filed on behalf of the Petitioner-Company.

In the circumstances, the Court passed the following order on 10th May, 2004:

"Counter Affidavit has been filed today on behalf of the Respondent-Company in reply to Civil Misc. Application No. 72405 of 2004 (Paper No. A-10).

Sri Rajiv Nayan holding brief for Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted two weeks' time for filing Rejoinder Affidavit to the said Counter Affidavit.

Rejoinder Affidavit has been filed today on behalf of the Respondent-Company against the reply filed on behalf of the petitioner (Paper No.A-11) in respect of Civil Misc. Application No. 73312 of 2004 (Paper No. A-9) filed on behalf of the Respondent-Company.

List this case on 9-7-2004"

On 9th July, 2004, a Rejoinder Affidavit, sworn on 8th July, 2004, was filed on behalf of the Petitioner-Company in reply to the aforesaid Counter Affidavit (Paper No.A-13), filed on behalf of the Respondent-Company.

I have heard Sri Anil Sharma, learned counsel for the Respondent-Company and Sri Deepak Sabarwal, learned counsel for the Petitioner-Company at length in respect of the aforesaid Company Application No.73312 of 2004 (Paper No. A-9) as also the aforesaid Company Application No. 72405 of 2004 (Paper No. A-10), and perused the record.

Sri Anil Sharma, learned counsel for the Respondent-Company has made the following submissions :

1-Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition, presented by a body corporate, shall be verified by an Affidavit made by a Director, Secretary or other Principal Officer of such body corporate. The said Rule 21, inter-alia, further provides that the said Affidavit shall be filed alongwith the Company Petition and shall be in Form No.3.

2. It is not disputed that the Affidavit in support of the present Company Petition has been given by Santosh John who is a Principal Officer of the Petitioner-Company. However, verification of various paragraphs of the Company Petition has not been done as per the requirements of paragraph 2 of the Affidavit given in Form No.3 of the Companies (Court) Rules, 1959.

It is pointed out that paragraph 2 of the Affidavit, given in Form No. 3 of the Companies (Court) Rules, 1959, makes it obligatory upon the deponent of the Affidavit to state as to which paragraphs of the Company Petition are true to his personal knowledge and which paragraphs of the Company Petition are based on information. This mandatory requirement has not been complied with in the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition.

Consequently, the said Affidavit filed in support of the present Company Petition is no Affidavit in the eyes of law. As there is no Affidavit in support of the present Company Petition as per the requirements of Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition is not maintainable and is liable to be dismissed, as prayed for in the said Company Application (Paper No. A-9).

3. In a Winding up Petition, if the supporting Affidavit is not in Form No.3, then there is no Winding up Petition before the Court. This is because, the statement made in the Winding up Petition must be supported by an Affidavit in Form No. 3, as provided in Rule 21 of the Companies (Court) Rules, 1959.

4. The Petitioner-Company has taken contradictory stand in its Reply (Paper No. A-11). On the one hand, the Petitioner-Company maintains that the Affidavit filed in support of the present Company Petition substantially complied with all the requirements of Form No. 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company sought permission /opportunity to file a fresh Affidavit in support of the present Company Petition in accordance with the relevant Rule and Form as per the provisions of the Companies (Court) Rules, 1959.

Reference is made to paragraphs 3 and 4 of the preliminary objections and paragraph 6 of the Reply on merits, as contained in the said Reply (Paper No. A-11) filed on behalf of the Petitioner-Company.

5. Section 441 of the Companies Act, 1956, inter-alia, provides that the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up. Therefore, the date of presentation of the Petition for the winding up, duly supported by an Affidavit, as required by the Companies (Court) Rules, 1959, is the material date.

As such, it is not open to the Petitioner-Company to file an Affidavit subsequent to the presentation of the Petition for the winding up. The Affidavit in proper Form must accompany the Petition for the winding up. Subsequently, the Petitioner-Company cannot be permitted to file an Affidavit in Form No. 3. Once, the Petition for the winding up is presented, then at no stage, the Petitioner-Company can be permitted to file an Affidavit in Form No. 3.

6. It is pointed out that the winding up order relates back to the date of presentation of Winding up Petition. In case, permission is granted to file an Affidavit in Form No.3 subsequent to the presentation of the Winding up Petition, then various difficulties/ complications would arise.

It is submitted that a proper Affidavit must accompany the Winding up Petition at the time of presentation of the Petition. In case, proper Affidavit is not filed with the Winding up Petition when presented, the Petition would be a defective Petition. Such a Petition would be no Petition in the eyes of law.

Now if the defect in the Winding up Petition is permitted to be removed subsequently by permitting the petitioner to file a fresh Affidavit then the Winding up Petition would be deemed to be presented on the date of removal of such defect.

This will result in various difficulties / complications. For example, the Company in question, may transfer its assets during the period between the date of presentation of the Winding up Petition and the date of filing of subsequent Affidavit, and may contend that such transfer cannot be assailed on the ground of fraud as there was no Winding up Petition pending in the eyes of law on the date of such transfer.

Similarly, during the period between the date of presentation of Winding up Petition and the date of filing of subsequent Affidavit, the debt on the basis of which the Winding up Petition has been filed, may become time-barred. Now the Winding up Petition cannot be filed on the basis of such time-barred debt. Permitting the petitioner to file subsequent Affidavit will result in the entertainment of the Winding up Petition on the basis of such time-barred debt.

It is also pointed out that under Section 447 of the Companies Act, 1956, the winding up order operates in favour of all the creditors and of all the contributories of the Company as if it had been made on the joint Petition of a creditor and of a contributory.

In case, permission is granted to file Affidavit subsequently, further complications would arise in view of the provisions of Section 447 of the Companies Act, 1956.

7. Sri Sharma has placed reliance on the following decisions:

(i)- In the matter of Gaya Textiles Private Ltd. etc. and Star Textile Engineering Works Ltd., AIR 1968 Calcutta 388 (Paragraphs 4, 5, 11 and 12).

(ii)- Mool Chand Wahi vs. National Paints Pvt. Ltd. & another, [1986] 60 Company Cases 198 (P. and H.), which was a decision by a learned Single Judge of the Punjab and Haryana High Court.

(iii)- Mool Chand Wahi vs. National Paints (Pvt.) Ltd. & another, [1986] 60 Company Cases 402 (P. and H.), wherein a Division Bench of the Punjab and Haryana High Court affirmed the aforesaid decision of the learned Single Judge in Mool Chand Wahi case (supra).

(iv)- Registrar of Companies, Punjab Vs. New Suraj Financiers and Chit Fund Co. (P) Ltd., [1996] 4 Company Law Journal 308 (P & H) :[1990] 69 Comp Cases 104 (P. & H.).

In reply, Sri Deepak Sabarwal, learned counsel for the Petitioner-Company has made the following submissions:

1. It is not disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit filed along with the Company Petition, was authorised to swear Affidavit on behalf of the Petitioner-Company.

The objection raised on behalf of the Respondent-Company is only in regard to the Form of the said Affidavit, namely, verification of the contents of the Company Petition as contained in paragraph 2 of the said Affidavit.

Reference in this regard is made to paragraph 9 of the Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No.A-14), filed on behalf of the Respondent-Company.

In the said paragraph 9 of the Rejoinder Affidavit, it is, inter-alia, stated as follows ".......It is no where stated by the Respondent-Company that Sri Santosh John was not authorised."

2. Three questions arise for consideration in the present case:

(A) If the Affidavit in support of the Winding up Petition is not para-materia with the prescribed Form No.3, is the Winding up Petition liable to be dismissed ? In other words, whether strict compliance with Form No.3 is necessary or substantial compliance with Form No.3 would suffice ?

(B) Is the prescription in Form No.3 mandatory in nature ? In other words, whether non-compliance with Form No. 3 is an illegality, or is a mere irregularity ?

(C ) In case, the Affidavit filed in support of the Winding up Petition is found to be defective on account of non-compliance with Form No. 3, whether fresh opportunity should be given to rectify the defect ?

Answering the above questions, it is submitted :

(A)Substantial compliance, and not strict compliance, with Form No.3 is necessary.

(B)In case, there is any non-compliance with Form No. 3, the same is a mere irregularity.

(C)In case, the Affidavit is found to be defective on account of non-compliance with Form No.3, then opportunity should be given to rectify the defect.

Reliance in this regard is placed on the decision of the Apex Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., 1993 Supp. (3) Supreme Court Cases 565.

3. In view of the aforementioned Supreme Court decision in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd. case (supra), overruling the Division Bench decision of the Punjab and Haryana High Court, the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), relied upon by the learned counsel for the Respondent-Company, stood overruled.

Similar will be the fate of the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra) wherein the Division Bench decision of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) was relied upon.

Further, the decision of the Calcutta High Court in Gaya Textiles case (supra), relied upon by the learned counsel for the Respondent-Company, also stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) followed the said decision of the Calcutta High Court in Gaya Textiles case(supra).

Reference is further made to the decision of the learned Single Judge of the Punjab & Haryana High Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Limited, [1989] 65 Company Cases 546 (P. & H.) which was challenged before the Division Bench of the Punjab & Haryana High Court. Against the decision of the Division Bench of the Punjab & Haryana High Court, Appeal was filed before the Supreme Court which was decided by the Supreme Court by its aforementioned decision reported in 1993 Supp.(3) SCC 565.

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in his decision in Malhotra Steel Syndicate case (supra) expressed his doubt about the correctness of the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra).

4. The submissions made under heads (2) and (3) above are supported by the following decisions, wherein the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed :

(i)DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj.).

(ii)WELDING RODS PVT. LTD. Vs. INDO BORAX AND CHEMICALS LTD.,[2002] 108 Company Cases 747 (Guj.).

It is further submitted that the following decisions further support the submissions made under heads (2) and (3) above :

(1)MRS.ROMA DEB AND OTHERS Vs. R.C.SOOD & CO. PVT. LTD., [1990] 67 Company Cases 350 (Delhi).

(2)D & H SECHERON ELECTRODES (P) LTD. Vs. VOLTARE ELECTRODES (P) LTD., [1997] 89 Company Cases 592 (A.P.).

(3)SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.).

(4)EMA INDIA LIMITED Vs. TRACKPARTS OF INDIA LTD., [2001] 106 Company Cases 700 (All.).

(5)G.K.W. LTD. Vs. SHRIRAM BEARINGS LTD., [2002] 109 Company Cases 636 (Delhi).

(6)SAND PLAST (INDIA) LTD. Vs. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Raj.).

5. In view of the decisions referred to in head (4) above, it is evident that

(a) Defect in Affidavit is only an irregularity which may be cured at any stage.

(b) Opportunity to file proper Affidavit can be given subsequently.

(c) Such Affidavit filed subsequently relates back to the date of presentation of the Winding up Petition.

6. As regards the difficulties / complications mentioned by Sri Anil Sharma, learned counsel for the Respondent-Company on the basis of the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), it is submitted that the said decisions stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

Further, the fresh Affidavit filed subsequently would relate back to the date of presentation of the Winding up Petition, and, therefore, the Winding up Petition would be deemed to have been validly presented on the date of its original presentation. As such, the difficulties / complications mentioned by Sri Anil Sharma would not arise.

In Rejoinder, Sri Anil Sharma, learned counsel for the Respondent-Company has reiterated the submissions made by him earlier.

Besides, Sri Sharma has made the following further submissions:

1- In the Supreme Court decision in Malhotra Steel Syndicate case (supra), there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

Therefore, the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

Reliance in this regard is placed on the following decisions :

(i)KRISHENA KUMAR Vs. UNION OF INDIA AND OTHERS, AIR 1990 Supreme Court 1782.

(ii)STATE OF U.P. & ANOTHER Vs. SYNTHETICS & CHEMICALS LTD. & ANOTHER, [1991] INSC 160; (1991) 4 SCC 139.

(iii)GOVERNMENT OF INDIA Vs. WORKMEN OF STATE TRADING CORPORATION & OTHERS, (1997) 11 SCC 641.

(iv)ISLAMIC ACADEMY OF EDUCATION & ANOTHER Vs. STATE OF KARNATAKA & OTHERS, 2003(6) Supreme Court Today 303 : A.I.R. 2003 SC 3724 : (2003) 6 SCC 697.

(v) STATE OF BIHAR Vs. KALIKA KUER @ KALIKA SINGH AND OTHERS, JT 2003 (4) SC 489 : AIR 2003 SC 2443.

2. A perusal of Form No.3 of the Companies (Court) Rules, 1959 shows that the Affidavit has to be in four parts :

A-Name and other details of the deponent.

B-Paragraph 1 of the Affidavit in regard to the designation and authorization of the deponent.

C-Paragraph 2 of the Affidavit containing verification of the paragraphs of the Company Petition.

D-Verification of the Affidavit.

In Malhotra Steel Syndicate case (supra), the defect was only in the verification clause of the Affidavit, i.e. Part ''D' above. The Supreme Court was of the opinion that the said defect was "slight defect or irregularity", and "the appellant should have been given an opportunity to rectify the same."

Therefore, it is only when there is "slight defect or irregularity" in the affidavit, that opportunity should be given to rectify the same.

It is submitted that in Malhotra Steel Syndicate case (supra), there was imperfect verification of the Affidavit (i.e. Part ''D' above), which was held to be "slight defect or irregularity".

On the other hand, in the present case, the defect is in the verification of the contents of the Company Petition as per the requirements of paragraph 2 of the Affidavit contained in Form No.3 (i.e. Part ''C' above).

There is no mention of the paragraphs of the Company Petition in paragraph 2 of the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition. There is no mention as to which paragraphs of the Company Petition are true on personal knowledge and which paragraphs are based on information, received from the company records etc. Such defect in the Affidavit is a material defect.

Such defect in the Affidavit cannot be said to be a "slight defect or irregularity".

`Therefore, the Supreme Court decision in Malhotra Steel Syndicate case (supra) is not applicable to the present case.

In view of the submissions made by Sri Anil Sharma, learned counsel for the Respondent-Company, in rejoinder, in regard to the Supreme Court decision in Malhotra Steel Syndicate case (supra), Sri Deepak Sabarwal, learned counsel for the Petitioner-Company was given opportunity to make further submissions in regard to the said point raised by Sri Anil Sharma, learned counsel for the Respondent-Company.

Sri Sabarwal has made the following further submissions :

1- The judgment of the Supreme Court is binding on all Courts including the High Courts of the country in view of the provisions of Article 141 of the Constitution of India. It is not open to any High Court to say that since certain aspects were not considered in the Supreme Court judgment, so the judgment of the Supreme Court is not binding. If the Supreme Court proceeds to decide the case on one aspect, then it is not open to any High Court to say that the judgment of the Supreme Court is not binding, as other aspects were not considered by the Supreme Court. Even if certain aspects were not examined by the Supreme Court in its judgment, it cannot be said that the judgment of the Supreme Court is not binding.

It is submitted that in view of the above legal position, even if the submission of the learned counsel for the Respondent-Company that the Supreme Court in Malhotra Steel Syndicate case (supra) did not notice certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959, were to be accepted, still the said Supreme Court decision will not loose its binding force on this Court. It is not open to this Court to say that the said decision of the Supreme Court is not binding in view of the said submission made by the learned counsel for the Respondent-Company.

Reliance in this regard has been placed on the following decisions :

(i)UNION OF INDIA Vs. FIRM RAM GOPAL HUKUM CHAND & OTHERS, A.I.R. 1960 All. 672.

(ii)RAM MANOHAR LOHIA & OTHERS Vs. STATE OF UTTAR PRADESH AND OTHERS, A.I.R.1968 All. 100.

(iii)BALLABHADAS MATHURADAS LAKHANI & OTHERS Vs. MUNICIPAL COMMITTEE, MALKAPUR, A.I.R. 1970 Supreme Court 1002.

(iv)T. GOVINDARAJA MUDALIAR ETC. Vs. THE STATE OF TAMIL NADU & OTHERS, [1973] INSC 1; (1973) 1 SCC 336.

(v)AMBIKA PRASAD MISHRA Vs. STATE OF UTTAR PRADESH & OTHERS, A.I.R.1980 Supreme Court 1762.

(vi)ANIL KUMAR NEOTIA & OTHERS Vs. UNION OF INDIA & OTHERS, A.I.R. 1988 Supreme Court 1353.

(vii)SUGANTHI SURESH KUMAR Vs. JAGDEESHAN, (2002) 2 SCC 420.

2. The decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not per in-curium, as submitted by the learned counsel for the Respondent-Company.

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the Petition was not in proper Form and that the Petition could not be entertained.

Having noticed the facts of the case, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was some slight defect or irregularity in the Affidavit, "the appellant should have been given an opportunity to rectify the same".

It is submitted that the Supreme Court considered the facts of the case as emerging from the impugned judgment of the Division Bench of the Punjab and Haryana High Court, and concluded that the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court has further laid down the law that even if there is defect in the Affidavit, filed in support of the Application for winding up, an opportunity should be given to rectify the same.

This is the ratio of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra). Even if certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 are not specifically mentioned in the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), it cannot be concluded that the said provisions were not considered by the Supreme Court while arriving at its decision as contained in the said judgment.

In any case, merely because the said provisions have not been specifically referred to in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), it will not take away the binding effect of the said decision nor can the decision be described as per in-curium.

It is submitted that mere non-mention of certain provisions in the decision of the Supreme Court will not take away its binding force, particularly when the said decision has been followed by certain High Courts.

3. The decisions relied upon by the learned counsel for the Respondent-Company in support of his plea of per in-curium, are distinguishable, and the same are not applicable to the facts and circumstances of the present case.

In reply to the above further submissions made by Sri Deepak Sabarwal, learned counsel for the Petitioner-Company, Sri Anil Sharma, learned counsel for the Respondent-Company reiterated his earlier submissions regarding the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per in-curium.

Sri Sharma has made the following further submissions :

(i)Reasoning of the learned Single Judge of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) and the reasoning of the Division Bench of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) have not been dealt with by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

(ii)Even if the Supreme Court judgment in Malhotra Steel Syndicate case (supra) has been followed by certain High Courts, the said fact will not debar the Respondent-Company from raising the plea that in view of the correct legal position, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

I have considered the submissions made by the learned counsel for the parties, and perused the record.

Two main questions which arise in the present case, are :

1-Whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective ?

2-If the said Affidavit filed in support of the Company Petition is held to be defective, should the petitioner be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company ?

Let us consider the afore-mentioned Question No.1, namely, as to whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective.

In order to decide this question, it is necessary to refer to Rule 21 of the Companies (Court) Rules, 1959, as well as Form No.3 contained in Appendix I to the said Rules.

The said Rule 21 is as follows :

"R.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 the case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof, such affidavit shall be filed 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."

The said Form No. 3 is reproduced below :

Form No.3

[See rule 21]

[Heading as in Form No.1]

Company Petition No.............. of 19..

Affidavit verifying petition.

I, A.B., son of .....................aged ........residing at .......................

......................... do, solemnly affirm and say as follows :-

1. I am a director/secretary/............... of ............. Ltd., the petitioner in the above matter *(and am duly authorised by the said petitioner to make this affidavit on its behalf.)

[Note.--This paragraph is to be included in cases where the petitioner is the company.]

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.

*Note.- To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

__________________

It is true that the Companies (Court) Rules, 1959 are statutory in nature, and the Forms prescribed in Appendix I to the said Rules should be adopted having regard to the nature of proceedings. However, in my opinion, what is required is substantial compliance with the Forms prescribed in the said Appendix I to the said Rules. Literal compliance with the said Forms, in my view, cannot be insisted upon.

Whether there has been substantial compliance with the Forms prescribed under the said Rules will depend upon the facts and circumstances of each case and the nature of proceedings in question.

In this connection, it is pertinent to refer to Rule 17 of the Companies (Court) Rules, 1959, which is as follows :

"R.17. Forms.--The forms set forth in Appendix I, where applicable, shall be used with such variations as circumstances may require."

(Emphasis supplied)

Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition must be verified by an Affidavit made by the petitioner or by one of the petitioners, where there are more than one, and in the case, the Petition is presented by a body corporate, by a Director, Secretary or other Principal Officer thereof. Rule 21 further provides that such Affidavit shall be filed along with the Company Petition and shall be in Form No.3.

Proviso to Rule 21 lays down 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.

Therefore, in view of the said Rule 21, it is necessary that the Company Petition must be verified by an Affidavit, which is to be in Form No.3. The Affidavit is to be made by such person as is mentioned in the said Rule 21. The Affidavit is required to be filed along with the Company Petition.

Thus, the Affidavit verifying the Company Petition is required to be in Form No.3. However, as held above, what is required is substantial compliance with the said Form No.3, and not literal compliance. Whether there has been substantial compliance with Form No.3, will depend on the facts and circumstances of each case and the nature of proceedings in question.

The said conclusion is supported by the decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra).

It was laid down by the Bombay High Court as follows (at page 681 of the said Company Cases) :

"................................................... ........................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition."

It was further held as under (at page 682 of the said Company Cases):

".................................................. This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition."

Thus, in Suvran Rajaram Bandekar case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen whether it can be fatal to the Petition.

The said decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR case (supra) was followed by the Gujarat High Court in DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj) (at pages 471- 472).

Keeping in view the above legal position, let us consider the present case.

As noted above, the present Company Petition is a Petition, inter-alia, praying for winding up the Respondent-Company. An Affidavit, sworn on 6th September, 2002 by Santosh John, has been filed in support of the Company Petition.

The question is as to whether the said Affidavit filed in support of the Company Petition substantially complied with the requirements of Form No.3 prescribed in Appendix I to the Companies (Court) Rules, 1959.

In order to consider this question, it is necessary to reproduce the relevant portion of the said Affidavit of Santosh John, which is as follows :

"IN THE MATTER OF :-

M/s Paharpur Cooling Towers Ltd. ... Petitioner

Versus

M/s Anuradha Masala, Udhyog Pvt. Ltd. ...... Respondent

AFFIDAVIT

I, Santosh John, S/o Sh. C.V. Yohannan, Age about 29 years, working as an Officer with the plaintiff Company, do hereby solemnly affirm and declare as under:

1.That I am working as an Officer in the aforesaid company and as such am well conversant with the facts of the present case and able to depose about the same.

2.That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433 (e) read with Section 434 (1) (a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief.

Sd.

DEPONENT

VERIFICATION

Verified at New Delhi on this 6 day of Sept, 2002 that the contents of para 1 and 2 of the above affidavit are true and correct to my knowledge. No part of it is incorrect and nothing material has been concealed therefrom."

As is evident from the submissions made by the learned counsel for the parties, it is not disputed by the Respondent-Company that Santosh John, who has sworn the said Affidavit in support of the Company Petition, is an authorized person.

The dispute is in regard to paragraph 2 of the said Affidavit wherein the contents of the Company Petition have been verified.

Paragraph 2 of the Affidavit given in Form No.3, contained in Appendix I to the Companies (Court) Rules, 1959, inter-alia, requires that it should be stated that "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."

Therefore, in view of paragraph 2 of the Affidavit given in Form No.3, the verification of the Company Petition must be done by specifying paragraphs of the Company Petition. There should be specification as to which paragraphs of the Company Petition are true to the knowledge of the deponent and as to which paragraphs of the Company Petition are based on information.

In the present case, paragraph 2 of the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, reads as follows :

"That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433(e) read with Section 434 (1)(a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief."

Therefore, in paragraph 2 of the said Affidavit, sworn by Santosh John, there is no mention of paragraph numbers of the Company Petition. There is no specification of paragraph numbers, which are true to the knowledge of the said Santosh John, nor is there any specification of paragraph numbers, which are based on information.

There is merely general verification of the contents of the Company Petition without any mention of even paragraph numbers of the Company Petition. Further, the contents of the Company Petition have been stated to be "true and correct to my knowledge and belief". There is no separate specification of the paragraph numbers which are true to the knowledge of the said Santosh John and the paragraph numbers, which are based on information.

In my opinion, such verification of the contents of the Company Petition cannot be said to be substantial compliance of the requirements of the Affidavit as prescribed in Form No.3 contained in Appendix I to the Companies (Court) Rules, 1959.

The said Affidavit of Santosh John filed in support of the Company Petition, therefore, does not substantially comply with the requirements of Form No.3 given in Appendix I to the Companies (Court) Rules, 1959. The said Affidavit of Santosh John is evidently a defective Affidavit.

The said conclusion is supported by various judicial decisions.

In PADMABATI DASI Vs. RASIK LAL DHAR, (1910) I.L.R. 37 Cal. 259, a Division Bench of the Calcutta High Court consisting of Jenkins, C.J. and Woodroffe J. held as under (at page 261 of the said I.L.R.) :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order XIX, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it would be safe to act on the deponent's belief."

(Emphasis supplied)

The above observations of the Calcutta High Court were endorsed by their Lordships of the Supreme Court in State of Bombay Vs. Purushottam Jog Naik[1952] INSC 35; , A.I.R. 1952 SC 317.

Their Lordships of the Supreme Court observed as follows (paragraph 16 of the said A.I.R.) :

"(16) We wish, however, to observe that the verification of the affidavits produced here is defective. The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally. The verification however states that everything was true to the best of his information and belief. We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit. Verification should invariably be modelled on the lines of Order 19, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not. And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed. We draw attention to the remarks of Jenkins C.J. and Woodroffe J. in PADMABATI DASI v. RASIK LAL DHAR, 37 Cal 259 and endorse the learned Judges' observations."

(Emphasis supplied)

In Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406, it was held as under (paragraphs 16 and 17 of the said A.I.R.) :

"(16) Order19, Rule 3 (1) of the Code of Civil Procedure requires :

"Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated"

In no affidavit has the petitioner said which part was based on information and which on belief. Nowhere he has divulged the source of his information or the grounds of his belief. Where the matter deposed to is not based on personal knowledge but on information, the sources of information ought to be clearly disclosed. The petitioner's several affidavits infringe the provisions of Order 19, Rule 3, when they should have been strictly observed. Such affidavits being violative of the requirements of the mandatory provisions of law, deserve to be ignored. The words that the contents of the affidavit "are true and correct to the best of my knowledge and belief" carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless."

"(17) In Padmabati Dasi v. Rasik Lal Dhar (1910) ILR 37 Cal. 259, Jenkins C.J. and Woodroffe J. observed :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, Rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to Judge whether it would be safe to act on the deponent's belief."

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is a catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Naein Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy, AIR 1956 Cal 496 and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101"

(Emphasis supplied)

In view of the above legal position, it is evident that the said Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition is a defective Affidavit.

As the said Affidavit filed in support of the Company Petition has been held to be defective, let us now consider Question No.2, namely, as to whether the petitioner should be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Before proceeding to consider this question, it is necessary to consider the submission made by the learned counsel for the Respondent-Company that the Petitioner-Company has taken contradictory stand. It is submitted that on the one hand, the Petitioner-Company maintains that the Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition substantially complied with all the requirements of Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company has sought permission / opportunity to file a fresh Affidavit in Form No.3, being the Affidavit, sworn by Santosh John on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Having considered the said submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

It is open to the Petitioner-Company to take alternative pleas.

The First Plea of the Petitioner-Company is that the Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition, was not defective, as there was substantial compliance with the requirements of Form No.3.

The Second Plea of the Petitioner-Company, in the alternative, is that if the said Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition, is held to be defective, then the Petitioner-Company be permitted to bring on record the said fresh Affidavit, sworn on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

In my opinion, it is open to the Petitioner-Company to take alternative pleas, as mentioned above. There is no question of any contradictory stand being taken by the Petitioner-Company, as submitted by the learned counsel for the Respondent-Company.

Coming now to the aforementioned Question No.2, it is necessary to examine the legal position as emerging from various decisions cited by the learned counsel for the parties.

In Gaya Textiles case, AIR 1968 Cal 388 (supra), the Winding up Petition was not verified by an Affidavit but by a declaration made before a Notary Public at Bombay on December 24, 1965.

The Calcutta High Court held that the verification was defective. It was further held that leave to re-verification of the Winding up Petition could not be granted as the same would lead to various complications, as mentioned in the decision.

The relevant portion of the said decision of the Calcutta High Court is reproduced below (paragraphs 6, 11 and 12 of the said AIR) :

"(6) Learned counsel for the petitioner however, contended that the defect in the verification of the petition was a mere irregularity which should be overlooked, and leave should be granted to the petitioner to re-verify the petition according to the rules. In support of this contention, learned counsel for the petitioner firstly relied upon a decision of the Allahabad High Court reported in AIR 1925 All 79 in which it was held that a plaint was not void merely because it did not contain the verification clause as required by the Code and that the omission to verify was a mere irregularity which could be cured even at a later stage and such a plaint therefore, should be deemed to be presented on the date of actual presentation and not on the date of its verification. It was also held that merely on the ground of such defect the plaint could not be treated as altogether invalid. This case, to my mind, has no application as I am not concerned with a defective verification of a plant, but with the verification of a winding up petition to which entirely different considerations apply. Besides, it cannot be overlooked that allegations in the plaint can be acted upon only upon proof of the same by evidence or upon admission by the defendant. The allegations in a petition, on the other hand, are to be treated by the Court as evidence without any further proof.

(11) Had this not been a petition for winding up a Company, I would have already accepted the contentions of the learned counsel for the petitioner. But it cannot be overlooked that the present petition is a petition for winding up of a Company and a winding up order relates back to the date of the presentation of the winding up petition. If on the date when the petition was presented there was no proper verification according to law, then there was no petition at all on which the Court could issue directions for advertisement. Secondly, if leave is granted to cure the verification today, then a proper petition for winding up of the Company would come into existence as from today, and in that event the question of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when the Court grants the Company leave to re-verify the petition would also create a good deal of confusion. Since a winding up order relates back to the date of presentation of the winding up petition, all dealings by the Company with its assets would be subject to the rules relating to fraudulent preference and transactions are liable to be set-aside on the ground that the Company had unlawfully dealt with its assets in order to deprive its creditors. But if leave is granted to the petitioner to cure the defect in the verification by allowing re-verification of the petition according to the rules today, it would be open to the Company to contend, if a winding up order is made, that the rules relating to fraudulent preference or unlawful dealing with the assets from the date of presentation of the winding up petition would not apply, as a petition properly verified according to law came into existence only on the date on which leave was granted to the petitioner to re-verify the petition.

(12). There is, however, another matter to be considered in connection with the defective verification of a winding up petition. In the event of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when a valid petition comes into existence after re-verification of the same, third parties may acquire rights in the Company's assets, which, it will be difficult to assail or set aside. For these reasons, verification of a winding up petition must strictly comply with the rules for verification of the same. The petition with which I am concerned in this application being a petition for winding up of a Company the principles discussed in the several decisions cited by the learned counsel for the petitioner are not attracted and do not assist the petitioner. Counsel for the petitioner admitted, and I think rightly, that the verification was defective and the Court could not make an order for winding up on this petition, and it was for that reason that he asked for leave to re-verify the petition. That being the position, in my opinion, re-verification of a winding up petition cannot be allowed, particularly because in this case the verification appears to have been done before a notary public, who under the rules is not an officer before whom a petition could be verified under the rules of this Court as also under the Companies (Court) Rules, 1959. For the reasons mentioned above, the Court cannot proceed to make an order on the present petition nor can the Court give leave to the petitioner to re-verify the petition in conformity with the rules. In the circumstances, this application is dismissed with costs. Certified for counsel."

(Emphasis supplied)

In Mool Chand Wahi case, [1986] 60 Company Cases 198 (P & H) (supra), the Winding up Petition was accompanied by an Affidavit. In the verification clause of the Affidavit, paragraphs 1 to 14 of the Affidavit were shown to have been "true and correct to the best of the deponent's knowledge and belief". There was no delineation as to which paragraphs of the Affidavit were correct to the best of his knowledge and which paragraphs of the Affidavit were correct to the best of his belief.

The learned Single Judge of the Punjab and Haryana High Court referred to the provisions of Rules 11 (a), 18 and 21 of the Companies (Court) Rules, 1959 and the provisions of Order 19, Rule 3 of the Code of Civil Procedure as also the decision of the Punjab & Haryana High Court in Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406 (supra).

It was concluded that the verification of the Affidavit, filed in support of the Company Petition, was not proper, and as such, the Winding up Petition was liable to be dismissed on the ground that it was not accompanied by a proper Affidavit.

The learned Single Judge of the Punjab and Haryana High Court pointed out that in case a properly sworn Affidavit was allowed to be filed subsequently, the same would lead to a great deal of confusion regarding the rights of the third parties. Reliance was placed on the decision of the Calcutta High Court in Gaya Textiles case (supra).

The relevant portions of the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) are reproduced below (at pages 201, 202 and 203 of the said Company Cases) :

"I have duly considered the argument of the learned counsel. Rule 11 (a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned at Serial No. 15 in the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Paragraph 2 of the Form reads as follows :

"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."

Rule 18 says that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code or by the rules and practice of the court. Order 19, rule 3 of the Code of Civil Procedure says that affidavits shall be confined to such facts as the deponent is able to prove from his own knowledge except on interlocutory applications, on which statements of his belief may be admitted. From the aforesaid rules, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form. It is well settled that if an affidavit is not in due form, no value can be attached to it. In the above view, I am fortified by the observations in Bhupinder Singh's case, AIR 1968 P & H 406, wherein Tek Chand J., after noticing Order 19, rule 3(1) of the Code, observed as follows (p.410) :

"The words that the contents of the affidavit '' are true and correct to the best of my knowledge and belief' carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless".

In Padmabati Dasi v. Rasik Lal Dhar [1910] ILR 37 Cal 259, Jenkins C.J. and Woodroffee J. observed :

''We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.'

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Nalin Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy Singha, AIR 1956 Cal 496, and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101."

The learned Judge, in view of the fact that the verification of the affidavit was not proper, ignored the affidavit filed by the petitioner in that case. In a petition for winding-up, it is mandatory to file an affidavit along with the petition. The purpose of the affidavit is that the allegations in the affidavit read with the petition are treated as substantive evidence. In case the petition is not accompanied by an affidavit, in view of the rules mentioned above, it is no petition in the eye of law and consequently it is liable to be dismissed on this ground alone. The main reason is that the petition for winding-up, if accepted, relates back to the date of its presentation. In case a properly sworn affidavit is allowed to be filed subsequently, the question will arise as to whether the winding-up petition would relate back to the date of presentation of the petition or the affidavit and in many cases a great deal of confusion regarding the rights of the third parties would crop up. In that regard, the following observations in Gaya Textiles P. Ltd., In re, AIR 1968 Cal 388, be read with advantage (pp.390, 391):

..............................................................."

(Emphasis supplied)

Having laid down the above proposition, the learned Single Judge of the Punjab & Haryana High Court dismissed the Winding up Petition on the ground that it was not accompanied by a proper Affidavit.

Against the said decision of the learned Single Judge of the Punjab & Haryana High Court, Company Appeal under Section 483 of the Companies Act, 1956 was filed before the said High Court.

A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal by its decision reported in Mool Chand Wahi Vs. National Paints (Pvt.) Ltd. and another, [1986] 60 Company Cases 402 (P & H) (supra) .

The Division Bench of the Punjab & Haryana High Court rejected the submission made on behalf of the Petitioner-Appellant that he should have been allowed to file a fresh Affidavit in support of the Company Petition, and upheld the said decision of the learned Single Judge of the Punjab & Haryana High Court. The Division Bench of the Punjab & Haryana High Court held as under (at Pages 403- 404 of the said Company Cases) :

"........................................................ The Company Petition was accompanied by an affidavit dated February 20, 1980, which was not in proper form. In its verification clause, paras 1 to 14 of the affidavit were mentioned to have been true and correct to the best of the deponent's knowledge and belief. The appellant in accordance with law was required to specify which paragraphs of the affidavit were correct to the best of his knowledge and which were correct to his belief. Rule 11(a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned in sub-rule (15) of the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in form No.3, which, in turn, prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Rule 18 lays down that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code of Civil Procedure (hereinafter called "the Code") or by the rules and practice of the court. Order XIX, rule 3 of the Code lays down the matters to which the affidavit shall be confined. Mr. Ratta also admits that where a petition for winding up is not supported by an affidavit, the same is liable to be dismissed.

He, however, submits that the verification of an affidavit is a matter of form and he should have been allowed to file a fresh affidavit and the petition should not have been dismissed for want of proper verification of the affidavit. He placed reliance on Manohar Narayan Joshi v. Ramu Mhatang Patel, AIR 1973 Bom.105.

We do not find any force in this contention. Going through the judgment of the learned Single Judge, we find that the law on the point has been elaborately discussed and as a result an imperative conclusion has been reached that the petition has had to be dismissed as it was not accompanied by a proper affidavit. An affidavit which is not in due form is of no value. An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. The learned Single Judge rightly rejected the appellant's prayer to file a fresh affidavit properly sworn in for the reason that if the amendment of a petition for winding up is allowed, it relates back to the date of its presentation. It would lead to a great deal of confusion if the appellant is allowed to swear in and supply a fresh affidavit at a late stage because rights of third parties would crop up.

Manohar Narayan Joshi's case, AIR 1973 Bom 105, was rightly distinguished by the learned Single Judge as it adjudicated on the question whether or not a petitioner in an election petition under the Representation of the People Act should be allowed to amend the affidavit accompanying it. An affidavit in support of an election petition is not intended to be treated as evidence of the facts stated therein because it is ultimately to be decided on the evidence recorded by the High Court."

(Emphasis supplied)

In Malhotra Steel Syndicate case, [1989] 65 Company Cases 546 (P. & H.) (supra), a learned Single Judge of the Punjab and Haryana High Court was dealing with the submission made by the learned counsel for the Respondent-Company that the Affidavit filed in support of the Winding up Petition was not in conformity with Rule 21 of the Companies (Court) Rules, 1959 and Form No.3 contained in Appendix I to the said Rules.

The learned counsel for the Respondent-Company placed reliance on the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra).

The learned Single Judge in Malhotra Steel Syndicate case (supra), expressed doubts about the correctness of the observations made by the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), but declined to refer the matter to a Larger Bench as the learned Single Judge was not satisfied on the merits of the Winding up Petition.

On merits of the case in Malhotra Steel Syndicate case (supra), the learned Single Judge was of the view that in view of the material placed before the Court, it was prima-facie established that the debt was bona fide disputed by the Respondent-Company. Therefore, the learned Single Judge dismissed the Winding up Petition and relegated the Petitioner-Company to a civil Suit.

The relevant portions of the decision of the learned Single Judge in Malhotra Steel Syndicate case (supra) are reproduced below (at pages 550 - 552 of the said Company Cases) :

"Mr. Bhagirath Dass, who appeared for the respondent, submitted that the affidavit filed in support of the petition is not in conformity with rule 21 of the Companies (Court) Rules, 1959. Rule 21 enjoins that every petition shall be verified by an affidavit and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 provides that the statement made in various paragraphs of the petition has either to be verified as true to knowledge or on information received or on information which is believed to be true. Since the affidavit filed in support of the petition is not in conformity with Rule 21 of the Companies (Court) Rules, the petition is liable to be rejected on this score alone. Learned counsel relied upon a Division Bench decision of this court in Mool Cihand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 198. Before the Bench, learned counsel for the Petitioner Company conceded that where a petition for winding up is not accompanied by an affidavit, the same is liable to be dismissed. On the basis of that concession, the Bench held that an affidavit, which is not in due form, is of no value and the company petition, which is to be accompanied by the affidavit, will be no petition in the eyes of law.

Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not "evidence" within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my lord the Chief Justice for referring the case to a larger Bench for reconsideration of the judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (Private) Ltd. [1986] 60 Comp Cas. 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case.

In Amalgamated Commercial Traders (P.) Ltd. v. Krishnaswami (A.C.K.) [1965] 35 Comp Cas 456, 463, 464 (SC), the Supreme Court quoted with approval the following passage from Buckley on the Companies Acts, 13th edition, page 451) : "It is well settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under certain circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time, petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the court may decide it on the petition and make the order................If the debt was bona fide disputed, as we hold it was, there cannot be ''neglect to pay' within section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the ground of winding-up, namely, that the company is unable to pay its debts is not substantiated".

This passage has been quoted with approval in the subsequent decisions of the apex court. The law has been succinctly stated in this paragraph and if the company court comes to the conclusion that the debt is bona fide disputed by the company, against whom the winding up petition has been filed, the petitioner has to be relegated to a civil suit and a winding up petition will not be the appropriate remedy.

The respondent-company has placed material before this court and it prima facie establishes that the debt is bona fide disputed.

The duplicate copy of the bill, which is placed on record by the respondent company evidencing receipt of the goods in dispute, does not bear the signatures of Mr. K.S. Rupal who purports to have signed the original bill dated August 7, 1984. The original bill placed on record by the petitioner bears the signature of Mr. K.S. Rupal. The photocopy of the cheque issued to cover price of the goods, which was dishonoured, is signed only by Shri S.S. Sandu, executive director of the company. The respondent company has denied that Shri S.S. Sandhu was authorised to issue the cheque for and on behalf of the company.

The petitioner filed a rejoinder to the written statement and in Para No.4 thereof took the plea that hundreds of cheques issued prior to and subsequent to the date of the issuance of the cheque to the petitioner on August 7, 1984, were signed by Sri S.S. Sandhu and were honoured by the bankers. The verification of the rejoinder reveals that the facts mentioned in Para No.4 of the replication are true and correct to the best of knowledge of the deponent derived from the record and information received and believed to be correct. It is not stated as to from which source the petitioner-company acquired the knowledge that Shri S.S. Sandhu was competent to issue the cheque for and on behalf of the company. It was imperative for the petitioner to specifically disclose the source of information which was believed by him to be correct. Even if the plea was correct, the petitioner could obtain a certificate from the banker who had honoured the cheques issued for and on behalf of the respondent company by Shri S.S. Sandhu. No such document has been placed on record. The receipt of goods is denied by the respondent and no material has been placed before this court to vouchsafe the assertions of the petitioner that the goods had been supplied.

The petitioner has to prove the allegations made by it in the petition by leading positive evidence and this could be done only in a civil suit. The respondent company has prima facie established that the debt is bona fide disputed by it".

(Emphasis supplied)

It further appears that against the said decision of the learned Single Judge in Malhotra Steel Syndicate case (supra), a Company Appeal was filed. A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal on the short ground that the Affidavit filed in support of the Winding up Petition was not in proper form and that the Winding up Petition could not be entertained.

Against the said decision of the Punjab and Haryana High Court, Special Leave Petition, being S.L.P. (Civil) No. 19170 of 1991, was filed before the Supreme Court, and the said Special Leave Petition gave rise to Civil Appeal No. 2587 of 1992.

The said Civil Appeal was decided by the Supreme Court by its decision reported in Malhotra Steel Syndicate V. Punjab Chemi Plants Ltd., 1993 Supp. (3) SCC 565 (supra).

The relevant portion of the said decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is quoted below:

"1. Leave granted.

2.We have heard both the counsel. We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding-up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

3. We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991.

4. In the result, the Company appeal will stand revived before the Division Bench for disposal on merits.

5. The appeal is allowed accordingly. There will be no order as to costs."

(Emphasis supplied)

It may be mentioned that pursuant to the remand by the Supreme Court by its aforementioned decision in Malhotra Steel Syndicate case (supra), a Division Bench of the Punjab & Haryana High Court considered the Company Appeal on merits, and dismissed the same by its decision reported in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., [1996] 85 Company Cases 586 (Punjab & Haryana).

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate Bank case (supra) shows that the following principles, amongst others, may be deduced from the said decision :

(1)While considering the validity of the Form and Verification of the Affidavit filed in support of the Company Petition, a proper and liberal construction should be adopted. In other words, what is required is that the Affidavit has substantially complied with the Form and Verification as provided in the Companies (Court) Rules, 1959.

(2)Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity.

(3)In case there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same.

Hence, in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra), if an Affidavit filed in support of the Winding up Petition suffers from any defect or irregularity, opportunity should be given to rectify the same. Therefore, in such a situation, the Petitioner-Company may be permitted to file a fresh Affidavit in support of the Winding up Petition.

The above legal principles deduced from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), are the law declared by the Supreme Court, and are binding on all the Courts in the country in view of Article 141 of the Constitution of India.

Therefore, with deep respect for the learned Judges, I am of the opinion that the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) in-so-far as, the said decisions have laid down that in case verification of the Winding up Petition by Affidavit filed in support of the Winding up Petition, is defective, the Winding up Petition is liable to be dismissed, and no opportunity to re-verify the Winding up Petition by filing fresh Affidavit can be given, are no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

For the same reason, the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra), wherein the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), was relied upon, is also no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

As regards the complications pointed out by the Calcutta High Court in its decision in Gaya Textiles case (supra) and by the learned Single Judge of the Punjab and Haryana High Court in his decision in Mool Chand Wahi case (supra), I am of the opinion that in case, the Affidavit, filed in support of the Winding up Petition, is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

In view of this, various complications pointed out in the said decision of the Calcutta High Court and the said decision of the learned Single Judge of the Punjab and Haryana High Court, would not arise.

As regards the submission made by the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) should be confined only to "slight defect or irregularity", I find myself unable to accept the said submission. The expression "slight defect or irregularity" occuring in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is in the context of the facts of the said case. However, the ratio of the said decision is that if the Affidavit filed in support of the Winding up Petition is defective, the same is merely an irregularity, and can be cured by giving opportunity to the Petitioner to rectify the same.

Keeping in view the above legal position, let us consider the facts of the present case. As noted above, an Affidavit, sworn by Santosh John on 6th September, 2002, was filed in support of the Company Petition. The said Affidavit, as held in Question No.1 above, is defective.

Another affidavit, sworn by Santosh John on 13th April, 2004, was filed in Form No.3 as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit. It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit.

As the Affidavit, sworn on 6th September, 2002, originally filed in support of the Company Petition, has been held to be defective, I am of the opinion that the prayer made in the said Company Application (Paper No. A-10) on behalf of the Petitioner-Company be granted, and the Petitioner-Company be permitted to bring on record the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit, and the said Affidavit, sworn on 13th April, 2004, be read as being the Affidavit in support of the Company Petition.

It is relevant to note that the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Private Limited case (supra), by the Andhra Pradesh High Court in D & H Secheron Electrodes case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In DLF Industries Ltd. case (supra), the Winding up Petition was supported by an Affidavit affirmed in Delhi before a Notary on July 7, 1997.

An objection was raised by the Respondent-Company that the Affidavit filed in support of the Winding up Petition was defective. It was submitted that the person affirming the Affidavit did not state that he was a Principal Officer of the Company. The Affidavit did not refer to ''this' particular Petition as being affirmed and also that it was not in Form No.3 as required by Rules 18 and 21 of the Companies (Court) Rules, 1959.

In view of the said objection raised by the Respondent-Company, the petitioner filed another Affidavit affirming this very Petition, which was affirmed on October 23, 1997 before a Notary in Faridabad. This Affidavit stated that the deponent was the Managing Director of the Petitioner-Company. He was shown the Petition and he affirmed that paragraphs 1 to 10 were true to his knowledge and the statements made in paragraphs 11 and 12 were based on his information which he believed to be true.

The Gujarat High Court held that the First Affidavit itself could not be said to be in any way materially defective requiring the rejection of the Winding up Petition. That apart, assuming that there was any defect in the First Affidavit, the same was cured in the Second Affidavit. Such a course of action was permissible.

The Gujarat High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), and concluded that the Winding up Petition could not be rejected on the ground of the Affidavit filed in support of the Winding up Petition being defective.

Relevant portion of the said decision of the Gujarat High Court in DLF Industries case (supra) is quoted below (at pages 471, 472 and 473 of the said Company Cases) :

"Mr. Nanavati, learned counsel for the respondent, submits that this affidavit is affirmed in Delhi before a notary on July 7, 1997. The petition is not mentioned to be the one annexed at Annexure A thereto. Paragraph No. 2 of the affidavit states that the petitioner has filed the petition "this day" whereas the petition has come to be filed on July 8, 1997. Mr. Nanavati, therefore, submits that it is difficult to say that this affidavit is affirmed with respect to this very petition. Mr. Nanavati has principally relied upon the judgment of the Punjab High Court, first of all of a single Judge in the case of Mool Chand Wahi v. National Paints P. Ltd.[1986] 60 Comp Cas 198 (P & H) which is confirmed by the Division Bench of that court in Mool Chand Wahi. v. National Paints P. Ltd. [1986] 60 Comp. Cas 402. In that judgment the single Judge as well as the Division Bench have held that from Rules 11, 18 and 21 of the Companies (Court) Rules, 1959, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form and if it is not so, no value can be attached to it. The judgment holds that the affidavit is to be filed so that the contents of the petition are treated as evidence and in the absence of the affidavit being in the exact form, that cannot be permitted. The judgment also holds that a subsequent correction of the affidavit is not permissible.

As against that, Mr. Seth, learned counsel for the petitioner, relied upon the judgment of a single Judge of the Bombay High Court (G.D. Kamat, J. as he then was) in Bandekar (S.R.) v. Rajaram Bandekar [1997] 88 Comp Cas 673 (Bom) where the learned Judge held that the importance of verification is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered." (page 682).

In view of the objection raised by the respondent, the petitioner filed another affidavit affirming this very petition, which is affirmed by one Shri Ranjit Singh Cheema on October 23, 1997, before a notary in Faridabad. This affidavit states that the deponent is the managing director of the petitioner-company. He is shown the petition and he has affirmed that paragraphs Nos. 1 to 10 are true to his knowledge and the statements made in paragraphs 11 and 12 are based on his information which he believed to be true.

Now, if we look to the first affidavit, referred to above, the deponent has disclosed his high position in the company. He has also made a statement on oath with respect to the contents of the petition and its annexures as required by law. In my view, the first affidavit itself cannot be said to be in any way materially defective requiring the rejection of the petition.

The observations of Kamat J. quoted above aptly apply in the present case. That apart, assuming that there is any defect in the first affidavit, the same is cured in the second affidavit. Such a course of action is permitted by a Division Bench of the Bombay High Court in the case of Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 (Bom), which is binding precedent for this court. Now, on this aspect, the Hon'ble Supreme Court has indicated as to what approach should be adopted in such a controversy in the case of Malhotra Steel Syndicate v. Punjab Chemi-plants Ltd. [1993] 3 SCC (Supp) 565. It is a short order but it indicates what approach the court should have. It reads as follows :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit the appellant should have been given an opportunity to rectify the same." (Underlining supplied).

In this view of the matter, as far as the first submission of Mr. Nanavati is concerned, it is difficult to accept the same and the petition cannot be rejected solely on this ground. I have examined this submission in spite of the fact that this plea has not specifically been taken in the reply. In fact, it is the petitioner who has contended that Shri K.M. Patel who has affirmed the reply for the respondent is not the principal officer and therefore his reply may not be looked into. As far as this aspect is concerned, another affidavit has subsequently been filed by the respondent placing on record that Shri K.M. Patel is a senior officer of the respondent-company authorised to swear the affidavit in reply. Hence I am not prepared to accept this objection to the affidavit of Shri Patel also."

(Emphasis supplied)

In Welding Rods Private Ltd. case (supra), the original verification read as under :

"Affidavit I, S.L. Jain, authorised signatory of the petitioner-company, do hereby solemnly affirm and State on oath that what is stated in the foregoing petition is true to my knowledge, information and belief and I believe the same to be true.

Solemnly affirmed at Mumbai on this 10th day of July, 2000.

For Indo Borax and Chemicals Ltd.

(Sd. ) Deponent."

A preliminary objection was raised that the affidavit filed in support of the Winding up Petition was not an Affidavit in the eyes of law or in accordance with Rule 21 of the Companies (Court) Rules, 1959.

The learned Single Judge of the Gujarat High Court came to the conclusion that the irregularity in the verification of the Affidavit and want of signature below the Petition and above the verification were irregularities which were required to be permitted to be cured. The learned Single Judge accordingly afforded an opportunity to the Petitioner-Company to sign the Petition and remove all technical objections within a period of 15 days from the date of the order. The Petitioner-Company availed of the said opportunity by filing the Affidavit as per Form No. 3.

Against the decision of the learned Single Judge rejecting the above preliminary objection as well as other preliminary objections raised on behalf of the respondent, a Company Appeal was filed.

A Division Bench of the Gujarat High Court dismissed the said Company Appeal.

As regards the preliminary objection regarding the defect in the verification of the Affidavit, the Division Bench of the Gujarat High Court held that there was no infirmity in the order of the learned Single Judge permitting the Petitioner-Company to rectify the defect in the verification of the Affidavit filed with the Company Petition.

It was further held by the Division Bench that the effect of permitting such rectification was, inter-alia, to relate it back to the original date of filing of the Winding up Petition.

It was further held by the Division Bench that in view of the pronouncement of the Supreme Court in Malhotra Steel Syndicate case (supra), the decisions of the learned Single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) must be treated as having been impliedly overruled.

The Division Bench, however, emphasised that the Court would not permit the rectification of the defect in a Winding up Petition just as a matter of course, but would take into account all the relevant circumstances including the conduct of the parties.

Relevant portion of the said decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra) is quoted below (at pages 767, 768 and 769 of the said Company cases) :

"We find considerable substance in the contention of Mr. Vakil for the petitioning-creditor. The preponderance of judicial authority is that the defect in the form of verification or affidavit is only a technical irregularity and that an opportunity should be given to the concerned party to cure such defect. The inherent powers of the court saved by Rule 9 of the Companies (Court) Rules, can certainly be invoked in such cases. Rule 9 reads as under :

"9. Inherent powers of court.-Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court."

In Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1989] 65 Comp Cas 546 (P & H), Justice Majithia referred to the Division Bench judgment of the Punjab and Haryana High Court in Mool Chand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 402 and made the following observations (page 550 of 65 Comp Cas):

"Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not ''evidence' within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my Lord the Chief Justice for referring the case to a larger Bench for reconsideration of the Judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (P) Ltd. [1986] 60 Comp Cas 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case."

The aforesaid decision was ultimately carried before the Supreme Court and in the decision reported in Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] 3 (Suppl.) SCC 565, the Supreme Court passed the following order :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991." (emphasis supplied)

With this pronouncement, the decisions of the learned single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi's case [1986] 60 Comp Cas 402 must be treated as having been impliedly overruled.

Following the aforesaid Supreme Court decision, this court has also held in DLF Industries Ltd.'s case [1999] 2 Comp LJ 310 (Guj); [2001] 103 Comp Cas 467 that the importance of verification in an affidavit in Form No.3 under Rule 21 of the Companies (Court) Rules, 1959, is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered."

In Mrs. Roma Deb v. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Cas 350, speaking for the Delhi High Court Hon'ble Mr. Justice D.P. Wadhwa (as His Lordship then was) also expressed the same view that the court can, in its inherent powers, allow the petitioners to present an affidavit in support of the petition in terms of the prescribed rules and forms, if the affidavit originally filed with the petition does not conform to them. Of course, this the court would do in the ends of justice ; and if the circumstances of the case require.

...............................................

.......................................................

As regards the contention of Mr. Ashwin Lalbhai that even if a fresh affidavit with proper verification in accordance with Rule 3 was permissible, the winding up petition can be said to have been instituted on the date on which such fresh affidavit is filed, we are unable to accept this contention for the reasons which were also commended by the Delhi High Court in the aforesaid case of Mrs. Roma Deb vs. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Case 350 wherein Hon'ble Mr. Justice D.P. Wadhwa observed that the 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 of filing, this can be permitted in the ends of justice; and the court will see if any prejudice is being caused to the other party which may be compensated by costs or otherwise. A balance has to be struck between two warning 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 cannot be rectified. The court is not helpless in a case where the affidavit verifying the petition is not in the prescribed form. 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 could be cured at any stage of the suit. The court will not, however, permit the rectification of the defect in a winding up petition just as a matter of course ; but would take into account all the relevant circumstances including the conduct of the parties.

(Emphasis supplied)

In the instant case, we do not find any infirmity in the order of the learned Company Judge permitting the petitioning-creditor to rectify the defect in the verification on affidavit filed with the company petition. The effect of permitting such rectification is, inter-alia, to relate it back to the original date of filing of the winding up petition and this has been permitted in the interests of justice. No prejudice is caused to the appellant-company by such permission granted by the learned Company Judge."

(Emphasis supplied)

I am in respectful agreement with the above decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra).

In D & H SECHERON ELECTRODES (P.) LTD. VS. VOLTARE ELECTRODES (P.) LTD., [1997] 89 Company Cases 592 (Andhra Pradesh) (supra), the Affidavit filed in support of the Winding up Petition was verified by a C.K. Padmanabhan, who was neither a Director nor a Principal Officer of the Petitioner-Company, but was Administrative Officer of the Petitioner-Company. A preliminary objection was raised that the Company Petition was not maintainable under the proviso to Rule 21 of the Companies (Court) Rules, 1959, as it was not filed by a validly constituted attorney. In view of the preliminary objection, the Petitioner filed an application seeking leave of the Court under the proviso to Rule 21 to permit C.K. Padmanabhan to make and file the Affidavit in the Winding up Petition. Along with the Affidavit, he filed true copy of the resolution passed by the Board of Directors authorizing C.K. Padmanabhan to sign and file the Winding up Petition against the Respondent-Company and to sign necessary papers as may be required for this purpose.

The Andhra Pradesh High Court held that no doubt, the Petition, as filed, was defective in the absence of obtaining leave of the Court to accept the Affidavit of Padmanabhan, but the same was rectified by filing the Affidavit accompanied by a true copy of the resolution of the Board. The Andhra Pradesh High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

The relevant portion of the judgment of the Andhra High Court is reproduced below (at pages 595, 596 and 597 of the said Company Cases) :

" .................... During the hearing of the arguments, the respondent-company raised a preliminary objection that the company petition is not maintainable under the proviso to rule 21 of the Companies (Court) Rules, 1959 (for short "the Rules"), as it is not filed by a validly constituted attorney and that Sri C.K. Padmanabhan, who verified the petition, is not authorized to file the company petition. As it is a pure question of law, I permitted the respondent-company to raise this plea even at that late stage. Thereupon the petitioner filed Company Application No. 153 of 1995, seeking leave of the court to permit Sri C.K. Padmanabhan, to sign the affidavit and to file this winding up petition. Hence, the third question for consideration is, whether the company petition filed by Sri C.K. Padmanabhan, on behalf of the respondent-company, is maintainable under rule 21 of the Rules.

Taking the third point first, under rule 21, where any petition is presented by a body corporate, the affidavit must be verified by a director, secretary or other principal officer thereof, provided that the judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the company to make and file the affidavit, Admittedly, in this case, Sri C.K. Padmanabhan, who filed the company petition is neither a director nor a principal officer of the petitioner-company. He is the administrative officer and is described as a duly constituted attorney. In fact, the office ought not to have numbered it, but posted the same for orders of the court. Thus, it is clear that the company petition as filed in 1988 is not in accordance with rule 21. Realising this defect the petitioner filed Company Application No. 153 of 1995 seeking leave of the court under the proviso to rule 21 to permit Mr. C.K. Padmanabhan to make and file the affidavit in the company petition. Along with the affidavit, he filed a true copy of the resolution passed by the board of directors at its meeting at Indore, on September 6, 1988, authorizing Sri C.K. Padmanabhan to sign and file the winding up petition against the respondent-company and to sign necessary papers as may be required for this purpose. It was also stated in the resolution that Sri C.K. Padmanabhan might be given power of attorney by the company. It is not clear whether any power of attorney has been issued. No copy has been filed by the petitioner. Mr. Y. Ratnakar, learned counsel for the petitioner, contends that in view of this resolution of the board authorizing Sri C.K. Padmanabhan, both to sign and file the company petition, leave may be granted by the court regularizing the affidavit filed by Sri C.K. Padmanabhan. Mr. S. Ravi, learned counsel for the respondent, opposed this, contending that the petitioner has not filed the original resolution of the board or the power of attorney, if any, issued in favour of Sri C.K. Padmanabhan, and relied on the decisions in Mohan Lal Mithal v. Universal Wires Ltd., [1983] 53 Comp Cas 36 (Cal) and Nibro Ltd. v. National Insurance Co. Ltd., AIR 1991 Delhi 25 ; [1991] 70 Comp Cas 388.

Mohan Lal Mithal v. Universal Wires Ltd. [1983] 53 Comp Cas 36-(Cal) was a case of filing of an application under sections 397 and 398 of the Act on behalf of a company holding shares in another company and the letter of consent annexed to the petition was not backed by a resolution of the board of directors but was signed by the secretary of the company who claimed that he was directed to do so by a director of the company. It may be seen here that under rule 88 of the Rules in the case of petitions filed under Section 397, the letter of consent signed by the members authorizing the petitioner to present the petition on their behalf, must be annexed to the petition. Interpreting this rule, the single judge of the Calcutta High Court held that as the letter of consent was not backed by the resolution of the board of directors, but was only signed by the secretary of the company, the petition was not maintainable. This decision does not help the respondent-company, as we are concerned here with rule 21.

The next decision is Nibro Ltd. v. National Insurance Co. Ltd.[1991] 70 Comp Cas 388 (Delhi) in which a suit was filed by a director without the necessary resolution in that behalf by the board. The contention of the company was that under Order 29, rule 1 of the Civil Procedure Code, in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any other director or other principal officer of the corporation who is able to depose to the facts of the case. The Delhi High Court rejected the contention of the company and held that the suit is not maintainable under section 291 of the Act read with sections 14, 26 and 28 and Schedule I, Table A. The court held that Order 29, rule 1 of the Civil Procedure Code does not authorise the person mentioned therein to institute suits on behalf of the corporation but only authorises them to sign and verify the pleadings on behalf of the corporation. This decision is also not applicable to the facts of the case.

In Mehta Steel Syndicate [1993] 3 SCC 565 (sic), an objection was taken that the affidavit filed in support of the winding up petition is defective. The High Court had dismissed the petition on that ground. The Supreme Court held that there was no defect and even assuming that there was defect or irregularity, the party must be given opportunity to rectify the same. In the instant case, no doubt, the petition as filed was defective in the absence of obtaining leave of this court to accept the affidavit of Padmanabhan. But the same has been rectified now by filing the affidavit accompanied by a true copy of the resolution of the board. The proviso to rule 21 does not require any power of attorney to be filed. There is no reason to doubt the true copy of the resolution of the board and to throw out the company petition on the technical ground, that too, after seven years after filing the same. I accordingly, overrule the objection raised by the respondent and allow Company Application No. 153 of 1995."

(Emphasis supplied)

In G.K.W. Limited Vs. Shriram Bearings Ltd., [2002] 109 Company Cases 636 (Delhi) (supra), an objection was raised that the Affidavit filed in support of the Winding up Petition was not in accordance with Rule 21 of the Companies (Court) Rule, 1959, and Form No. 3. The Delhi High Court held that the Affidavit was not in accordance with the provisions of Rule 21 of the Companies (Court) Rules, 1959, and Form No. 3. It was further held that a defective verification was only an irregularity in the procedure and would not be a ground for rejecting the Winding up Petition. The defect could be cured at any stage. Opportunity should be given to the petitioner to file a proper Affidavit in accordance with the Rule and the Form prescribed therein.

The Delhi High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) as also on the decision of the Delhi High Court in Mrs. Roma Deb case (supra). The Delhi High Court observed as under (at pages 639 and 640 of the said Company Cases ):

"A combined reading of Form No.3 and rule 21 makes it clear that the person verifying the affidavit has to disclose whether he is director or secretary of the company or an authorised person empowered to sign the affidavit. He has also to indicate which of the paragraphs are true on the basis of information received and believed by him. A perusal of the affidavit filed with this petition by Shri Avinash Chawla shows that he was only an assistant manager of the petitioner-company. He nowhere disclosed how he was competent to verify this affidavit. The mere assertion that he was fully authorised by the petitioner-company to sign and verify the affidavit is not enough to conclude that the affidavit has been signed and verified by a duly authorised person nor can it be said to be in accordance with Form No.3. Mr. Chawla has deposed in the affidavit that he was well acquainted with the facts and circumstances of the case. A reading of para 2 of the affidavit shows that he has not disclosed which of the paragraphs are based on information, derived by him and which were of his personal knowledge. On the contrary a reading of para. No. 2 of the affidavit shows Mr. Chawla verified the facts of the petition on his personal knowledge :

"Para 2. That I have read the accompanying petition and that the facts stated therein are correct and true to my knowledge."

A reading of the petition as a whole shows that all the paragraphs could not be based on his personal knowledge. Some paras. deal with legal submissions, those could not be based on personal knowledge. Similarly, the capital and status of the respondent-company has to be based on knowledge and information derived. For some of the paras of the petition he must have derived the information from official record, therefore, could not have been verified on the basis of his knowledge. Such an affidavit, prima facie, cannot be called in accordance with the provisions of rule 21 and Form No.3.

The question to answer is whether due to such a defective affidavit, the petition is liable to be dismissed? The answer is in the negative. A similar point came up for interpretation before this court in the case of Roma Deb v. R.C. Soad and Co. (P) Ltd. [1987] 2 Comp LJ 174 : [1990] 67 Comp Cas 350. This court, after analyzing rule 21 and other provisions of the Act and Form No.3, came to the conclusion that if the affidavit originally filed with the petition was not as per rule 21 and Form No.3, still the court could in its inherent powers allow the petitioner to present a fresh affidavit in support of his petition in terms of the prescribed rule and form. In that case also the affidavit in support of the petition was found to be defective, inasmuch as it had not been properly verified as required under the rules. It was observed that the court cannot be helpless in a case where the affidavits verifying the petition is not in the prescribed form. A defective verification is only an irregularity in the procedure but will not be a ground for rejecting the petition. That the defect could be cured at any stage of the suit. To the same effect are the observations of the Supreme Court in the case of Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] Suppl. 3 SCC 565. In that case also the affidavit filed in support of the winding up application was found to be defective. The apex court found that the verification did not contain the averments which were required under the rules. Still the apex court held that even if there was slight defect or irregularity in the affidavit the applicant ought to have been given opportunity to rectify the same. The order of the Division Bench dismissing the appeal on the ground of defective affidavit was set aside. Opportunity was given to that petitioner to rectify the defect in the affidavit.

Taking support from the above decisions, it can be said that though there is a defect in the affidavit accompanying the winding up petition still the petition cannot be thrown out. Opportunity has to be afforded to the petitioner to file a proper affidavit in accordance with the rule and the form prescribed therein. Order accordingly," The petitioner is given opportunity to file a fresh affidavit within two weeks from today."

(Emphasis supplied)

The learned counsel for the Respondent-Company, however, submits that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam. It is submitted that there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

The learned counsel for the Respondent-Company further submits that the Respondent-Company can raise the plea of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per incuriam even if the said decision of the Supreme Court has been followed in the above decisions of various High Courts.

In order to appreciate the submissions made by the learned counsel for the Respondent-Company, it is necessary to notice certain decisions, which explain the doctrine of per incuriam and the doctrine of sub-silentio.

In A.R. Antulay Vs. R.S. Nayak and another, A.I.R. 1988 Supreme Court 1531, (1988) 2 SCC 602, their Lordships of the Supreme Court ( majority view) opined as follows (paragraphs 44, 45, 49, 50 and 57 of the said AIR) :

"44. It appears that when this Court gave the aforesaid directions on 16th February, 1984, for the disposal of the case against the appellant by the High Court, the directions were given oblivious of the relevant provisions of law and the decision in Anwar Ali Sarkar's case (AIR 1952 SC75)(supra). See Halsbury's Laws of England, 4th Edn., Vol. 26 page 297, para 578 and page 300, the relevant notes 8, 11 and 15; Dias on Jurisprudence, 5th Edn., pages 128 and 130; Young v. Bristol Aeroplane Co. Ltd., (1944) 2 All ER 293 at P. 300. Also see the observations of Lord Goddard in Moore v. Hewitt (1947) 2 All ER 270 at p. 272-A) and Penny V. Nicholas, (1950) 2 All ER 89, 92A. "Per incuriam" are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account to be demonstrably wrong. See Morelle v. Wakeling, [1955] EWCA Civ 1; (1955) 1 All ER 708, 718F. Also see State of Orissa v. Titaghur Paper Mills Co. Ltd., [1985] INSC 43; (1985) 3 SCR 26 : [1985] INSC 43; (AIR 1985 SC 1293). We are of the opinion that in view of the clear provisions of section 7(2) of the Criminal Law Amendment Act, 1952 and Articles 14 and 21 of the Constitution, these directions were legally wrong.

45. The principle that the size of the Bench - whether it is comprised of two or three or more Judges - does not matter, was enunciated in Young v. Bristol Aeroplance Co. Ltd. (supra) and followed by Justice Chinnappa Reddy in Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, [1984] INSC 208; (1985) 2 SCR 8 : [1984] INSC 208; (AIR 1985 SC 231) where it has been held that a Division Bench of three Judges should not overrule a Division Bench of two Judges, has not been followed by our Courts. According to well-settled law and various decisions of this Court, it is also well-settled that a Full Bench or a Constitution Bench decision as in Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) was binding on the Constitution Bench because it was a Bench of 7 Judges.

46.The principle in England that the size of the Bench does not matter, is clearly brought out in the decision of Evershed M.R. in the case of Morelle v. Wakeling, [1955] EWCA Civ 1; (1955 (1) All ER 708) (supra). The law laid down by this Court is somewhat different. There is a hierarchy within the Court itself here, where larger Benches overrule smaller Benches. See the observations of this Court in Mattulal v. Radhe Lal, [1974] INSC 103; (1975) 1 SCR 127 : [1974] INSC 103; (AIR 1974 SC 1596), Union of India v. K.S. Subramanian [1976] INSC 163; (1977) 1 SCR 87 at p. 92 : [1976] INSC 163; (AIR 1976 SC 2433 at p. 2437) and State of U.P. v. Ram Chandra Trivedi, [1976] INSC 207; (1977) 1 SCR 462 at p. 473 : [1976] INSC 207; (AIR 1976 SC 2547 at p. 2555). This is the practice followed by this Court and now it is a crystallized rule of law. See in this connection, as mentioned hereinbefore, the observations of the State of Orissa v. Titaghur Paper Mills (AIR 1985 SC 1293) (supra) and also Union of India v. Godfrey Philips India Ltd., 1985 Suppl (3) SCR 123 at p. 145 : [1985] INSC 219; (AIR 1986 SC 806 at p, 815).

49................................................................It is true that Shri Jethmalani has shown us the prayers made before the High Court which are at page 121 of the paper-book. He argued that since the transfers have been made under section 407, the procedure would be that given in section 407 (8) of the Code. These directions, Shri Jethmalani sought to urge before us, have been given in the presence of the parties and the clarificatory order of April 5, 1985 which was made in the presence of the appellant and his Counsel as well as the Counsel of the State Government of Maharashtra, expressly recorded that no such submission was made in connection with the prayer for grant of clarification............................

50.According to Shri Jethmalani, the doctrine of per incuriam has no application in the same proceedings. We are unable to accept this contention........................."

57. Shri Jethmalani urged that the directions given on 16th February, 1984, were not per incuriam. We are unable to accept this submission. It was manifest to the Bench that exclusive jurisdiction created under Section 7(1) of the 1952 Act read with section 6 of the said Act, when brought to the notice of this Court, precluded the exercise of the power under section 407 of the Code. There was no argument, no submission and no decision on this aspect at all. There was no prayer in the appeal which was pending before this Court for such directions. Furthermore, in giving such directions, this Court did not advert to or consider the effect of Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) which was a binding precedent. A mistake on the part of the Court shall not cause prejudice to any one. ................................."

(Emphasis supplied)

In Municipal Corporation of Delhi V. Gurnam Kaur, [1988] INSC 271; AIR 1989 SC 38, their Lordships of the Supreme Court explained the meaning of per incuriam and sub-silentio as follows (paragraphs 11 & 12 of the said AIR):

"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn., explains the concept of sub silentio at p. 153 in these words:

"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio."

12. In Gerard V. Worth of Paris Ltd. (K), (1936) 2 All ER 905 the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority."

(Emphasis supplied)

In State of U.P. and another Vs. Synthetics and Chemicals Ltd. and another[1991] INSC 160; , (1991) 4 SCC 139 (supra), their Lordships of the Supreme Court held as under (paras 40 and 41 of the said SCC) :

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. [Young v. Bristol Aeroplane Co. Ltd., (1944) 1 K.B. 718 :(1944) 2 All ER 293]. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, (1962) 2 SCR 558 : [1961] INSC 200; AIR 1962 SC 83), this Court while pointing out the procedure to be followed when conflicting decisions are placed before a bench extracted a passage from Halsbury's laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.

41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law ? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, 677 : (1941) 2 All ER 11, the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry, [1967] INSC 35; AIR 1967 SC 1480 : [1967] INSC 35; (1967) 2 SCR 650, it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

(Emphasis supplied)

In Government of Andhra Pradesh and another Vs. B. Satyanarayan Rao (dead) by L. Rs. and others, A.I.R. 2000 Supreme Court 1729, their Lordships of the Supreme Court held as under (paragraph 8 of the said AIR):

"8. Learned counsel for the respondent attempted to convince us that the decision in the case of State of A.P. Vs. V. Sadanandam, (AIR 1989 SC 2060 : 1989 Lab IC 2024)(supra) has to be ignored on the principle of per incuriam as certain relevant provisions of the Rules were not considered in the said case, and in any case this case requires to be referred to a larger Bench of three Judges. Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue. This is not the case here. In State of A. P. Vs. V. Sadanandam (supra) the controversy was exactly the same as it is here and this Court after considering paragraph 5 of the Presidential Order of 1975 held that the Government has power to fill a vacancy in a zone by transfer. We, therefore, find that rule of per incuriam cannot be invoked in the present case. Moreover, a case cannot be referred to a larger Bench on mere asking of a party. A decision by two Judges has a binding effect on another co-ordinate Bench of two Judges, unless it is demonstrated that the said decision by any subsequent change in law or decision ceases to laying down a correct law. We, therefore, reject the arguments of learned counsel for the respondents."

(Emphasis supplied)

In Arnit Das Vs. State of Bihar, AIR 2000 SC 2264, their Lordships of the Supreme Court held as under (paragraph 20 of the said AIR) :

"20. A decision not expressed, not accompanied by reasons and not proceeding on conscious consideration of an issue can not be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not ratio decidendi. This is the rule of sub-silentio, in the technical sense when a particular point of law was not consciously determined. (See State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, Para 41)."

(Emphasis supplied)

In M/s A-One Granites vs. State of U.P. and others, AIR 2001 Supreme Court 1203, their Lordships of the Supreme Court laid down as under (paragraphs 10, 11 and 12 of the said AIR) :

"10. The first question which falls for consideration of this Court is as to whether the question regarding applicability of Rule 72 of the Rules in relation to the present lease is concluded by the earlier decision of this Court rendered in Prem Nath Sharma v. State of U.P. , (1997) 4 SCC 552 : (1997 AIR SCW 2121 : AIR 1997 SC 2252 : 1997 All LJ 1201). From a bare perusal of the said judgment of this Court it would be clear that the question as to whether Rule 72 was applicable or not was never canvassed before this Court and the only question which was considered was whether there was violation of the said rule.

11. This question was considered by the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment. Following the said decision, this Court in the case of Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101 : [1988] INSC 271; (AIR 1989 SC 38) observed thus (at p. 43 of AIR) :

"In Gerard v. Worth of Paris Ltd.(K), (1936) 2 All ER 905 (C A), the only point argued was on the question of priority of the claimant's debt, and on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancester Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not held thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed."

In State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, reiterating the same view, this Court laid down that such a decision cannot be deemed to be a law declared to have binding effect as is contemplated by Article 141 of the Constitution of India and observed thus :

"A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141."

In the case of Arnit Das v. State of Bihar, 2000 (5) SCC 488 : (2000 AIR SCW 2037 : AIR 2000 SC 2264 : 2000 Cri LJ 2971), while examining the binding effect of such a decision, this Court observed thus (para 20) :

"A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined."

12. Thus we have no difficulty in holding that as the question regarding applicability of Rule 72 of the Rules having not been even referred to, much less considered by this Court in the earlier appeals, it cannot be said that the point is concluded by the same and no longer res integra and accordingly this Court is called upon to decide the same."

(Emphasis supplied)

In Nirmal Jeet Kaur v. State of M.P. and another, (2004) 7 SCC 558, their Lordships of the Supreme Court opined as under (paragraphs 20 and 21 of the said SCC) :

"20. In Salauddin case [1995] INSC 820; (AIR 1996 SC 1042) also this Court observed that the regular court has to be moved for bail. Obviously, an application under Section 439 of the Code must be in a manner in accordance with law and the accused seeking remedy under Section 439 must ensure that it would be lawful for the court to deal with the application. Unless the applicant is in custody his making application only under Section 439 of the Code will not confer jurisdiction on the court to which the application is made. The view regarding extension of time to "move" the higher court as culled out from the decision in K.L. Verma case [(1998) 9 SCC 348] shall have to be treated as having been rendered per incuriam, as no reference was made to the prescription in Section 439 requiring the accused to be in custody. In State v. Ratan Lal Arora [(2004) 4 SCC 590] it was held that where in a case the decision has been rendered without reference to statutory bars, the same cannot have any precedential value and shall have to be treated as having been rendered per incuriam. The present case stands at par, if not, on a better footing. The provisions of Section 439 do not appear to have been taken note of.

21. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. [(1944) 2 All E R 293] is avoided and ignored if it is rendered "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India (in short "the Constitution") which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139). To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

In Babu Parasu Kaikadi (dead) by L.Rs. Vs. Babu (dead) by L.Rs., AIR 2004 Supreme Court 754, their Lordships of the Supreme Court held as under (paragraphs 15, 16, 17 and 18 of the said AIR) :

"15. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Tatoba Kadam (supra), having not noticed the earlier binding precedent of the co-ordinate Bench and having not considered the mandatory provisions as contained in Sections 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent.

16. In Halsbury Laws of England, 4th Edition Volume 26 it is

stated :

"A decision is given per incurima when the Court has acted in ignorance of a previous decision of its own or of a Court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force."

In State of U.P. and another v. Synthetics and Chemicals Ltd. and another, reported in [1991] INSC 160; 1991 (4) SCC 139, this Court observed :

"Incuria" literally means ''carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ''quotable in law' is avoided and ignored if it is rendered, ''in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law."

17. In Govt. of Andhra Pradesh and another v. B. Satyanarayana Rao (Dead) by L. Rs. (2000(4) SCC 262), it has been held as follows :

"Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue."

18. Furthermore, this Court, while rendering judgment in Dhondiram Tatoba Kadam (supra), was bound by its earlier decision of Co-ordinate Bench in Ramchandra Keshav Adke (supra). We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the bar and also without reference to the mandatory provisions of the Act."

(Emphasis supplied)

In N. Bhargavan Pillai (dead) by L. Rs. and another Vs. State of Kerala, AIR 2004 Supreme Court 2317, their Lordships of the Supreme Court held as under (paragraph 14 of the said AIR) :

"14 Coming to the plea relating to benefits under the Probation Act, it is to be noted that Section 18 of the said Act clearly rules out application of the Probation Act to a case covered under Section 5(2) of the Act. Therefore, there is no substance in the accused-appellant's plea relating to grant of benefit under the Probation Act. The decision in Bore Gowda's case (supra) does not even indicate that Section 18 of the Probation Act was taken note of. In view of the specific statutory bar the view, if any, expressed without analyzing the statutory provision cannot in our view be treated as a binding precedent and at the most is to be considered as having been rendered per incuriam. Looked at from any angle, the appeal is sans merit and deserves dismissal which we direct."

(Emphasis supplied)

In Central Board of Dawoodi Bohra Community and another Vs. State of Maharashtra and another, AIR 2005 Supreme Court 752, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7 The Constitution Bench in the case of Chandra Prakash and Ors. Vs. State of U.P. & Anr.-(2002) 4 SCC 234. took into consideration the law laid down in Parija's case and also referred to the decision in Union of India and Anr. V. Raghubir Singh (dead) by L. Rs. etc. relied on by Ms. Indra Jaising, the learned Senior Counsel and then reiterated the view taken in Parija's case. Per incuriam means of decision rendered by ignorance of a previous binding decision such as a decision of its own or of a Court of co-ordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. It is true that Raghubir Singh's case was not referred to in any case other than Chandra Prakash & Ors.' case but in Chandra Prakash & Ors. case. Raghubir Singh's case and Parija's case both have been referred to and considered and then Parija's case followed. So the view of the law taken in series of cases to which Parija's case belongs cannot be said to be per incuriam."

(Emphasis supplied)

In Sunita Devi Vs. State of Bihar and another, AIR 2005 Supreme Court 498, their Lordships of the Supreme Court laid down as under (paragraph 20 of the said AIR) :

"20. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. (1944) 2 All ER 293, is avoided and ignored if it is rendered, "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India, 1950 (in short the ''Constitution') which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. and another v. Synthetics and Chemicals Ltd. and another [1991] INSC 160; (1991) 4 SCC 139. To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

From a perusal of the above decisions of the Supreme Court, it is evident that the doctrine of per incurium applies where the point involved in a case is decided but the decision on the point is given in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. In such circumstances, the decision is treated as per incurium.

The doctrine of sub-silentio applies where the case involves various points, and the decision is given on one or some of the points while the remaining points are not considered and are not decided. Therefore, the decision is silent on such remaining points. In such circumstances, the decision is said to pass sub-silentio on such remaining points.

In short, the doctrine of per incurium applies where the point in question is decided by the Court in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. On the other hand, the doctrine of sub-silentio applies where the point in question is not considered and decided by the Court.

In either of the two situations, the decision on the point in question is not binding.

Coming now to the present case, the doctrine of sub-silentio does not apply to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Malhotra Steel Syndicate case, the points involved were as to whether substantial compliance with Form No.3 is necessary, as to whether any non-compliance with Form No.3 is an illegality or is a mere irregularity, and as to whether fresh opportunity to rectify the defect in the affidavit should be given.

The said decision of the Supreme Court is not silent on the above points involved in the case before the Supreme Court. Therefore, the said decision cannot be said to pass sub-silentio on the said points.

The question then arises as to whether the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incurium.

From a perusal of the decisions of the Supreme Court referred to above, it will be noticed that for a decision to be rendered per incuriam, it is necessary that the following requirements should be fulfilled :

1- The decision has been given in "ignorance or forget-fulness" of some authority binding on the Court concerned or of some relevant statutory provision.

2- The said binding authority or the said statutory provision is contrary to or inconsistent with the decision of the Court concerned.

Therefore, merely because some binding authority or some statutory provision has been ignored in the decision of the Court concerned, will not render the decision per incuriam.

It is further necessary that the binding authority or the statutory provision should be inconsistent with or contrary to the decision of the Court concerned.

Further, the doctrine of per incuriam applies where the decision has been given in "ignorance or forget-fulness" of some binding authority or a relevant statutory provision. Merely because a binding authority or a relevant statutory provision has not been referred to in the decision, it will not render the decision per incuriam provided that such binding authority or statutory provision is not inconsistent with or contrary to the decision of the Court concerned.

Reference in this regard may be made to the following decisions.

In M/s Gupta Sugar Works Vs. State of U.P. and others, AIR 1987 Supreme Court 2351, their Lordships of the Supreme Court opined as follows (paragraph 12 of the said AIR) :

"12. It is true that there is no express reference to Panipat [1972] INSC 272; (AIR 1973 SC 537) and Anakapalle [1972] INSC 271; (AIR 1973 SC 734) in the judgment in New India Sugar Works. But the judgment need not be a digest of cases. It need not be written like a thesis. The decision in New India Sugar Works (AIR 1981 SC 998) may be brief, but not less predictable on the principles of Panipat and Anakapalle. There this Court found the levy price reasonable even from the point of view of the industry. This Court took into consideration the liberty reserved to manufacturers to sell freely 50 % of the sugar manufactured and also 100% of the produce by 2nd and 3rd processes. This Court was of opinion that by such a free sale the industry could get reasonable return. We agree with this conclusion and see no reason for reconsideration."

(Emphasis supplied)

In V. Sudeer, etc. Vs. Bar Council of India and another, AIR 1999 Supreme Court 1167, their Lordships of the Supreme Court held as under (paragraph 26 of the said AIR) :

"26........................................................... However, the question is whether Section 49 (1) (ah) confers such a power on the Bar Council of India. So far as this question is concerned, it has stood answered against the respondent Bar Council of India by a three Judge Bench Judgment of this Court reported in Indian Council of Legal Aid & Advice case (1995 AIR SCW 473 (supra). A. M. Ahmadi, CJI, speaking for the three Judge Bench, had to consider in the said decision, the question whether the Bar Council of India could frame a rule restricting the enrolment of advocates to the State roll to only those who had not completed 45 years of age. Holding such rule to be ultra vires the powers of the Bar Council of India under the Act, it was held that such a rule could not be sustained under Section 49 (1)(ah) as the said provision dealt with a situation after enrolment of advocates and could not take in its sweep any situation prior to their enrolment. Shri Rao, learned senior counsel for the respondent Bar Council of India, tried to salvage the situation by submitting that the said decision was pari incuriam on the ground that Section 24(3)(b) was not noticed. We have already held that Section 24 (3)(d) is the provision which permits the Bar Council of India by exercise of rule making power to make otherwise ineligible person eligible for enrolment and does not act in the reverse direction to make otherwise eligible persons ineligible. Once that conclusion is reached, Section 24(3)(d) becomes totally irrelevant for deciding the question whether the rule impugned before the three Judge Bench in that case could have been sustained by the Bar Council of India by taking resort to Section 24(3)(d). Non-consideration of such irrelevant provision, therefore, cannot make the ratio of the decision in the aforesaid case pari incurium. The second ground on which Shri Rao tried to submit that the said decision was pari incurium was by inviting our attention to a Constitution Bench Judgment of this Court in In re : Lily Isabel Thomas case [1964] INSC 5; (AIR 1964 SC 855) (supra). Now it must be kept in view that the said decision was rendered in connection with an entirely different statutory scheme. Section 52 of the Act, as noted earlier, saves power of the Supreme Court to make Rules under Article 145 of the Constitution of India for determining persons who are eligible to practise before the Supreme Court. Thus, the constitutional power of the Supreme Court for regulating the working of advocates in the Supreme Court who were otherwise entitled to practise in any Court in India under the Act could be validly exercised. When we turn to the constitutional power of the Supreme Court under Article 145, we find clearly mentioned therein that subject to the provisions of any law made by the Parliament, the Supreme Court may from time to time, with the approval; of the President, make rules for regulating generally the practice and procedure of the Court including rules as to the persons practising before the Court. As Section 52 of the Act has expressly saved the powers of the Supreme Court under Article 145 for determining the persons who shall be entitled to practise and plead before the Supreme Court, Article 145 could operate on its own without any fetter being imposed by any statutory law enacted by the Parliament. Accordingly, in the light of Article 145, a question arose before the Constitution Bench in the aforesaid case, whether the Supreme Court was competent to enact a rule in connection with advocates practicing before it, who could act as an advocate on record subject to their passing examination as laid down under the rules. The term ''persons practicing before the Court' as laid down by Article 145 (1)(a) in connection with such rule making power was interpreted to take in its sweep not only persons actually practising but even entitled to practise before the Supreme Court. In this connection, the phraseology found in the Union List in the 7th Schedule of the Constitution in Entry 77, namely persons entitled to practise before the Supreme Court was held to be in pari materia with the phrase ''persons practicing before the Court' as found in Article 145 (1)(a). In the light of the aforesaid wide sweep of Article 145 (1)(a), expressly saved by Section 52 of the Act it was held that the rule laying down examination to be undergone by practicing advocates before the Supreme Court before they could act as advocates on record was within the rule making power of the Supreme Court. It is difficult to appreciate how the aforesaid decision of the Constitution Bench rendered in the light of an entirely different constitutional scheme can be of any assistance to the Bar Council of India in the present case. For sustaining the rule making power of the Bar Council of India, the express provisions of Section 7 and Section 24 (3)(d) read with Section 49 (1)(ah) would be the only relevant provisions which were considered by this Court in a three Judge Bench judgment Indian Council of Legal Aid & Advice case (1995 AIR SCW 473) (supra). The ratio of the Constitution Bench judgment rendered in connection with an entirely different question posed for decision In the light of the relevant provisions of the constitutional scheme dealing with the rule making power of the Supreme Court under Article 145, therefore, cannot be said to be laying down anything contrary to what the three Judge Bench Judgment laid down in connection with this very statutory scheme which squarely arises for consideration in the present case. Hence, even the second ground canvassed by learned senior counsel, Shri Rao for the Bar Council of India, for whittling down the binding effect of the aforesaid three Judge Bench judgment of this Court, cannot be sustained".

(Emphasis supplied)

In Director of Settlements, A.P. and others Vs. M.R. Apparao and another, AIR 2002 Supreme Court 1598, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7. So far as the first question is concerned. Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ''declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle under-lying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An ''obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be dented that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR 1970 SC 1002 and AIR 1973 SC 794). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court, which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324). We have to answer the first question bearing in mind the aforesaid guiding principles. We may refer to some of the decisions cited by Mr. Rao in elaborating his arguments contending that the judgment of this Court dated 6th February, 1986 cannot be held to be a law declared by the Court within the ambit of Article 141 of the Constitution. Mr. Rao relied upon the judgment of this Court in the case of Pandit M.S. M. Sharma v. Shri Sri Krishna Sinha and others, 1959 Suppl (1) SCR 806, wherein the power and privilege of the State Legislature and the fundamental right of freedom of speech and expression including the freedom of the press was the subject matter of consideration. In the aforesaid judgment it has been observed by the Court that the decision in Gunupati Keshavram Reddy v. Nafisul Hasan, AIR 1954 SC 636, relied upon by the counsel for the petitioner which entirely proceeded on a concession of the counsel cannot be regarded as a considered opinion on the subject. There is no dispute with the aforesaid proposition of law."

(Emphasis supplied)

In State of Bihar Vs. Kalika Kuer @ Kalika Singh and others, AIR 2003 Supreme Court 2443: JT 2003 (4) SC 489 (supra), their Lordships of the Supreme Court held as under (paragraph 9 of the said AIR) :

"9. In Fuerst Day Lawson Ltd. v. Shivaraj V. Patil (2001) 6 SCC 356, this Court observed :

"A prior decision of the Supreme Court on identical facts and law binds the Court on the same points of law in a latter case. In exceptional instances, where obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, the principle of per incuriam may apply. Unless it is a glaring case of obtrusive omission, it is not desirable to depend on the principle of judgment "per incuriam". It has to be shown that some part of the decision was based on a reasoning which was demonstrably wrong, for applying the principle of per incuriam."

(Emphasis Supplied)

Keeping in view the above legal position, let us consider the submission of the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam.

In the present case, Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that the Affidavit verifying the petition shall be in Form No. 3.

The Companies (Court) Rules, 1959 do not contain any provision prohibiting the Court from permitting a proper Affidavit to be filed. In fact, Rule 17 of the said Rules lays down that the Forms set forth in Appendix I, where applicable, shall be used "with such variations as circumstances may require".

Moreover, Rule 9 of the Companies (Court) Rules, 1959 lays down that nothing in the said Rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

As there is no rule prohibiting the Court from permitting a proper Affidavit to be filed, it cannot be said that any statutory provision was ignored by the Supreme Court in Malhotra Steel Syndicate case (supra).

Further, there was no decision binding on the Supreme Court in this regard. The decisions on the question under consideration, which have been relied upon by the learned counsel for the Respondent-Company, were those given by the High Courts.

Therefore, it cannot be said that any binding decision was ignored by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

Hence, it is evident that neither any statutory provision nor any binding decision contrary to or inconsistent with the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) was ignored by the Supreme Court while giving the said decision.

Moreover, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the petition was not in proper Form and that the petition could not be entertained.

Having regard to the facts of the case, as evidently incorporated in the Division Bench decision of the Punjab and Haryana High Court, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding-up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was any defect or irregularity in the Affidavit, opportunity should have been given to rectify the same.

Thus, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) clearly shows that the Supreme Court was conscious of the requirements of the Companies (Court) Rules, 1959, and keeping in view the same, it gave its decision in Malhotra Steel Syndicate case (supra). Merely because the provisions of the Companies (Court) Rules, 1959 have not been specifically referred to in the decision in Malhotra Steel Syndicate case (supra), the same cannot be construed to mean that the said decision was given in ignorance of the provisions of the said Rules.

Thus, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be said to be per incuriam, as submitted by the learned counsel for the Respondent-Company.

The learned counsel for the Respondent-Company has also submitted that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not a binding precedent under Article 141 of the Constitution of India, as the Supreme Court did not consider the relevant provisions, and no ratio can be culled out from the said decision.

Reliance in this regard has been placed on the following decisions :

1-Krishena Kumar Vs. Union of India and others, AIR 1990 Supreme Court 1782 (supra).

2-Government of India Vs. Workman of State Trading Corporation & others (1997) 11 SCC 641 (supra).

3-Islamic Academy of Education and another Vs. State of Karnataka and others, 2003 (6) Supreme Court Today 303 = (2003) 6 Supreme Court Cases 697==AIR 2003 SC 3724 (supra).

Having considered the submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

Various principles, which follow from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), have already been noted in the earlier part of this judgment. Therefore, it is not correct to suggest that no ratio can be culled out from the said decision.

As regards the decisions relied upon by the learned counsel for the Respondent-Company in this regard, let us first take up Krishena Kumar case, AIR 1990 Supreme Court 1782 (supra).

In this case, their Lordships of the Supreme Court laid down as under (paragraphs 17, 18 and 19 of the said AIR ):

"17. The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara's case and how far that would be applicable to the case of the P.F. retirees.

18. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required." This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees (1882 (7) AC 259) and Lord Halsbury in Quinn v. Leathem (1901) AC 495 (502). Sir Frederick Pollock has also said : "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."

19. In other words, the enunciation of the reason or principle upon which a question before a Court has been decided is alone as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol.26, para 573 :

"The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to be bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi."

(Emphasis supplied)

This decision thus lays down that the underlying principle, that is, the general / abstract reasons or the general /abstract grounds upon which the decision is based ( as distinguished from the concrete /specific peculiarities of the particular case) form the ratio decidendi. If the ratio decidendi is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it.

Applying the above propositions to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the underlying principles, that is, the general/ abstract reasons or the general /abstract grounds upon which the said decision is based, have already been noted in the earlier part of this judgment, and the same form the ratio decidendi of the said decision in Malhotra Steel Syndidate case (supra).

In Government of India case, (1997) 11 SCC 641 (supra), the Madras High Court had relied upon a decision of the Supreme Court in G. Govinda Rajulu Vs. A.P. State Construction Corporation Ltd., 1986 Suppl SCC 651.

The Supreme Court in Government of India case (supra) held that the decision in G. Govinda Rajulu case "is virtually a non-speaking order which does not set out the facts and the circumstances in which the direction came to be issued against the Government. It is not clear as to what was the connection between the respondent-Corporation and the State Government...................it does not set out the facts or the reason for the conclusion or direction given. It can, therefore, not be treated as a binding precedent."

(Emphasis supplied)

The above propositions laid down in Government of India case (supra) have no application to the decision in Malhotra Steel Syndicate case (supra).

The decision in Malhotra Steel Syndicate case cannot be described as non-speaking order. The said decision refers to the material facts and circumstances necessary for deciding the case. It gives reasons for the conclusions drawn and the directions given in the decision.

In Islamic Academy of Education and another Vs. State of Karnataka and others, (2003) 6 Supreme Court Cases 697 (supra), their Lordships of the Supreme Court laid down as under (Paragraphs 139, 140, 141, 142, 143, 144, 145, and 146 of the said SCC) :

"139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj, (2001) 2 SCC 721).

140. In Padma Sundara Rao v. State of T.N., (2002) 3 SCC 533, it is stated (SCC p. 540, paragraph 9):

"There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial ulterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board, [1972] UKHL 1; (1972) 1 All ER 749 (HL) (Sub nom British Railways Board v. Herrington), Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases."

(See also Haryana Financial Corpn. V. Jagdamba Oil Mills,(2002) 3 SCC 496)

141. In General Electric Co. v. Renusagar Power Co., [1987] INSC 207; (1987) 4 SCC 137, it was held : (SCC p. 157, paragraph 20)

"As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words ''adjudication of the merits of the controversy in the suit' were used by this Court in State of U.P. v. Janki Saran Kailash Chandra, AIR 1973 SC 2071, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided."

142. In Rajeswar Prasad Misra v. State of W.B., [1965] INSC 130; AIR 1965 SC 1887 (sic) it was held :

"Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments. It is also well known that ratio of a decision is the reasons assigned therein."

(See also Amar Nath Om Prakash v. State of Punjab, (1985)1 SCC 345 and Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573.)

143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, wherefor, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.

144. In Keshav Chandra Joshi v. Union of India, 1992 Suppl (1) SCC 272, this Court when faced with difficulties where specific guidelines had been laid down for determination of seniority in Direct Recruit Class II Engg. Officers' Assn. V. State of Maharashtra, (1990) 2 SCC 715, held that the conclusions have to be read along with the discussions and the reasons given in the body of the judgment.

145. It is further trite that a decision is an authority for what it decides and not what can be logically deduced therefrom. (See Union of India v. Chajju Ram, (2003) 5 SCC 568.)

146. The judgment of this Court in T.M.A. Pai Foundation, (2002) 8 SCC 481, will, therefore, have to be construed or to be interpreted on the aforementioned principles. The Court cannot read some sentences from here and there to find out the intent and purport of the decision by not only considering what has been said therein but the text and context in which it was said. For the said purpose the Court may also consider the constitutional or relevant statutory provisions vis-à-vis its earlier decisions on which reliance has been placed."

(Emphasis supplied)

This decision, thus, lays down that the ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal.

This decision also lays down that a decision is an authority for what it decides and not what can be logically deduced therefrom.

Applying the above tests to the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), a reading of the said judgment in its entirety shows that the said judgment is based on the principles and reasons enumerated in the earlier part of this judgment. The said principles and reasons, therefore, constitute the ratio decidendi of the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra).

The question may be examined from another angle also, as submitted by the learned counsel for the Petitioner-Company.

Article 141 of the Constitution of India lays down as under :

"141. Law declared by Supreme Court to be binding on all Courts.--The law declared by the Supreme Court shall be binding on all Courts within the territory of India."

In view of Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts including the High Courts of the country.

Therefore, the decisions of the Supreme Court are binding on all Courts including the High Courts of the country.

It is not open to any High Court to by-pass the binding nature of the decision of the Supreme Court on the ground that certain aspects were not considered in the decision of the Supreme Court. Even if certain aspects were not specifically examined by the Supreme Court in its decision or certain statutory provisions were not specifically referred to by the Supreme Court in its decision, the same cannot take away the binding nature of the decision of the Supreme Court.

In view of the above legal position, it is evident that even if the submissions made by the learned counsel for the Respondent-Company that the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 have not been specifically referred to by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra), were to be accepted, still, the said decision of the Supreme Court will not lose its binding force on this Court.

The above legal position is apparent from the various decisions relied upon by the learned counsel for the Petitioner-Company.

In Union of India Vs. Firm Ram Gopal Hukum Chand and others, AIR 1960 Allahabad 672, a learned Single Judge of this Court held as under (paragraphs 25, 26, 27, 28 and 34 of the said AIR) :

"25. Two questions arise in this connection. First, under what circumstances will a legal principle enunciated by the Supreme Court amount to a declaration of law under Art. 141, and secondly, does this Article apply only to express declaration of law or also to those which are clearly implied ? It is necessary to examine the scope and purpose of Art. 141.

26. In the various authorities cited before me, it has been overlooked--if I may say so with deep respect---that the doctrine of the supremacy of any declaration of law by the Supreme Court has been made a part of the constitutional law of the re-public. It therefore rests on a much loftier pedestal than judicial conventions under which every inferior court is bound to follow the previous decisions of a Superior Court.

If the object had been merely to guarantee the binding force of the decisions of the Supreme Court as the highest court of the republic, no special provisions in the Constitution was required. The founders were not inserting a superfluous or redundant article in the Constitution. Many of them were eminent lawyers and jurists, and well acquainted with judicial practice and principles according to which the decisions of the Supreme Court have the same binding force as those of the House of Lords in England even without Art. 141.

27. But they were not content with the mere binding force of the decisions of the Supreme Court. The language of Art. 141 shows that the Founders intended to extend its scope beyond the actual decisions of the Supreme Court to every declaration of law made by it. This is clear from a comparison of the language of the Article with that of Sec. 212 of the Government of India Act, 1935, which gave a binding force to the decisions of the old Federal Court.

That Section provided that "the law declared by the Federal Court and by any judgment of the Privy Council shall, so far as applicable, be binding on and shall be followed by all Courts in British India". But Art. 141 of our Constitution provides that "the law declared by the Supreme Court shall be binding on all courts within the territory of India". The word "judgment" is not used, and the qualifying words "as far as applicable" have been deleted.

The omission is significant and negatives any suggestion that the Founders had in mind the principle of ratio decidendi or the binding effect of decisions, but nothing more. I am inclined to the view that Art. 141 has the effect, in addition to investing the decisions of the Supreme Court with a binding force, of creating a constitutional organ whose declaration of law pronounced ex cathedra shall be binding on all courts in the republic.

Under this article it is not necessary that a pronouncement of the Supreme Court should be part of the ratio decidendi of any judgment. An obiter dictum or a mere enunciation of a principle of law would amount to a declaration of law under Art. 141, and the manner and circumstances of its pronouncement are immaterial, provided it is made by the Supreme Court ex cathedra.

28. It was argued by Mr. Sapru that the extension of Article 141 to obiter dicta or observations which do not form part of the ratio decidendi of a judicial decision would tie up the discretion of the High Courts even in matters not decided by the Supreme Court, and it could not have been the intention of the Founding fathers to fetter the powers of the High Court to this extent. There is a short answer to this argument.

There is not the slightest ground for fearing if I may venture to say with profound respect - that the highest court of the Republic is likely to make an unrestricted use of its powers under Article 141 and flood the realm with unnecessary declarations of law. On the contrary, the Supreme Court have already taken the strict view that no principle of law should be proclaimed by it unless required for the decision of a matter in dispute before the Court.

In Central Bank of India v. Their Workmen, [1959] INSC 82; AIR 1960 SC 12, a Bench of five judges of the Supreme Court observed that it was not necessary for the Court to decide hypothetical questions which may arise in any future reference and that the Court does not give speculative opinions in the exercise of its appellate powers. Again, in Basheshar Nath v. Commr. of Income-tax, [1958] INSC 117; AIR 1959 SC 149, Das, C.J. and Kapur, J. took the view that the Supreme Court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it.

Thus the judges of the Supreme Court are, if I may say so again with profound respect, conscious that any pronouncement of law by the Court acquires "potency" under Art. 141 and that therefore such declarations should be made only when necessary. But this is a matter concerning the self-discipline of the Supreme Court which does not affect the Constitutional doctrine that any declaration of law, howsoever made, by the Supreme Court, is binding on all courts in India.

34. For these reasons I am of the opinion that Art. 141 extends to every declaration of law made by the Supreme Court even if it is obiter or not the foundation of its decision in a dispute before it. I am fortified in this view by several opinions of various High Courts, though my reasons are different. K.P. Doctor v. State of Bombay, (S) AIR 1955 Bom 220 (FB), Surajmal v. State of M.P., AIR 1958 Madh Pra 103 (FB), Sharda Prasad v. Accountant General, (S) AIR 1955 All 496. I am further of the opinion that a declaration of law may be expressed or may be indicated by clear implication.

I am also of the opinion that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law. Any re-consideration can only be done by the Supreme Court itself. Meanwhile the High Court must follow it, though it may respectfully draw the attention of the Supreme Court for consideration on a future occasion.

In fact, it may be not only the privilege but the duty of the High Court to assist the Supreme Court in its task of clearing up the litter of conflicting decisions and introducing tidiness and uniformity of legal principles over as large a field as possible by bringing it to its notice any matter requiring re-consideration --- I say ''duty' because the number of cases agitated before the High Courts all over India is much larger than those which eventually reach the Supreme Court."

(Emphasis supplied)

Thus, this decision has laid down that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law.

In Ram Manohar Lohia and others Vs. State of U.P. and others, AIR 1968 Allahabad 100, this Court held as under (paragraphs 12 and 13 of the said AIR) :

"12. It is no doubt true that in Babulal Parate's case[1961] INSC 10; , AIR 1961 SC 884 it does not appear to have been contended on behalf of the petitioners that the power conferred by Section 144 Cr. P.C. is not in the interests of things specified in clauses (2) and (3) of Article 19 of the Constitution and the section is, therefore, ultra vires, irrespective of the fact whether the restrictions it imposes are reasonable or not. But it is not possible on that basis to contend that the Supreme Court did not consider the constitutionality of the section from that point of view also. The question of the reasonableness of restrictions could arise only when the power to impose restrictions was found to be present and, therefore, the contention that the Supreme Court did not consider whether such a power really existed is unacceptable. Para 16 of the report of the judgment in that case clearly indicates that their Lordships considered the question whether the activities with regard to which the Magistrate is entitled under Section 144 Cr. P.C. to place restraint are such that their prevention would be in the interests of public order and held that they are such activities. If any doubt is still left about the scope and effect of this decision it should be dispelled by the final conclusion reached by their Lordships. That conclusion has been stated in para 34 of the report and is as follows :-

"We have, therefore, reached the conclusion that the order of the District Magistrate is not unconstitutional either because section 144 is itself violative of fundamental rights recognized in Article 19 or on the ground that it is vague and places unreasonable restrictions on those fundamental rights."

The opinion expressed in the case by their Lordships, therefore, is that section 144 Cr. P.C. does not violate Article 19 of the Constitution, and it necessarily means that such parts of the section as may have the effect of placing restrictions on the rights guaranteed under Article 19(1) (a) and (b) are respectively protected by clauses (2) and (3) of Article 19. This being the law declared by the Supreme Court it is binding on this Court under Article 141 of the Constitution and even the first ground on which the validity of section 144 has been challenged on behalf of the petitioners must accordingly be rejected.

13. The contention that such observations of the Supreme Court in the above case as cover matters beyond the reasonableness of the restrictions placed on certain fundamental rights by section 144 Cr. P. C. are obiter and, therefore, of no binding effect is wholly misconceived. A declaration of law made by the Supreme Court is not a mere precedent and the necessity of the declaration is not a condition of its binding effect. Even if such a declaration is in the nature of an obiter Article 141 of the Constitution makes it binding on all courts. But quite apart from this, it is obvious that the question whether clauses (2) and (3) of Article 19 at all permit the imposition of restrictions is logically prior to the question of the reasonableness of the restrictions, and no part of the observations of their Lordships relating to the constitutionality of section 144 Cr. P.C. was, therefore incidental or unnecessary for the decision of the case and no part of the observations can be regarded as obiter. It is a matter of no consequence that the constitutionality of section 144 Cr. P.C. was challenged in that case only on the narrow ground of the reasonableness of the restrictions placed by it and not also on the wider ground of the total absence of the power to place restrictions. A declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it. And this would be specially so when the law declared is in regard to the constitutionality of a statute or a rule, and in such a case the binding effect of the declaration cannot be measured by or limited to the points raised on behalf of the parties or to which express reference is made in the judgment. In this connection I may refer to the following cases."

(Emphasis supplied)

Thus, this decision has laid down that a declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it.

In Ballabhdas Mathuradas Lakhani and others Vs. Municipal Committee, Malkapur, AIR 1970 Supreme Court 1002 (supra), their Lordships of the Supreme Court observed as under (paragraph 4 of the said AIR) :

"4. The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, 1965-3 SCR 499 = [1965] INSC 81; (AIR 1966 SC 249). That case arose under the C.P. & Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66 (1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a taxpayer. This Court held that levy of tax on cotton ginned by the taxpayer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court".

(Emphasis supplied)

Thus, this decision has laid down that a decision of the Supreme Court is binding on the High Court and the High Court cannot ignore it on the ground that relevant provisions were not brought to the notice of the Supreme Court.

In T. GOVINDARAJA MUDALIAR ETC. ETC. Vs. THE STATE OF TAMIL NADU AND OTHERS, [1973] INSC 1; (1973) 1 SCC 336 (supra), their Lordships of the Supreme Court opined as under (paragraphs 10 and 11 of the said SCC) :

"10. The argument of the appellants in that prior to the decision in Rustom Cavasjee Cooper's case (supra), it was not possible to challenge Chapter IV-A of the Act as violation of Article 19(1)(f) owing to the decision of this Court that Article 19(1)(f) could not be invoked when a case fell within Article 31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Article 19(1)(g), and clause (f) of that article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji Munji's case (supra), and other decisions which followed it were based mainly on an examination of the inter-relationship between Article 19(1)(f) and Article 31(2). There is no question of any acquisition or requisition in Chapter IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case (supra), after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Article 19(1)(f). It was, therefore, open to those effected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Article 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument. In this connection we may refer to the observations of this court in Mohd. Ayub Khan v. Commissioner of Police, Madras and another, (1965) 2 SCR 884=AIR 1965 SC 1623, according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawati and Others v. The State of Punjab and Others, 1963 (2) SCR 774 = [1962] INSC 182; AIR 1963 SC 151, a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Article 31 (2) but it would be still open to challenge under Article 19(1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :

"The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided."

11. It is common ground in the present cases that the validity of Chapter IV-A of the Act has been upheld on all previous occasions. Merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) was not expressly considered or a decision given thereon will not take away the binding effect of those decisions on us."

(Emphasis supplied)

This decision has thus laid down that if the Supreme Court gave its decision in regard to a question, and the decision has been followed in other cases then binding effect of the decision of the Supreme Court cannot be taken away on the ground that certain aspects pertaining to the said question were not brought to the notice of the Supreme Court.

As noted above, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Pvt. Ltd. case (supra), by the Andhra Pradesh High Court in D & H SECHERON ELECTRODES (P.) LTD. case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In Ambika Prasad Mishra Vs. State of U.P. and others, AIR 1980 Supreme Court 1762 (supra), their Lordships of the Supreme Court held as under (paragraphs 5 and 6 of the said AIR) :

"5. .......................It is significant that even apart from the many decisions upholding Art. 31A, Golak Nath's case [1967] INSC 45; (1967) 2 SCR 762 : [1967] INSC 45; (AIR 1967 SC 1643) decided by a Bench of 11 Judges, while holding that the Constitution (First Amendment) Act exceeded the constituent power still categorically declared that the said amendment and a few other like amendments would be held good based on the doctrine of prospective overruling. The result, for our purpose, is that even Golak Nath's case has held Art. 31A valid. The note struck by later cases reversing Golak Nath does not militate against the vires of Art. 31A. Suffice it to say that in the Kesavananda Bharti's case, 1973 Supp SCR 1 : (AIR 1973 SC 1461) Art. 31A was challenged as beyond the amendatory power of Parliament and, therefore, invalid. But, after listening to the marathon erudition from eminent counsel, a 13 Judge Bench of this Court upheld the vires of Article 31A in unequivocal terms. That decision binds, on the simple score of stare decisis and the constitutional ground of Art. 141. Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. In this view, other submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to re-open what was laid down for the guidance of the nation as a solemn proposition by the epic fundamental rights case. From Kameshwear Singh, AIR 1952 SC 252 and Golak Nath (1967) through Kesavananda (1973) and Kannan Devan[1972] INSC 125; , (1973) 1 SCR 356 : [1972] INSC 125; (AIR 1972 SC 2301) to Gwalior Rayons[1973] INSC 167; , (1974) 1 SCR 671 : (AIR SC 2734) and after Art. 31A has stood judicial scrutiny although, as stated earlier, we do not base the conclusion on Article 31A. Even so, it is fundamental that the nation's Constitution is not kept in constant uncertainty by judicial review every season because it paralyses, by perennial suspense, all legislative and administrative action on vital issues deterred by the brooding threat of forensic blow-up. This, if permitted, may well be a kind of judicial destabilization of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake-up. It is surely wrong to prove Justice Roberts of the United States Supreme Court right when he said :Lonnie E. Smith v. S.E. Allwright, [1944] USSC 108; (1944) 321 US 649, 669 and 670--

"The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same class as a restricted railroad ticket good for this day and train only..............................................

It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

.............It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

6.It is wise to reminder that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned" (Salmond 'Jurisprudence' p. 215 (11th edition). And none of these misfortunes can be imputed to Bharti's case (AIR 1973 SC 1461) (supra )......"

(Emphasis supplied)

This decision has, therefore, laid down that the binding effect of a decision cannot be taken away or undone on the ground of every new discovery or argumentative novelty. The decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned.

In Anil Kumar Neotia and others Vs. Union of India and others, AIR 1988 Supreme Court 1353 (supra), their Lordships of the Supreme Court held as under (paragraph 18 of the said AIR) :

"18. In that view of the matter this question is no longer open for agitation by the petitioners. It is no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged. See in this connection the observations of this Court in T. Govindraja Mudaliar v. State of Tami Nadu [1973] INSC 1; (1973) 3 SCR 222 : [1973] INSC 1; (AIR 1973 SC 974), where this Court at pp. 229 and 230 of the report (SCR) : (at p. 978 of AIR) observed as follows :

"The argument of the appellants is that prior to the decision in Rustom Cavasjee Cooper's case [1970] INSC 18; (AIR 1970 SC 564) it was not possible to challenge Chapter IV-A of the Act owing to the decision of this Court that Art. 19(1)(f) could not be invoked when a case fell within Art.31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Art. 19(1)(g), and Cl. (f) of that Article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji, Munji and other decisions which followed it were based mainly on an examination of the inter-relationship between Art. 19(1)(f) and Art. 31(2). There is no question of any acquisition or requisition in Chap. IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case [1960] INSC 101; (AIR 1960 SC 1080) after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Art. 19 (1)(f). It was, therefore, open to those affected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Art. 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument, in this connection we may refer to the observations of this Court in Mohd. Ayub Khan v. Commr. of Police Madras, (1965) 2 SCR 884 : [1965] INSC 21; (AIR 1965 SC 1623) according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawanti v. State of Punjab, (1963) 2 SCR 774 : [1962] INSC 182; (AIR 1963 SC 151) a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Art. 31 (2) but it would be still open to challenge under Art. 19 (1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :-

'The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided.' "

(Emphasis supplied)

Thus, it has been laid down in the above case that the binding effect of the decision of the Supreme Court deciding a particular question cannot be co-laterally challenged on the ground that certain points / aspects in regard to the said question were not urged before the Supreme Court. In case, a particular question has been decided by the Supreme Court in its decision then the binding effect of such a decision cannot be undone on the ground that a particular argument pertaining to the question under consideration was not considered in the said decision.

In Suganthi Suresh Kumar Vs. Jagdeeshan, (2002) 2 SCC 420 (supra), their Lordships of the Supreme Court held as under (paragraphs 9, 10 and 11 of the said SCC) :

"9. It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, [1988] INSC 120; (1988) 2 SCC 587 : [1988] INSC 120; AIR 1988 SC 1353, that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.

11. When this Court pronounced in Hari Singh v. Sukhbir Singh, [1988] INSC 242; (1988) 4 SCC 551 : [1988] INSC 242; AIR 1988 SC 2127, that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this Court. Hence learned Single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose, (2001) 3 KLT 431. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline the Single Judge of the High Court has incorrectly reversed it."

(Emphasis supplied)

The above case has thus laid down that it is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. The High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

In view of the propositions laid down in the above cases, it is evident that the binding effect of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be taken away on the ground that certain aspects were not considered in the said decision of the Supreme Court or certain relevant provisions of the Companies Act, 1956 and / or the Companies (Court) Rules, 1959 were not considered by the Supreme Court in the said decision. The questions to be considered by the Supreme Court in Malhotra Steel Syndicate case (supra) have already been indicated above. The Supreme Court gave its decision on the said questions. The decision of the Supreme Court is binding on this Court, not-with-standing the contention of the learned counsel for the Respondent-Company that certain aspects or certain relevant provisions in regard to the said questions were not considered in the decision of the Supreme Court.

The matter may be considered from yet another angle.

Even a-part from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position, in my opinion, still remains the same, namely, (1) The Affidavit filed in support of the Company Petition should substantially comply with the form and verification as provided in the Companies (Court) Rules, 1959; (2) Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity; (3) In case, there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same; (4) In case, the Affidavit, filed in support of the Winding up Petition is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

It is true that in view of sub-section (2) of Section 441 of the Companies Act, 1956, which is relevant in the present case, the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up.

In view of this provision, it is evident that the winding up order passed by the Court relates back to the time of the presentation of the Petition for the winding up.

However, the above provision will not create any complication even if opportunity is given to the Petitioner-Company to file a fresh Affidavit, in case, the Affidavit, filed in support of the Winding up Petition, is found to be defective. The fresh Affidavit will relate back to the date of filing of the Petition. Therefore, the Winding up Petition will be deemed to have been validly presented on the date on which it was originally presented.

In view of this, as noted in the earlier part of the judgment, various complications pointed out in the decision of the Calcutta High Court in Gaya Textiles case (supra) and in the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), would not arise.

The above legal position is supported by various decisions, which have been given without placing reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Mrs. Roma Deb and others Vs. R.C. Sood & Co. Pvt. Ltd., [1990] 67 Company Cases 350 (Delhi) (supra), the Delhi High Court held as follows (at pages 355 and 356 of the said Company Cases) :

"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, the court would do this 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. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 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" as 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 21 and Form No.3 merely stipulated an affidavit verifying the petition. I think Mr. Chopra is right in this submission of his.

It was not disputed that the court could permit amendment of the petition. As noted above, in the present case, the 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 for the original petitioner and in that case would permit such amendments of the petition as might be necessary. Under rule 102, the amended petition shall be treated as a 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 of 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 a 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 the 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 a 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, it 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 except that I would say that in case of a winding up petition, the 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 do not think there is any bar coming in my way in permitting the petitioners to file a proper affidavit verifying the petition."

(Emphasis supplied)

Thus, in MRS. ROMA DEB case (supra), the Delhi High Court has held that a defective affidavit verifying the petition for winding up cannot be treated as fatal to the petition. The principle governing the verification of a plaint, namely, that a defect in verification is only an irregularity in procedure which can be cured at any stage of the suit, can be imported for verification of a petition for winding up. However, the Court would not permit the rectification of the defect in the verification of a petition for winding up just as a matter of course, but would take into account all the relevant circumstances, including the conduct of the parties.

Where an amendment of the petition for winding up is permitted to be made for any reason, the amended petition relates back to the date of filing of the original petition. If amendment of the petition can be allowed, there is no reason as to why a defective affidavit verifying the petition could not be rectified. In the ends of justice and if the circumstances of the case so require, it is open to the Court, in its inherent powers, to allow the petitioner to present an affidavit in support of the petition in terms of Rule 21 and Form No. 3 of the Companies (Court) Rules, 1959, if the affidavit originally filed with the petition did not conform to Form No. 3.

In SUVARN RAJARAM BANDEKAR VS. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra), the Bombay High Court laid down as under (at pages 681 and 682 ) :

"...........................................................................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly even when there is some breach or omission, whether it can be fatal to the petition.

....................................................................................

This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition......."

(Emphasis supplied)

Thus, in SUVARN RAJARAM BANDEKAR case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen as to whether it can be fatal to the Winding up Petition.

In EMA INDIA LIMITED VS. TRACKPARTS OF INDIA LIMITED, [2001] 106 Company Cases 700 (Allahabad) (supra), a preliminary objection was raised that the Winding up Petition was not maintainable as it was contrary to Rule 21 of the Companies (Court) Rules, 1959 and Sri S.K. Nigam, who had verified the Winding up Petition, was neither a Director, Secretary or Principal Officer of the Petitioner-Company and, therefore, not competent to file the Winding up Petition. This Court rejected the preliminary objection and held as follows (at Pages 704 and 705 of the said Company Cases.):

" ............................................................

Learned counsel for the respondent-company has raised a preliminary objection regarding the maintainability of the petition on the ground that the same was not in accordance with rule 21 of the Companies (Court) Rules as Sri S.K. Nigam, who has filed the present petition on behalf of the petitioner was not competent to file the same as he is neither a director, secretary or the principal officer of the company. Along with the rejoinder affidavit, the petitioner has filed a copy of the resolution by which Sri P.K. Bhargava, the managing director of the petitioner was authorised to execute a power of attorney in favour of Sri S.K. Nigam, assistant general manager (import and export) for the purposes of filing the present company petition and to do all such acts and things as was necessary. The power of attorney executed by Sri P.K. Bhargava in favour of Sri S.K. Nigam is also on the record. Having considered the said documents and the submissions made by the parties, I am unable to hold that the present winding up petition has been filed by a person who was not authorised to do so or there has been any violation of the provisions of rule 21 of the Companies (Court) Rules. The preliminary objection, therefore, raised by learned counsel for the respondent is not tenable.

......................................................."

This decision relied upon by the learned counsel for the Petitioner-Company, is not relevant in the present case as it has not been disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit in support of the Company Petition, is an authorised person.

In SAND PLAST (INDIA) LTD. V. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Rajasthan), an objection was raised that the Affidavit filed in respect of the Winding up Petition was not in conformity with the provisions of the Companies Act, 1956 and the Rules made thereunder.

A Division Bench of the Rajasthan High Court laid down as under (at pages 483 and 484 of the said Rajasthan High Court):

" .........................................Likewise, rule 21, which provides for affidavit verifying a petition states that every petition shall be verified by an affidavit made by the petitioner and in case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof ; such affidavit shall be filed along with the petition and shall be in Form No.3. Whereas, in rule 18, which deals with affidavits and also prescribes procedure as to how the affidavit shall be drawn up. There is no form prescribed for the affidavits to be filed under the rules. Rule 21, which is undoubtedly statutory in nature and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be brushed aside. In our opinion, the affidavit filed in the present case, complies with the requirement of rule 21. In this case, the person who filed the affidavit in the winding up petition has disclosed the source of information on the basis of which he verified that the contents of the affidavit are believed to be true.

Rule 21 requires every petition for winding up of a company to be accompanied by an affidavit verifying the petition in Form No. 3. In our view, the defect if any, in the verification is only an irregularity in procedure, which can be cured at any stage of the proceedings. It is not an incurable defect as contended by Mr. Paras Kuhad. Even if there is a defect, an amendment of the petition and the affidavit can be permitted to be filed. The court, in our opinion, can in the ends of justice and in its inherent power allow the petitioner or a party to a proceeding to present an affidavit in support of the petition in terms of rule 21 and Form No.3. This power can be exercised if the affidavit originally filed with the petition did not conform to Form No.3. In our opinion, the affidavit filed with the company petition strictly conforms to rule 21 and the form prescribed, namely, Form No. 3. On the other hand, an affidavit filed under rule 18 shall be drawn up in the first person and shall state the full name, age, occupation, etc. An affidavit which is not in the prescribed form is of no value and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law and, therefore, it is liable to be rejected. Where an affidavit is filed under rule 18, the provisions of Order 19, rule 3 must be strictly observed and an affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.

In our opinion, rule 18 is of no application. The reliance sought to be placed by the appellant-company on rule 18 is misconceived since it deals with the affidavit in general, whereas, rule 21 deals with the requirement of an affidavit, i.e., to be filed in support of a substantive petition as in the instant case. In view of the fact that the affidavit sworn to by Shri Vivek Mazumdar verifying the winding up petition is in the prescribed form, the objections raised by the appellant are unsustainable."

(Emphasis supplied)

The Division Bench of the Rajasthan High Court further observed as under (at pages 488 and 489 of the said Company Cases) :

"Mr. Kuhad cited the case of Mool Chand Wahi's case [1986] 60 Comp Cas 198, wherein the Punjab and Haryana High Court held that the petition for winding up is required to be accompanied by an affidavit in due form and that if an affidavit is not in due form, no value can be attached to it. The Punjab and Haryana High Court was considering rules 11 (a), 18, 21 and Form No. 3 in that case.

In the appeal preferred, the Division Bench of the same High Court held that under rules 11(a), 18, 21 of the rules, a petition for winding up is required to be accompanied by an affidavit in a proper form and an affidavit which is not in due form is not valid. This judgment is reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H).

Learned counsel then relied on the case of Malhotra Steel Syndicate's case [1989] 65 Comp Cas 546 of the Punjab and Haryana High Court, Majithia J. has doubted the principles laid down in the aforementioned decisions. In para 9, the learned single judge has observed that, sitting singly, he is bound by the judgment reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H) and that he has got serious doubts about the correctness made in the judgment. The petition is liable to be rejected on the sole ground that the affidavit accompanying petition is not verified according to law. According to the learned Judge, it was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with rule 21 of the rules and irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. With respect to the learned judges of the Punjab and Haryuana High Court who rendered judgments reported in Mool Chand Wahi's case [1986] 60 Comp Cas 198 and Mool Chand Weahi's case [1986] 60 Comp Cas 402, we are unable to agree or subscribe with the proposition of law laid down by the said court. We have already held that an affidavit accompanying petition would not require compliance with rule 18 of the rules and rule 21 is the relevant rule and Form No.3 is the relevant from and no more. Another decision of the Punjab and Haryana High Court reported in Registrar of Companies, Punjab v. New Suraj Financers and Chit Fund Co. Pvt. Ltd. [1990] 69 Comp Cas 104, was cited. A learned single judge of the Punjab and Haryana High Court held (headnote):

"An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. Amendment of a petition for winding up, if allowed, relates back to the date of presentation of the petition. It would lead to a great deal of confusion if the petitioner were allowed to swear and supply a fresh affidavit at a later stage because rights of third parties would crop up.

Held, on the facts, that since the blanks indicating the numbers of the paragraphs in the affidavit filed in support of the petition had been left blank, it was not in accordance with law and the verification of the petition also could not be treated as being in accordance with law. The petition therefore, had to be dismissed."

For the reasons above mentioned, we are unable to agree with the proposition of law laid down by the learned single judge of the Punjab and Haryana High Court in this case."

(Emphasis supplied)

It will thus be seen that the Rajasthan High Court dissented from the view taken by the Punjab & Haryana High Court in various cases including Mool Chand Wahi case (supra) and Registrar of Companies, Punjab case (supra).

In view of the above, it is evident that independently of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position is the same as mentioned above.

In view of the aforesaid discussion, I am of the opinion that the aforementioned Company Application No. 72405 of 2004 (Paper No. A-10), filed on behalf of the Petitioner-Company, deserves to be allowed, and the same is, accordingly, allowed.

The prayer made in the said Application is granted. The Petitioner-Company is permitted to bring on record, the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure 'A' to the said Company Application (Paper No. A-10) and its supporting Affidavit, and it is directed that the said Affidavit, sworn on 13th April, 2004, will be read as being the Affidavit in support of the Company Petition.

In consequence of the above order, allowing the said Company Application (Paper No. A-10), the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9) (filed on behalf of the Respondent-Company) is liable to be dismissed, and the same is, accordingly, dismissed.

Dt. 07-12-2007/ak

Company Petition No. 46 of 2002/Resd.

Reserved

Company Petition No. 46 of 2002

M/s Paharpur Cooling Towers Ltd........................Petitioner

Versus

M/s Anuradha Masala Udhyog Pvt. Ltd. .................Respondent

*****

Hon'ble S.P.Mehrotra, J.

Order On

1-Company Application No. 73312 of 2004 (Paper No. A-9).

2-Company Application No. 72405 of 2004 (Paper No.A-10).

The aforementioned Company Petition No. 46 of 2002 has been filed by M/s Paharpur Cooling Towers Limited (Petitioner-Company), under Section 433 (e) read with Section 434 (1)(a) and Section 439 of the Companies Act, 1956, inter-alia, praying that the Respondent-Company, namely, M/s Anuradha Masala Udhyog Pvt. Lmt., having its Registered Office at 59/132-A, L-2-4, Akash Deep Building, Old Dalmandi, Nayaganj, Kanpur (U.P.) -208001 be wound up by this Court under the provisions of the Companies Act, 1956.

An Affidavit, sworn on 6th September, 2002 by Santosh John, stating himself to be an Officer in the Petitioner-Company, has been filed along with the said Company Petition.

On 10th September 2002, when the case was taken up, none appeared for the petitioner. Therefore, the Court by its order dated 10th September, 2002 directed that Company Petition be "put up tomorrow as a fresh matter before the appropriate Bench".

It further appears that by the order dated 12th September 2002, the Court permitted the Petitioner-Company to move Amendment Application for amending paragraph 1 of the Company Petition as the address of the Petitioner-Company for service of notice was mentioned, as that of its counsel at New Delhi.

The said order dated 12th September, 2002 is reproduced below :

"As prayed, list on 3rd October, 2002 to enable the petitioner to move amendment application for amending paragraph 1 of this petition, which states that the address of the petitioner for service of notice is of its counsel at New Delhi. Under the rules of the Court before filing any document or the Counter Affidavit its copy is required to be served on the other side and endorsement is to be obtained on the original, regarding receipt. It would be most unreasonable to expect the opposite party in response to the notice, if issued, to go to New Delhi to serve the copy of the Counter Affidavit."

It further appears that pursuant to the said order dated 12th September, 2002, an Amendment Application dated 30th September, 2002 (Paper No.A-5) was filed on behalf of the Petitioner-Company, inter-alia, praying for being permitted to amend Paragraph 1 of the Company Petition as also Prayer (b) in the Prayer Clause of the Company Petition.

By the order dated 3rd October 2002, the said Amendment Application dated 30th September, 2002 (Paper No. A-5) was allowed, and notice of the amended Company Petition was directed to be issued to the Respondent-Company. The said order dated 3rd October, 2002 is quoted below :

"Amendment Application dated 30-09-2002 is allowed, Necessary amendment may be incorporated in the original petition within three days. After amendment is in-corporated, notice of amended petition will be issued to the Respondent/ Company i.e. M/s Anuradha Masala Udhyog Pvt. Ltd. Notices will be made returnable at an early date."

It further appears that a Counter Affidavit, sworn on 12th October 2003, in reply to the said Company Petition was filed on behalf of the Respondent-Company.

The Petitioner-Company filed its Rejoinder Affidavit, sworn on 22nd November, 2003 (Paper No. A-12), in reply to the said Counter Affidavit filed in the main Company Petition.

It further appears that on 31st March, 2004, the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9), shown at Serial No. 1 above, was filed on behalf of the Respondent-Company.

It is, inter-alia, stated in the said Company Application (Paper No.A-9) that the Affidavit, filed in support of the Company Petition, is no Affidavit in the eyes of law, inasmuch as, the mandatory requirements of Rule 21 and Form 3 of the Companies (Court) Rules, 1959 have not been complied with; and that since there is no Affidavit in support of the Company Petition, as required by Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition, in this Form, is not maintainable and is liable to be dismissed.

It is, inter-alia, prayed in the said Company Application (Paper No. A-9) that the present Company Petition be dismissed as not maintainable.

An Affidavit, sworn on 30th March 2004, was filed in support of the said Company Application (Paper No. A-9).

By the order dated 31st March 2004, the Court, inter-alia, granted time to the learned counsel for the Petitioner-Company for filing reply to the said Application.

The said order dated 31st March, 2004 passed on the said Application (Paper No. A-9) is as follows :

"The present application has been filed today on behalf of the respondent-company.

Registry is directed to give appropriate number to the application.

Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted one week's time for filing reply to the present application. The respondent-company may file its Rejoinder Affidavit within another week thereafter.

List this case on 20-4-2004."

It further appears that on 17th April, 2004, the Petitioner-Company filed its Reply (Paper No.A-11) in reply to the Company Application (Paper No. A-9). The said Reply, filed on behalf of the Petitioner-Company, was accompanied by an Affidavit, sworn on 13th April, 2004.

It further appears that on 17th April, 2004, the Petitioner-Company also filed the aforementioned Company Application No. 72405 of 2004 (Paper No.A-10), shown at Serial No. 2 above, under Rules 6, 9 and 21 of the Companies (Court) Rules, 1959 read with Section 151 Code of Civil Procedure.

It is, inter-alia, stated in the said Application (Paper No. A-10) that the Affidavit filed on behalf of the Petitioner-Company in support of the Company Petition substantially complied with the requirements of Form 3 of the Companies (Court) Rules, 1959, but in order to put the controversy to rest, the Petitioner-Company seeks leave of this Court to file an additional Affidavit of Santosh John, who is working as Assistant Manager (Administration) with the Petitioner-Company, in support of the said Company Petition verbatim as prescribed in Form 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959.

An Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as an Assistant Manager with the Petitioner-Company, was filed along with the said Company Application (Paper No. A-10) in support of the said Application (Paper No.A-10).

Further, an Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as Assistant Manager (Administration) with the Petitioner-Company, was filed in Form No.3 as Annexure ''A' to the said Company Application (Paper No.A-10) and its supporting Affidavit.

It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file an Affidavit in the prescribed Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959 of Santosh John, Assistant Manager (Administration), which has been annexed as Annexure ''A' to the said Company Application (Paper No. A-10).

It further appears that on 10th May, 2004, a Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No. A-14), was filed on behalf of the Respondent-Company in reply to the aforesaid Reply (Paper No. A-11), filed on behalf of the Petitioner-Company.

Further, on 10th May, 2004, a Counter Affidavit, sworn on 30th April, 2004 (Paper No. A-13), was also filed on behalf of the Respondent-Company in reply to the aforesaid Company Application (Paper No.A-10), filed on behalf of the Petitioner-Company.

In the circumstances, the Court passed the following order on 10th May, 2004:

"Counter Affidavit has been filed today on behalf of the Respondent-Company in reply to Civil Misc. Application No. 72405 of 2004 (Paper No. A-10).

Sri Rajiv Nayan holding brief for Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted two weeks' time for filing Rejoinder Affidavit to the said Counter Affidavit.

Rejoinder Affidavit has been filed today on behalf of the Respondent-Company against the reply filed on behalf of the petitioner (Paper No.A-11) in respect of Civil Misc. Application No. 73312 of 2004 (Paper No. A-9) filed on behalf of the Respondent-Company.

List this case on 9-7-2004"

On 9th July, 2004, a Rejoinder Affidavit, sworn on 8th July, 2004, was filed on behalf of the Petitioner-Company in reply to the aforesaid Counter Affidavit (Paper No.A-13), filed on behalf of the Respondent-Company.

I have heard Sri Anil Sharma, learned counsel for the Respondent-Company and Sri Deepak Sabarwal, learned counsel for the Petitioner-Company at length in respect of the aforesaid Company Application No.73312 of 2004 (Paper No. A-9) as also the aforesaid Company Application No. 72405 of 2004 (Paper No. A-10), and perused the record.

Sri Anil Sharma, learned counsel for the Respondent-Company has made the following submissions :

1-Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition, presented by a body corporate, shall be verified by an Affidavit made by a Director, Secretary or other Principal Officer of such body corporate. The said Rule 21, inter-alia, further provides that the said Affidavit shall be filed alongwith the Company Petition and shall be in Form No.3.

2. It is not disputed that the Affidavit in support of the present Company Petition has been given by Santosh John who is a Principal Officer of the Petitioner-Company. However, verification of various paragraphs of the Company Petition has not been done as per the requirements of paragraph 2 of the Affidavit given in Form No.3 of the Companies (Court) Rules, 1959.

It is pointed out that paragraph 2 of the Affidavit, given in Form No. 3 of the Companies (Court) Rules, 1959, makes it obligatory upon the deponent of the Affidavit to state as to which paragraphs of the Company Petition are true to his personal knowledge and which paragraphs of the Company Petition are based on information. This mandatory requirement has not been complied with in the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition.

Consequently, the said Affidavit filed in support of the present Company Petition is no Affidavit in the eyes of law. As there is no Affidavit in support of the present Company Petition as per the requirements of Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition is not maintainable and is liable to be dismissed, as prayed for in the said Company Application (Paper No. A-9).

3. In a Winding up Petition, if the supporting Affidavit is not in Form No.3, then there is no Winding up Petition before the Court. This is because, the statement made in the Winding up Petition must be supported by an Affidavit in Form No. 3, as provided in Rule 21 of the Companies (Court) Rules, 1959.

4. The Petitioner-Company has taken contradictory stand in its Reply (Paper No. A-11). On the one hand, the Petitioner-Company maintains that the Affidavit filed in support of the present Company Petition substantially complied with all the requirements of Form No. 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company sought permission /opportunity to file a fresh Affidavit in support of the present Company Petition in accordance with the relevant Rule and Form as per the provisions of the Companies (Court) Rules, 1959.

Reference is made to paragraphs 3 and 4 of the preliminary objections and paragraph 6 of the Reply on merits, as contained in the said Reply (Paper No. A-11) filed on behalf of the Petitioner-Company.

5. Section 441 of the Companies Act, 1956, inter-alia, provides that the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up. Therefore, the date of presentation of the Petition for the winding up, duly supported by an Affidavit, as required by the Companies (Court) Rules, 1959, is the material date.

As such, it is not open to the Petitioner-Company to file an Affidavit subsequent to the presentation of the Petition for the winding up. The Affidavit in proper Form must accompany the Petition for the winding up. Subsequently, the Petitioner-Company cannot be permitted to file an Affidavit in Form No. 3. Once, the Petition for the winding up is presented, then at no stage, the Petitioner-Company can be permitted to file an Affidavit in Form No. 3.

6. It is pointed out that the winding up order relates back to the date of presentation of Winding up Petition. In case, permission is granted to file an Affidavit in Form No.3 subsequent to the presentation of the Winding up Petition, then various difficulties/ complications would arise.

It is submitted that a proper Affidavit must accompany the Winding up Petition at the time of presentation of the Petition. In case, proper Affidavit is not filed with the Winding up Petition when presented, the Petition would be a defective Petition. Such a Petition would be no Petition in the eyes of law.

Now if the defect in the Winding up Petition is permitted to be removed subsequently by permitting the petitioner to file a fresh Affidavit then the Winding up Petition would be deemed to be presented on the date of removal of such defect.

This will result in various difficulties / complications. For example, the Company in question, may transfer its assets during the period between the date of presentation of the Winding up Petition and the date of filing of subsequent Affidavit, and may contend that such transfer cannot be assailed on the ground of fraud as there was no Winding up Petition pending in the eyes of law on the date of such transfer.

Similarly, during the period between the date of presentation of Winding up Petition and the date of filing of subsequent Affidavit, the debt on the basis of which the Winding up Petition has been filed, may become time-barred. Now the Winding up Petition cannot be filed on the basis of such time-barred debt. Permitting the petitioner to file subsequent Affidavit will result in the entertainment of the Winding up Petition on the basis of such time-barred debt.

It is also pointed out that under Section 447 of the Companies Act, 1956, the winding up order operates in favour of all the creditors and of all the contributories of the Company as if it had been made on the joint Petition of a creditor and of a contributory.

In case, permission is granted to file Affidavit subsequently, further complications would arise in view of the provisions of Section 447 of the Companies Act, 1956.

7. Sri Sharma has placed reliance on the following decisions:

(i)- In the matter of Gaya Textiles Private Ltd. etc. and Star Textile Engineering Works Ltd., AIR 1968 Calcutta 388 (Paragraphs 4, 5, 11 and 12).

(ii)- Mool Chand Wahi vs. National Paints Pvt. Ltd. & another, [1986] 60 Company Cases 198 (P. and H.), which was a decision by a learned Single Judge of the Punjab and Haryana High Court.

(iii)- Mool Chand Wahi vs. National Paints (Pvt.) Ltd. & another, [1986] 60 Company Cases 402 (P. and H.), wherein a Division Bench of the Punjab and Haryana High Court affirmed the aforesaid decision of the learned Single Judge in Mool Chand Wahi case (supra).

(iv)- Registrar of Companies, Punjab Vs. New Suraj Financiers and Chit Fund Co. (P) Ltd., [1996] 4 Company Law Journal 308 (P & H) :[1990] 69 Comp Cases 104 (P. & H.).

In reply, Sri Deepak Sabarwal, learned counsel for the Petitioner-Company has made the following submissions:

1. It is not disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit filed along with the Company Petition, was authorised to swear Affidavit on behalf of the Petitioner-Company.

The objection raised on behalf of the Respondent-Company is only in regard to the Form of the said Affidavit, namely, verification of the contents of the Company Petition as contained in paragraph 2 of the said Affidavit.

Reference in this regard is made to paragraph 9 of the Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No.A-14), filed on behalf of the Respondent-Company.

In the said paragraph 9 of the Rejoinder Affidavit, it is, inter-alia, stated as follows ".......It is no where stated by the Respondent-Company that Sri Santosh John was not authorised."

2. Three questions arise for consideration in the present case:

(A) If the Affidavit in support of the Winding up Petition is not para-materia with the prescribed Form No.3, is the Winding up Petition liable to be dismissed ? In other words, whether strict compliance with Form No.3 is necessary or substantial compliance with Form No.3 would suffice ?

(B) Is the prescription in Form No.3 mandatory in nature ? In other words, whether non-compliance with Form No. 3 is an illegality, or is a mere irregularity ?

(C ) In case, the Affidavit filed in support of the Winding up Petition is found to be defective on account of non-compliance with Form No. 3, whether fresh opportunity should be given to rectify the defect ?

Answering the above questions, it is submitted :

(A)Substantial compliance, and not strict compliance, with Form No.3 is necessary.

(B)In case, there is any non-compliance with Form No. 3, the same is a mere irregularity.

(C)In case, the Affidavit is found to be defective on account of non-compliance with Form No.3, then opportunity should be given to rectify the defect.

Reliance in this regard is placed on the decision of the Apex Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., 1993 Supp. (3) Supreme Court Cases 565.

3. In view of the aforementioned Supreme Court decision in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd. case (supra), overruling the Division Bench decision of the Punjab and Haryana High Court, the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), relied upon by the learned counsel for the Respondent-Company, stood overruled.

Similar will be the fate of the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra) wherein the Division Bench decision of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) was relied upon.

Further, the decision of the Calcutta High Court in Gaya Textiles case (supra), relied upon by the learned counsel for the Respondent-Company, also stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) followed the said decision of the Calcutta High Court in Gaya Textiles case(supra).

Reference is further made to the decision of the learned Single Judge of the Punjab & Haryana High Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Limited, [1989] 65 Company Cases 546 (P. & H.) which was challenged before the Division Bench of the Punjab & Haryana High Court. Against the decision of the Division Bench of the Punjab & Haryana High Court, Appeal was filed before the Supreme Court which was decided by the Supreme Court by its aforementioned decision reported in 1993 Supp.(3) SCC 565.

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in his decision in Malhotra Steel Syndicate case (supra) expressed his doubt about the correctness of the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra).

4. The submissions made under heads (2) and (3) above are supported by the following decisions, wherein the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed :

(i)DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj.).

(ii)WELDING RODS PVT. LTD. Vs. INDO BORAX AND CHEMICALS LTD.,[2002] 108 Company Cases 747 (Guj.).

It is further submitted that the following decisions further support the submissions made under heads (2) and (3) above :

(1)MRS.ROMA DEB AND OTHERS Vs. R.C.SOOD & CO. PVT. LTD., [1990] 67 Company Cases 350 (Delhi).

(2)D & H SECHERON ELECTRODES (P) LTD. Vs. VOLTARE ELECTRODES (P) LTD., [1997] 89 Company Cases 592 (A.P.).

(3)SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.).

(4)EMA INDIA LIMITED Vs. TRACKPARTS OF INDIA LTD., [2001] 106 Company Cases 700 (All.).

(5)G.K.W. LTD. Vs. SHRIRAM BEARINGS LTD., [2002] 109 Company Cases 636 (Delhi).

(6)SAND PLAST (INDIA) LTD. Vs. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Raj.).

5. In view of the decisions referred to in head (4) above, it is evident that

(a) Defect in Affidavit is only an irregularity which may be cured at any stage.

(b) Opportunity to file proper Affidavit can be given subsequently.

(c) Such Affidavit filed subsequently relates back to the date of presentation of the Winding up Petition.

6. As regards the difficulties / complications mentioned by Sri Anil Sharma, learned counsel for the Respondent-Company on the basis of the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), it is submitted that the said decisions stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

Further, the fresh Affidavit filed subsequently would relate back to the date of presentation of the Winding up Petition, and, therefore, the Winding up Petition would be deemed to have been validly presented on the date of its original presentation. As such, the difficulties / complications mentioned by Sri Anil Sharma would not arise.

In Rejoinder, Sri Anil Sharma, learned counsel for the Respondent-Company has reiterated the submissions made by him earlier.

Besides, Sri Sharma has made the following further submissions:

1- In the Supreme Court decision in Malhotra Steel Syndicate case (supra), there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

Therefore, the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

Reliance in this regard is placed on the following decisions :

(i)KRISHENA KUMAR Vs. UNION OF INDIA AND OTHERS, AIR 1990 Supreme Court 1782.

(ii)STATE OF U.P. & ANOTHER Vs. SYNTHETICS & CHEMICALS LTD. & ANOTHER, [1991] INSC 160; (1991) 4 SCC 139.

(iii)GOVERNMENT OF INDIA Vs. WORKMEN OF STATE TRADING CORPORATION & OTHERS, (1997) 11 SCC 641.

(iv)ISLAMIC ACADEMY OF EDUCATION & ANOTHER Vs. STATE OF KARNATAKA & OTHERS, 2003(6) Supreme Court Today 303 : A.I.R. 2003 SC 3724 : (2003) 6 SCC 697.

(v) STATE OF BIHAR Vs. KALIKA KUER @ KALIKA SINGH AND OTHERS, JT 2003 (4) SC 489 : AIR 2003 SC 2443.

2. A perusal of Form No.3 of the Companies (Court) Rules, 1959 shows that the Affidavit has to be in four parts :

A-Name and other details of the deponent.

B-Paragraph 1 of the Affidavit in regard to the designation and authorization of the deponent.

C-Paragraph 2 of the Affidavit containing verification of the paragraphs of the Company Petition.

D-Verification of the Affidavit.

In Malhotra Steel Syndicate case (supra), the defect was only in the verification clause of the Affidavit, i.e. Part ''D' above. The Supreme Court was of the opinion that the said defect was "slight defect or irregularity", and "the appellant should have been given an opportunity to rectify the same."

Therefore, it is only when there is "slight defect or irregularity" in the affidavit, that opportunity should be given to rectify the same.

It is submitted that in Malhotra Steel Syndicate case (supra), there was imperfect verification of the Affidavit (i.e. Part ''D' above), which was held to be "slight defect or irregularity".

On the other hand, in the present case, the defect is in the verification of the contents of the Company Petition as per the requirements of paragraph 2 of the Affidavit contained in Form No.3 (i.e. Part ''C' above).

There is no mention of the paragraphs of the Company Petition in paragraph 2 of the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition. There is no mention as to which paragraphs of the Company Petition are true on personal knowledge and which paragraphs are based on information, received from the company records etc. Such defect in the Affidavit is a material defect.

Such defect in the Affidavit cannot be said to be a "slight defect or irregularity".

`Therefore, the Supreme Court decision in Malhotra Steel Syndicate case (supra) is not applicable to the present case.

In view of the submissions made by Sri Anil Sharma, learned counsel for the Respondent-Company, in rejoinder, in regard to the Supreme Court decision in Malhotra Steel Syndicate case (supra), Sri Deepak Sabarwal, learned counsel for the Petitioner-Company was given opportunity to make further submissions in regard to the said point raised by Sri Anil Sharma, learned counsel for the Respondent-Company.

Sri Sabarwal has made the following further submissions :

1- The judgment of the Supreme Court is binding on all Courts including the High Courts of the country in view of the provisions of Article 141 of the Constitution of India. It is not open to any High Court to say that since certain aspects were not considered in the Supreme Court judgment, so the judgment of the Supreme Court is not binding. If the Supreme Court proceeds to decide the case on one aspect, then it is not open to any High Court to say that the judgment of the Supreme Court is not binding, as other aspects were not considered by the Supreme Court. Even if certain aspects were not examined by the Supreme Court in its judgment, it cannot be said that the judgment of the Supreme Court is not binding.

It is submitted that in view of the above legal position, even if the submission of the learned counsel for the Respondent-Company that the Supreme Court in Malhotra Steel Syndicate case (supra) did not notice certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959, were to be accepted, still the said Supreme Court decision will not loose its binding force on this Court. It is not open to this Court to say that the said decision of the Supreme Court is not binding in view of the said submission made by the learned counsel for the Respondent-Company.

Reliance in this regard has been placed on the following decisions :

(i)UNION OF INDIA Vs. FIRM RAM GOPAL HUKUM CHAND & OTHERS, A.I.R. 1960 All. 672.

(ii)RAM MANOHAR LOHIA & OTHERS Vs. STATE OF UTTAR PRADESH AND OTHERS, A.I.R.1968 All. 100.

(iii)BALLABHADAS MATHURADAS LAKHANI & OTHERS Vs. MUNICIPAL COMMITTEE, MALKAPUR, A.I.R. 1970 Supreme Court 1002.

(iv)T. GOVINDARAJA MUDALIAR ETC. Vs. THE STATE OF TAMIL NADU & OTHERS, [1973] INSC 1; (1973) 1 SCC 336.

(v)AMBIKA PRASAD MISHRA Vs. STATE OF UTTAR PRADESH & OTHERS, A.I.R.1980 Supreme Court 1762.

(vi)ANIL KUMAR NEOTIA & OTHERS Vs. UNION OF INDIA & OTHERS, A.I.R. 1988 Supreme Court 1353.

(vii)SUGANTHI SURESH KUMAR Vs. JAGDEESHAN, (2002) 2 SCC 420.

2. The decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not per in-curium, as submitted by the learned counsel for the Respondent-Company.

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the Petition was not in proper Form and that the Petition could not be entertained.

Having noticed the facts of the case, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was some slight defect or irregularity in the Affidavit, "the appellant should have been given an opportunity to rectify the same".

It is submitted that the Supreme Court considered the facts of the case as emerging from the impugned judgment of the Division Bench of the Punjab and Haryana High Court, and concluded that the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court has further laid down the law that even if there is defect in the Affidavit, filed in support of the Application for winding up, an opportunity should be given to rectify the same.

This is the ratio of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra). Even if certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 are not specifically mentioned in the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), it cannot be concluded that the said provisions were not considered by the Supreme Court while arriving at its decision as contained in the said judgment.

In any case, merely because the said provisions have not been specifically referred to in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), it will not take away the binding effect of the said decision nor can the decision be described as per in-curium.

It is submitted that mere non-mention of certain provisions in the decision of the Supreme Court will not take away its binding force, particularly when the said decision has been followed by certain High Courts.

3. The decisions relied upon by the learned counsel for the Respondent-Company in support of his plea of per in-curium, are distinguishable, and the same are not applicable to the facts and circumstances of the present case.

In reply to the above further submissions made by Sri Deepak Sabarwal, learned counsel for the Petitioner-Company, Sri Anil Sharma, learned counsel for the Respondent-Company reiterated his earlier submissions regarding the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per in-curium.

Sri Sharma has made the following further submissions :

(i)Reasoning of the learned Single Judge of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) and the reasoning of the Division Bench of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) have not been dealt with by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

(ii)Even if the Supreme Court judgment in Malhotra Steel Syndicate case (supra) has been followed by certain High Courts, the said fact will not debar the Respondent-Company from raising the plea that in view of the correct legal position, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

I have considered the submissions made by the learned counsel for the parties, and perused the record.

Two main questions which arise in the present case, are :

1-Whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective ?

2-If the said Affidavit filed in support of the Company Petition is held to be defective, should the petitioner be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company ?

Let us consider the afore-mentioned Question No.1, namely, as to whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective.

In order to decide this question, it is necessary to refer to Rule 21 of the Companies (Court) Rules, 1959, as well as Form No.3 contained in Appendix I to the said Rules.

The said Rule 21 is as follows :

"R.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 the case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof, such affidavit shall be filed 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."

The said Form No. 3 is reproduced below :

Form No.3

[See rule 21]

[Heading as in Form No.1]

Company Petition No.............. of 19..

Affidavit verifying petition.

I, A.B., son of .....................aged ........residing at .......................

......................... do, solemnly affirm and say as follows :-

1. I am a director/secretary/............... of ............. Ltd., the petitioner in the above matter *(and am duly authorised by the said petitioner to make this affidavit on its behalf.)

[Note.--This paragraph is to be included in cases where the petitioner is the company.]

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.

*Note.- To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

__________________

It is true that the Companies (Court) Rules, 1959 are statutory in nature, and the Forms prescribed in Appendix I to the said Rules should be adopted having regard to the nature of proceedings. However, in my opinion, what is required is substantial compliance with the Forms prescribed in the said Appendix I to the said Rules. Literal compliance with the said Forms, in my view, cannot be insisted upon.

Whether there has been substantial compliance with the Forms prescribed under the said Rules will depend upon the facts and circumstances of each case and the nature of proceedings in question.

In this connection, it is pertinent to refer to Rule 17 of the Companies (Court) Rules, 1959, which is as follows :

"R.17. Forms.--The forms set forth in Appendix I, where applicable, shall be used with such variations as circumstances may require."

(Emphasis supplied)

Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition must be verified by an Affidavit made by the petitioner or by one of the petitioners, where there are more than one, and in the case, the Petition is presented by a body corporate, by a Director, Secretary or other Principal Officer thereof. Rule 21 further provides that such Affidavit shall be filed along with the Company Petition and shall be in Form No.3.

Proviso to Rule 21 lays down 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.

Therefore, in view of the said Rule 21, it is necessary that the Company Petition must be verified by an Affidavit, which is to be in Form No.3. The Affidavit is to be made by such person as is mentioned in the said Rule 21. The Affidavit is required to be filed along with the Company Petition.

Thus, the Affidavit verifying the Company Petition is required to be in Form No.3. However, as held above, what is required is substantial compliance with the said Form No.3, and not literal compliance. Whether there has been substantial compliance with Form No.3, will depend on the facts and circumstances of each case and the nature of proceedings in question.

The said conclusion is supported by the decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra).

It was laid down by the Bombay High Court as follows (at page 681 of the said Company Cases) :

"................................................... ........................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition."

It was further held as under (at page 682 of the said Company Cases):

".................................................. This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition."

Thus, in Suvran Rajaram Bandekar case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen whether it can be fatal to the Petition.

The said decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR case (supra) was followed by the Gujarat High Court in DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj) (at pages 471- 472).

Keeping in view the above legal position, let us consider the present case.

As noted above, the present Company Petition is a Petition, inter-alia, praying for winding up the Respondent-Company. An Affidavit, sworn on 6th September, 2002 by Santosh John, has been filed in support of the Company Petition.

The question is as to whether the said Affidavit filed in support of the Company Petition substantially complied with the requirements of Form No.3 prescribed in Appendix I to the Companies (Court) Rules, 1959.

In order to consider this question, it is necessary to reproduce the relevant portion of the said Affidavit of Santosh John, which is as follows :

"IN THE MATTER OF :-

M/s Paharpur Cooling Towers Ltd. ... Petitioner

Versus

M/s Anuradha Masala, Udhyog Pvt. Ltd. ...... Respondent

AFFIDAVIT

I, Santosh John, S/o Sh. C.V. Yohannan, Age about 29 years, working as an Officer with the plaintiff Company, do hereby solemnly affirm and declare as under:

1.That I am working as an Officer in the aforesaid company and as such am well conversant with the facts of the present case and able to depose about the same.

2.That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433 (e) read with Section 434 (1) (a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief.

Sd.

DEPONENT

VERIFICATION

Verified at New Delhi on this 6 day of Sept, 2002 that the contents of para 1 and 2 of the above affidavit are true and correct to my knowledge. No part of it is incorrect and nothing material has been concealed therefrom."

As is evident from the submissions made by the learned counsel for the parties, it is not disputed by the Respondent-Company that Santosh John, who has sworn the said Affidavit in support of the Company Petition, is an authorized person.

The dispute is in regard to paragraph 2 of the said Affidavit wherein the contents of the Company Petition have been verified.

Paragraph 2 of the Affidavit given in Form No.3, contained in Appendix I to the Companies (Court) Rules, 1959, inter-alia, requires that it should be stated that "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."

Therefore, in view of paragraph 2 of the Affidavit given in Form No.3, the verification of the Company Petition must be done by specifying paragraphs of the Company Petition. There should be specification as to which paragraphs of the Company Petition are true to the knowledge of the deponent and as to which paragraphs of the Company Petition are based on information.

In the present case, paragraph 2 of the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, reads as follows :

"That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433(e) read with Section 434 (1)(a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief."

Therefore, in paragraph 2 of the said Affidavit, sworn by Santosh John, there is no mention of paragraph numbers of the Company Petition. There is no specification of paragraph numbers, which are true to the knowledge of the said Santosh John, nor is there any specification of paragraph numbers, which are based on information.

There is merely general verification of the contents of the Company Petition without any mention of even paragraph numbers of the Company Petition. Further, the contents of the Company Petition have been stated to be "true and correct to my knowledge and belief". There is no separate specification of the paragraph numbers which are true to the knowledge of the said Santosh John and the paragraph numbers, which are based on information.

In my opinion, such verification of the contents of the Company Petition cannot be said to be substantial compliance of the requirements of the Affidavit as prescribed in Form No.3 contained in Appendix I to the Companies (Court) Rules, 1959.

The said Affidavit of Santosh John filed in support of the Company Petition, therefore, does not substantially comply with the requirements of Form No.3 given in Appendix I to the Companies (Court) Rules, 1959. The said Affidavit of Santosh John is evidently a defective Affidavit.

The said conclusion is supported by various judicial decisions.

In PADMABATI DASI Vs. RASIK LAL DHAR, (1910) I.L.R. 37 Cal. 259, a Division Bench of the Calcutta High Court consisting of Jenkins, C.J. and Woodroffe J. held as under (at page 261 of the said I.L.R.) :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order XIX, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it would be safe to act on the deponent's belief."

(Emphasis supplied)

The above observations of the Calcutta High Court were endorsed by their Lordships of the Supreme Court in State of Bombay Vs. Purushottam Jog Naik[1952] INSC 35; , A.I.R. 1952 SC 317.

Their Lordships of the Supreme Court observed as follows (paragraph 16 of the said A.I.R.) :

"(16) We wish, however, to observe that the verification of the affidavits produced here is defective. The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally. The verification however states that everything was true to the best of his information and belief. We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit. Verification should invariably be modelled on the lines of Order 19, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not. And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed. We draw attention to the remarks of Jenkins C.J. and Woodroffe J. in PADMABATI DASI v. RASIK LAL DHAR, 37 Cal 259 and endorse the learned Judges' observations."

(Emphasis supplied)

In Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406, it was held as under (paragraphs 16 and 17 of the said A.I.R.) :

"(16) Order19, Rule 3 (1) of the Code of Civil Procedure requires :

"Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated"

In no affidavit has the petitioner said which part was based on information and which on belief. Nowhere he has divulged the source of his information or the grounds of his belief. Where the matter deposed to is not based on personal knowledge but on information, the sources of information ought to be clearly disclosed. The petitioner's several affidavits infringe the provisions of Order 19, Rule 3, when they should have been strictly observed. Such affidavits being violative of the requirements of the mandatory provisions of law, deserve to be ignored. The words that the contents of the affidavit "are true and correct to the best of my knowledge and belief" carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless."

"(17) In Padmabati Dasi v. Rasik Lal Dhar (1910) ILR 37 Cal. 259, Jenkins C.J. and Woodroffe J. observed :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, Rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to Judge whether it would be safe to act on the deponent's belief."

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is a catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Naein Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy, AIR 1956 Cal 496 and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101"

(Emphasis supplied)

In view of the above legal position, it is evident that the said Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition is a defective Affidavit.

As the said Affidavit filed in support of the Company Petition has been held to be defective, let us now consider Question No.2, namely, as to whether the petitioner should be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Before proceeding to consider this question, it is necessary to consider the submission made by the learned counsel for the Respondent-Company that the Petitioner-Company has taken contradictory stand. It is submitted that on the one hand, the Petitioner-Company maintains that the Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition substantially complied with all the requirements of Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company has sought permission / opportunity to file a fresh Affidavit in Form No.3, being the Affidavit, sworn by Santosh John on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Having considered the said submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

It is open to the Petitioner-Company to take alternative pleas.

The First Plea of the Petitioner-Company is that the Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition, was not defective, as there was substantial compliance with the requirements of Form No.3.

The Second Plea of the Petitioner-Company, in the alternative, is that if the said Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition, is held to be defective, then the Petitioner-Company be permitted to bring on record the said fresh Affidavit, sworn on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

In my opinion, it is open to the Petitioner-Company to take alternative pleas, as mentioned above. There is no question of any contradictory stand being taken by the Petitioner-Company, as submitted by the learned counsel for the Respondent-Company.

Coming now to the aforementioned Question No.2, it is necessary to examine the legal position as emerging from various decisions cited by the learned counsel for the parties.

In Gaya Textiles case, AIR 1968 Cal 388 (supra), the Winding up Petition was not verified by an Affidavit but by a declaration made before a Notary Public at Bombay on December 24, 1965.

The Calcutta High Court held that the verification was defective. It was further held that leave to re-verification of the Winding up Petition could not be granted as the same would lead to various complications, as mentioned in the decision.

The relevant portion of the said decision of the Calcutta High Court is reproduced below (paragraphs 6, 11 and 12 of the said AIR) :

"(6) Learned counsel for the petitioner however, contended that the defect in the verification of the petition was a mere irregularity which should be overlooked, and leave should be granted to the petitioner to re-verify the petition according to the rules. In support of this contention, learned counsel for the petitioner firstly relied upon a decision of the Allahabad High Court reported in AIR 1925 All 79 in which it was held that a plaint was not void merely because it did not contain the verification clause as required by the Code and that the omission to verify was a mere irregularity which could be cured even at a later stage and such a plaint therefore, should be deemed to be presented on the date of actual presentation and not on the date of its verification. It was also held that merely on the ground of such defect the plaint could not be treated as altogether invalid. This case, to my mind, has no application as I am not concerned with a defective verification of a plant, but with the verification of a winding up petition to which entirely different considerations apply. Besides, it cannot be overlooked that allegations in the plaint can be acted upon only upon proof of the same by evidence or upon admission by the defendant. The allegations in a petition, on the other hand, are to be treated by the Court as evidence without any further proof.

(11) Had this not been a petition for winding up a Company, I would have already accepted the contentions of the learned counsel for the petitioner. But it cannot be overlooked that the present petition is a petition for winding up of a Company and a winding up order relates back to the date of the presentation of the winding up petition. If on the date when the petition was presented there was no proper verification according to law, then there was no petition at all on which the Court could issue directions for advertisement. Secondly, if leave is granted to cure the verification today, then a proper petition for winding up of the Company would come into existence as from today, and in that event the question of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when the Court grants the Company leave to re-verify the petition would also create a good deal of confusion. Since a winding up order relates back to the date of presentation of the winding up petition, all dealings by the Company with its assets would be subject to the rules relating to fraudulent preference and transactions are liable to be set-aside on the ground that the Company had unlawfully dealt with its assets in order to deprive its creditors. But if leave is granted to the petitioner to cure the defect in the verification by allowing re-verification of the petition according to the rules today, it would be open to the Company to contend, if a winding up order is made, that the rules relating to fraudulent preference or unlawful dealing with the assets from the date of presentation of the winding up petition would not apply, as a petition properly verified according to law came into existence only on the date on which leave was granted to the petitioner to re-verify the petition.

(12). There is, however, another matter to be considered in connection with the defective verification of a winding up petition. In the event of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when a valid petition comes into existence after re-verification of the same, third parties may acquire rights in the Company's assets, which, it will be difficult to assail or set aside. For these reasons, verification of a winding up petition must strictly comply with the rules for verification of the same. The petition with which I am concerned in this application being a petition for winding up of a Company the principles discussed in the several decisions cited by the learned counsel for the petitioner are not attracted and do not assist the petitioner. Counsel for the petitioner admitted, and I think rightly, that the verification was defective and the Court could not make an order for winding up on this petition, and it was for that reason that he asked for leave to re-verify the petition. That being the position, in my opinion, re-verification of a winding up petition cannot be allowed, particularly because in this case the verification appears to have been done before a notary public, who under the rules is not an officer before whom a petition could be verified under the rules of this Court as also under the Companies (Court) Rules, 1959. For the reasons mentioned above, the Court cannot proceed to make an order on the present petition nor can the Court give leave to the petitioner to re-verify the petition in conformity with the rules. In the circumstances, this application is dismissed with costs. Certified for counsel."

(Emphasis supplied)

In Mool Chand Wahi case, [1986] 60 Company Cases 198 (P & H) (supra), the Winding up Petition was accompanied by an Affidavit. In the verification clause of the Affidavit, paragraphs 1 to 14 of the Affidavit were shown to have been "true and correct to the best of the deponent's knowledge and belief". There was no delineation as to which paragraphs of the Affidavit were correct to the best of his knowledge and which paragraphs of the Affidavit were correct to the best of his belief.

The learned Single Judge of the Punjab and Haryana High Court referred to the provisions of Rules 11 (a), 18 and 21 of the Companies (Court) Rules, 1959 and the provisions of Order 19, Rule 3 of the Code of Civil Procedure as also the decision of the Punjab & Haryana High Court in Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406 (supra).

It was concluded that the verification of the Affidavit, filed in support of the Company Petition, was not proper, and as such, the Winding up Petition was liable to be dismissed on the ground that it was not accompanied by a proper Affidavit.

The learned Single Judge of the Punjab and Haryana High Court pointed out that in case a properly sworn Affidavit was allowed to be filed subsequently, the same would lead to a great deal of confusion regarding the rights of the third parties. Reliance was placed on the decision of the Calcutta High Court in Gaya Textiles case (supra).

The relevant portions of the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) are reproduced below (at pages 201, 202 and 203 of the said Company Cases) :

"I have duly considered the argument of the learned counsel. Rule 11 (a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned at Serial No. 15 in the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Paragraph 2 of the Form reads as follows :

"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."

Rule 18 says that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code or by the rules and practice of the court. Order 19, rule 3 of the Code of Civil Procedure says that affidavits shall be confined to such facts as the deponent is able to prove from his own knowledge except on interlocutory applications, on which statements of his belief may be admitted. From the aforesaid rules, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form. It is well settled that if an affidavit is not in due form, no value can be attached to it. In the above view, I am fortified by the observations in Bhupinder Singh's case, AIR 1968 P & H 406, wherein Tek Chand J., after noticing Order 19, rule 3(1) of the Code, observed as follows (p.410) :

"The words that the contents of the affidavit '' are true and correct to the best of my knowledge and belief' carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless".

In Padmabati Dasi v. Rasik Lal Dhar [1910] ILR 37 Cal 259, Jenkins C.J. and Woodroffee J. observed :

''We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.'

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Nalin Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy Singha, AIR 1956 Cal 496, and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101."

The learned Judge, in view of the fact that the verification of the affidavit was not proper, ignored the affidavit filed by the petitioner in that case. In a petition for winding-up, it is mandatory to file an affidavit along with the petition. The purpose of the affidavit is that the allegations in the affidavit read with the petition are treated as substantive evidence. In case the petition is not accompanied by an affidavit, in view of the rules mentioned above, it is no petition in the eye of law and consequently it is liable to be dismissed on this ground alone. The main reason is that the petition for winding-up, if accepted, relates back to the date of its presentation. In case a properly sworn affidavit is allowed to be filed subsequently, the question will arise as to whether the winding-up petition would relate back to the date of presentation of the petition or the affidavit and in many cases a great deal of confusion regarding the rights of the third parties would crop up. In that regard, the following observations in Gaya Textiles P. Ltd., In re, AIR 1968 Cal 388, be read with advantage (pp.390, 391):

..............................................................."

(Emphasis supplied)

Having laid down the above proposition, the learned Single Judge of the Punjab & Haryana High Court dismissed the Winding up Petition on the ground that it was not accompanied by a proper Affidavit.

Against the said decision of the learned Single Judge of the Punjab & Haryana High Court, Company Appeal under Section 483 of the Companies Act, 1956 was filed before the said High Court.

A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal by its decision reported in Mool Chand Wahi Vs. National Paints (Pvt.) Ltd. and another, [1986] 60 Company Cases 402 (P & H) (supra) .

The Division Bench of the Punjab & Haryana High Court rejected the submission made on behalf of the Petitioner-Appellant that he should have been allowed to file a fresh Affidavit in support of the Company Petition, and upheld the said decision of the learned Single Judge of the Punjab & Haryana High Court. The Division Bench of the Punjab & Haryana High Court held as under (at Pages 403- 404 of the said Company Cases) :

"........................................................ The Company Petition was accompanied by an affidavit dated February 20, 1980, which was not in proper form. In its verification clause, paras 1 to 14 of the affidavit were mentioned to have been true and correct to the best of the deponent's knowledge and belief. The appellant in accordance with law was required to specify which paragraphs of the affidavit were correct to the best of his knowledge and which were correct to his belief. Rule 11(a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned in sub-rule (15) of the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in form No.3, which, in turn, prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Rule 18 lays down that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code of Civil Procedure (hereinafter called "the Code") or by the rules and practice of the court. Order XIX, rule 3 of the Code lays down the matters to which the affidavit shall be confined. Mr. Ratta also admits that where a petition for winding up is not supported by an affidavit, the same is liable to be dismissed.

He, however, submits that the verification of an affidavit is a matter of form and he should have been allowed to file a fresh affidavit and the petition should not have been dismissed for want of proper verification of the affidavit. He placed reliance on Manohar Narayan Joshi v. Ramu Mhatang Patel, AIR 1973 Bom.105.

We do not find any force in this contention. Going through the judgment of the learned Single Judge, we find that the law on the point has been elaborately discussed and as a result an imperative conclusion has been reached that the petition has had to be dismissed as it was not accompanied by a proper affidavit. An affidavit which is not in due form is of no value. An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. The learned Single Judge rightly rejected the appellant's prayer to file a fresh affidavit properly sworn in for the reason that if the amendment of a petition for winding up is allowed, it relates back to the date of its presentation. It would lead to a great deal of confusion if the appellant is allowed to swear in and supply a fresh affidavit at a late stage because rights of third parties would crop up.

Manohar Narayan Joshi's case, AIR 1973 Bom 105, was rightly distinguished by the learned Single Judge as it adjudicated on the question whether or not a petitioner in an election petition under the Representation of the People Act should be allowed to amend the affidavit accompanying it. An affidavit in support of an election petition is not intended to be treated as evidence of the facts stated therein because it is ultimately to be decided on the evidence recorded by the High Court."

(Emphasis supplied)

In Malhotra Steel Syndicate case, [1989] 65 Company Cases 546 (P. & H.) (supra), a learned Single Judge of the Punjab and Haryana High Court was dealing with the submission made by the learned counsel for the Respondent-Company that the Affidavit filed in support of the Winding up Petition was not in conformity with Rule 21 of the Companies (Court) Rules, 1959 and Form No.3 contained in Appendix I to the said Rules.

The learned counsel for the Respondent-Company placed reliance on the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra).

The learned Single Judge in Malhotra Steel Syndicate case (supra), expressed doubts about the correctness of the observations made by the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), but declined to refer the matter to a Larger Bench as the learned Single Judge was not satisfied on the merits of the Winding up Petition.

On merits of the case in Malhotra Steel Syndicate case (supra), the learned Single Judge was of the view that in view of the material placed before the Court, it was prima-facie established that the debt was bona fide disputed by the Respondent-Company. Therefore, the learned Single Judge dismissed the Winding up Petition and relegated the Petitioner-Company to a civil Suit.

The relevant portions of the decision of the learned Single Judge in Malhotra Steel Syndicate case (supra) are reproduced below (at pages 550 - 552 of the said Company Cases) :

"Mr. Bhagirath Dass, who appeared for the respondent, submitted that the affidavit filed in support of the petition is not in conformity with rule 21 of the Companies (Court) Rules, 1959. Rule 21 enjoins that every petition shall be verified by an affidavit and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 provides that the statement made in various paragraphs of the petition has either to be verified as true to knowledge or on information received or on information which is believed to be true. Since the affidavit filed in support of the petition is not in conformity with Rule 21 of the Companies (Court) Rules, the petition is liable to be rejected on this score alone. Learned counsel relied upon a Division Bench decision of this court in Mool Cihand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 198. Before the Bench, learned counsel for the Petitioner Company conceded that where a petition for winding up is not accompanied by an affidavit, the same is liable to be dismissed. On the basis of that concession, the Bench held that an affidavit, which is not in due form, is of no value and the company petition, which is to be accompanied by the affidavit, will be no petition in the eyes of law.

Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not "evidence" within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my lord the Chief Justice for referring the case to a larger Bench for reconsideration of the judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (Private) Ltd. [1986] 60 Comp Cas. 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case.

In Amalgamated Commercial Traders (P.) Ltd. v. Krishnaswami (A.C.K.) [1965] 35 Comp Cas 456, 463, 464 (SC), the Supreme Court quoted with approval the following passage from Buckley on the Companies Acts, 13th edition, page 451) : "It is well settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under certain circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time, petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the court may decide it on the petition and make the order................If the debt was bona fide disputed, as we hold it was, there cannot be ''neglect to pay' within section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the ground of winding-up, namely, that the company is unable to pay its debts is not substantiated".

This passage has been quoted with approval in the subsequent decisions of the apex court. The law has been succinctly stated in this paragraph and if the company court comes to the conclusion that the debt is bona fide disputed by the company, against whom the winding up petition has been filed, the petitioner has to be relegated to a civil suit and a winding up petition will not be the appropriate remedy.

The respondent-company has placed material before this court and it prima facie establishes that the debt is bona fide disputed.

The duplicate copy of the bill, which is placed on record by the respondent company evidencing receipt of the goods in dispute, does not bear the signatures of Mr. K.S. Rupal who purports to have signed the original bill dated August 7, 1984. The original bill placed on record by the petitioner bears the signature of Mr. K.S. Rupal. The photocopy of the cheque issued to cover price of the goods, which was dishonoured, is signed only by Shri S.S. Sandu, executive director of the company. The respondent company has denied that Shri S.S. Sandhu was authorised to issue the cheque for and on behalf of the company.

The petitioner filed a rejoinder to the written statement and in Para No.4 thereof took the plea that hundreds of cheques issued prior to and subsequent to the date of the issuance of the cheque to the petitioner on August 7, 1984, were signed by Sri S.S. Sandhu and were honoured by the bankers. The verification of the rejoinder reveals that the facts mentioned in Para No.4 of the replication are true and correct to the best of knowledge of the deponent derived from the record and information received and believed to be correct. It is not stated as to from which source the petitioner-company acquired the knowledge that Shri S.S. Sandhu was competent to issue the cheque for and on behalf of the company. It was imperative for the petitioner to specifically disclose the source of information which was believed by him to be correct. Even if the plea was correct, the petitioner could obtain a certificate from the banker who had honoured the cheques issued for and on behalf of the respondent company by Shri S.S. Sandhu. No such document has been placed on record. The receipt of goods is denied by the respondent and no material has been placed before this court to vouchsafe the assertions of the petitioner that the goods had been supplied.

The petitioner has to prove the allegations made by it in the petition by leading positive evidence and this could be done only in a civil suit. The respondent company has prima facie established that the debt is bona fide disputed by it".

(Emphasis supplied)

It further appears that against the said decision of the learned Single Judge in Malhotra Steel Syndicate case (supra), a Company Appeal was filed. A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal on the short ground that the Affidavit filed in support of the Winding up Petition was not in proper form and that the Winding up Petition could not be entertained.

Against the said decision of the Punjab and Haryana High Court, Special Leave Petition, being S.L.P. (Civil) No. 19170 of 1991, was filed before the Supreme Court, and the said Special Leave Petition gave rise to Civil Appeal No. 2587 of 1992.

The said Civil Appeal was decided by the Supreme Court by its decision reported in Malhotra Steel Syndicate V. Punjab Chemi Plants Ltd., 1993 Supp. (3) SCC 565 (supra).

The relevant portion of the said decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is quoted below:

"1. Leave granted.

2.We have heard both the counsel. We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding-up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

3. We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991.

4. In the result, the Company appeal will stand revived before the Division Bench for disposal on merits.

5. The appeal is allowed accordingly. There will be no order as to costs."

(Emphasis supplied)

It may be mentioned that pursuant to the remand by the Supreme Court by its aforementioned decision in Malhotra Steel Syndicate case (supra), a Division Bench of the Punjab & Haryana High Court considered the Company Appeal on merits, and dismissed the same by its decision reported in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., [1996] 85 Company Cases 586 (Punjab & Haryana).

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate Bank case (supra) shows that the following principles, amongst others, may be deduced from the said decision :

(1)While considering the validity of the Form and Verification of the Affidavit filed in support of the Company Petition, a proper and liberal construction should be adopted. In other words, what is required is that the Affidavit has substantially complied with the Form and Verification as provided in the Companies (Court) Rules, 1959.

(2)Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity.

(3)In case there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same.

Hence, in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra), if an Affidavit filed in support of the Winding up Petition suffers from any defect or irregularity, opportunity should be given to rectify the same. Therefore, in such a situation, the Petitioner-Company may be permitted to file a fresh Affidavit in support of the Winding up Petition.

The above legal principles deduced from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), are the law declared by the Supreme Court, and are binding on all the Courts in the country in view of Article 141 of the Constitution of India.

Therefore, with deep respect for the learned Judges, I am of the opinion that the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) in-so-far as, the said decisions have laid down that in case verification of the Winding up Petition by Affidavit filed in support of the Winding up Petition, is defective, the Winding up Petition is liable to be dismissed, and no opportunity to re-verify the Winding up Petition by filing fresh Affidavit can be given, are no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

For the same reason, the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra), wherein the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), was relied upon, is also no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

As regards the complications pointed out by the Calcutta High Court in its decision in Gaya Textiles case (supra) and by the learned Single Judge of the Punjab and Haryana High Court in his decision in Mool Chand Wahi case (supra), I am of the opinion that in case, the Affidavit, filed in support of the Winding up Petition, is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

In view of this, various complications pointed out in the said decision of the Calcutta High Court and the said decision of the learned Single Judge of the Punjab and Haryana High Court, would not arise.

As regards the submission made by the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) should be confined only to "slight defect or irregularity", I find myself unable to accept the said submission. The expression "slight defect or irregularity" occuring in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is in the context of the facts of the said case. However, the ratio of the said decision is that if the Affidavit filed in support of the Winding up Petition is defective, the same is merely an irregularity, and can be cured by giving opportunity to the Petitioner to rectify the same.

Keeping in view the above legal position, let us consider the facts of the present case. As noted above, an Affidavit, sworn by Santosh John on 6th September, 2002, was filed in support of the Company Petition. The said Affidavit, as held in Question No.1 above, is defective.

Another affidavit, sworn by Santosh John on 13th April, 2004, was filed in Form No.3 as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit. It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit.

As the Affidavit, sworn on 6th September, 2002, originally filed in support of the Company Petition, has been held to be defective, I am of the opinion that the prayer made in the said Company Application (Paper No. A-10) on behalf of the Petitioner-Company be granted, and the Petitioner-Company be permitted to bring on record the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit, and the said Affidavit, sworn on 13th April, 2004, be read as being the Affidavit in support of the Company Petition.

It is relevant to note that the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Private Limited case (supra), by the Andhra Pradesh High Court in D & H Secheron Electrodes case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In DLF Industries Ltd. case (supra), the Winding up Petition was supported by an Affidavit affirmed in Delhi before a Notary on July 7, 1997.

An objection was raised by the Respondent-Company that the Affidavit filed in support of the Winding up Petition was defective. It was submitted that the person affirming the Affidavit did not state that he was a Principal Officer of the Company. The Affidavit did not refer to ''this' particular Petition as being affirmed and also that it was not in Form No.3 as required by Rules 18 and 21 of the Companies (Court) Rules, 1959.

In view of the said objection raised by the Respondent-Company, the petitioner filed another Affidavit affirming this very Petition, which was affirmed on October 23, 1997 before a Notary in Faridabad. This Affidavit stated that the deponent was the Managing Director of the Petitioner-Company. He was shown the Petition and he affirmed that paragraphs 1 to 10 were true to his knowledge and the statements made in paragraphs 11 and 12 were based on his information which he believed to be true.

The Gujarat High Court held that the First Affidavit itself could not be said to be in any way materially defective requiring the rejection of the Winding up Petition. That apart, assuming that there was any defect in the First Affidavit, the same was cured in the Second Affidavit. Such a course of action was permissible.

The Gujarat High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), and concluded that the Winding up Petition could not be rejected on the ground of the Affidavit filed in support of the Winding up Petition being defective.

Relevant portion of the said decision of the Gujarat High Court in DLF Industries case (supra) is quoted below (at pages 471, 472 and 473 of the said Company Cases) :

"Mr. Nanavati, learned counsel for the respondent, submits that this affidavit is affirmed in Delhi before a notary on July 7, 1997. The petition is not mentioned to be the one annexed at Annexure A thereto. Paragraph No. 2 of the affidavit states that the petitioner has filed the petition "this day" whereas the petition has come to be filed on July 8, 1997. Mr. Nanavati, therefore, submits that it is difficult to say that this affidavit is affirmed with respect to this very petition. Mr. Nanavati has principally relied upon the judgment of the Punjab High Court, first of all of a single Judge in the case of Mool Chand Wahi v. National Paints P. Ltd.[1986] 60 Comp Cas 198 (P & H) which is confirmed by the Division Bench of that court in Mool Chand Wahi. v. National Paints P. Ltd. [1986] 60 Comp. Cas 402. In that judgment the single Judge as well as the Division Bench have held that from Rules 11, 18 and 21 of the Companies (Court) Rules, 1959, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form and if it is not so, no value can be attached to it. The judgment holds that the affidavit is to be filed so that the contents of the petition are treated as evidence and in the absence of the affidavit being in the exact form, that cannot be permitted. The judgment also holds that a subsequent correction of the affidavit is not permissible.

As against that, Mr. Seth, learned counsel for the petitioner, relied upon the judgment of a single Judge of the Bombay High Court (G.D. Kamat, J. as he then was) in Bandekar (S.R.) v. Rajaram Bandekar [1997] 88 Comp Cas 673 (Bom) where the learned Judge held that the importance of verification is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered." (page 682).

In view of the objection raised by the respondent, the petitioner filed another affidavit affirming this very petition, which is affirmed by one Shri Ranjit Singh Cheema on October 23, 1997, before a notary in Faridabad. This affidavit states that the deponent is the managing director of the petitioner-company. He is shown the petition and he has affirmed that paragraphs Nos. 1 to 10 are true to his knowledge and the statements made in paragraphs 11 and 12 are based on his information which he believed to be true.

Now, if we look to the first affidavit, referred to above, the deponent has disclosed his high position in the company. He has also made a statement on oath with respect to the contents of the petition and its annexures as required by law. In my view, the first affidavit itself cannot be said to be in any way materially defective requiring the rejection of the petition.

The observations of Kamat J. quoted above aptly apply in the present case. That apart, assuming that there is any defect in the first affidavit, the same is cured in the second affidavit. Such a course of action is permitted by a Division Bench of the Bombay High Court in the case of Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 (Bom), which is binding precedent for this court. Now, on this aspect, the Hon'ble Supreme Court has indicated as to what approach should be adopted in such a controversy in the case of Malhotra Steel Syndicate v. Punjab Chemi-plants Ltd. [1993] 3 SCC (Supp) 565. It is a short order but it indicates what approach the court should have. It reads as follows :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit the appellant should have been given an opportunity to rectify the same." (Underlining supplied).

In this view of the matter, as far as the first submission of Mr. Nanavati is concerned, it is difficult to accept the same and the petition cannot be rejected solely on this ground. I have examined this submission in spite of the fact that this plea has not specifically been taken in the reply. In fact, it is the petitioner who has contended that Shri K.M. Patel who has affirmed the reply for the respondent is not the principal officer and therefore his reply may not be looked into. As far as this aspect is concerned, another affidavit has subsequently been filed by the respondent placing on record that Shri K.M. Patel is a senior officer of the respondent-company authorised to swear the affidavit in reply. Hence I am not prepared to accept this objection to the affidavit of Shri Patel also."

(Emphasis supplied)

In Welding Rods Private Ltd. case (supra), the original verification read as under :

"Affidavit I, S.L. Jain, authorised signatory of the petitioner-company, do hereby solemnly affirm and State on oath that what is stated in the foregoing petition is true to my knowledge, information and belief and I believe the same to be true.

Solemnly affirmed at Mumbai on this 10th day of July, 2000.

For Indo Borax and Chemicals Ltd.

(Sd. ) Deponent."

A preliminary objection was raised that the affidavit filed in support of the Winding up Petition was not an Affidavit in the eyes of law or in accordance with Rule 21 of the Companies (Court) Rules, 1959.

The learned Single Judge of the Gujarat High Court came to the conclusion that the irregularity in the verification of the Affidavit and want of signature below the Petition and above the verification were irregularities which were required to be permitted to be cured. The learned Single Judge accordingly afforded an opportunity to the Petitioner-Company to sign the Petition and remove all technical objections within a period of 15 days from the date of the order. The Petitioner-Company availed of the said opportunity by filing the Affidavit as per Form No. 3.

Against the decision of the learned Single Judge rejecting the above preliminary objection as well as other preliminary objections raised on behalf of the respondent, a Company Appeal was filed.

A Division Bench of the Gujarat High Court dismissed the said Company Appeal.

As regards the preliminary objection regarding the defect in the verification of the Affidavit, the Division Bench of the Gujarat High Court held that there was no infirmity in the order of the learned Single Judge permitting the Petitioner-Company to rectify the defect in the verification of the Affidavit filed with the Company Petition.

It was further held by the Division Bench that the effect of permitting such rectification was, inter-alia, to relate it back to the original date of filing of the Winding up Petition.

It was further held by the Division Bench that in view of the pronouncement of the Supreme Court in Malhotra Steel Syndicate case (supra), the decisions of the learned Single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) must be treated as having been impliedly overruled.

The Division Bench, however, emphasised that the Court would not permit the rectification of the defect in a Winding up Petition just as a matter of course, but would take into account all the relevant circumstances including the conduct of the parties.

Relevant portion of the said decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra) is quoted below (at pages 767, 768 and 769 of the said Company cases) :

"We find considerable substance in the contention of Mr. Vakil for the petitioning-creditor. The preponderance of judicial authority is that the defect in the form of verification or affidavit is only a technical irregularity and that an opportunity should be given to the concerned party to cure such defect. The inherent powers of the court saved by Rule 9 of the Companies (Court) Rules, can certainly be invoked in such cases. Rule 9 reads as under :

"9. Inherent powers of court.-Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court."

In Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1989] 65 Comp Cas 546 (P & H), Justice Majithia referred to the Division Bench judgment of the Punjab and Haryana High Court in Mool Chand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 402 and made the following observations (page 550 of 65 Comp Cas):

"Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not ''evidence' within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my Lord the Chief Justice for referring the case to a larger Bench for reconsideration of the Judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (P) Ltd. [1986] 60 Comp Cas 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case."

The aforesaid decision was ultimately carried before the Supreme Court and in the decision reported in Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] 3 (Suppl.) SCC 565, the Supreme Court passed the following order :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991." (emphasis supplied)

With this pronouncement, the decisions of the learned single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi's case [1986] 60 Comp Cas 402 must be treated as having been impliedly overruled.

Following the aforesaid Supreme Court decision, this court has also held in DLF Industries Ltd.'s case [1999] 2 Comp LJ 310 (Guj); [2001] 103 Comp Cas 467 that the importance of verification in an affidavit in Form No.3 under Rule 21 of the Companies (Court) Rules, 1959, is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered."

In Mrs. Roma Deb v. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Cas 350, speaking for the Delhi High Court Hon'ble Mr. Justice D.P. Wadhwa (as His Lordship then was) also expressed the same view that the court can, in its inherent powers, allow the petitioners to present an affidavit in support of the petition in terms of the prescribed rules and forms, if the affidavit originally filed with the petition does not conform to them. Of course, this the court would do in the ends of justice ; and if the circumstances of the case require.

...............................................

.......................................................

As regards the contention of Mr. Ashwin Lalbhai that even if a fresh affidavit with proper verification in accordance with Rule 3 was permissible, the winding up petition can be said to have been instituted on the date on which such fresh affidavit is filed, we are unable to accept this contention for the reasons which were also commended by the Delhi High Court in the aforesaid case of Mrs. Roma Deb vs. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Case 350 wherein Hon'ble Mr. Justice D.P. Wadhwa observed that the 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 of filing, this can be permitted in the ends of justice; and the court will see if any prejudice is being caused to the other party which may be compensated by costs or otherwise. A balance has to be struck between two warning 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 cannot be rectified. The court is not helpless in a case where the affidavit verifying the petition is not in the prescribed form. 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 could be cured at any stage of the suit. The court will not, however, permit the rectification of the defect in a winding up petition just as a matter of course ; but would take into account all the relevant circumstances including the conduct of the parties.

(Emphasis supplied)

In the instant case, we do not find any infirmity in the order of the learned Company Judge permitting the petitioning-creditor to rectify the defect in the verification on affidavit filed with the company petition. The effect of permitting such rectification is, inter-alia, to relate it back to the original date of filing of the winding up petition and this has been permitted in the interests of justice. No prejudice is caused to the appellant-company by such permission granted by the learned Company Judge."

(Emphasis supplied)

I am in respectful agreement with the above decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra).

In D & H SECHERON ELECTRODES (P.) LTD. VS. VOLTARE ELECTRODES (P.) LTD., [1997] 89 Company Cases 592 (Andhra Pradesh) (supra), the Affidavit filed in support of the Winding up Petition was verified by a C.K. Padmanabhan, who was neither a Director nor a Principal Officer of the Petitioner-Company, but was Administrative Officer of the Petitioner-Company. A preliminary objection was raised that the Company Petition was not maintainable under the proviso to Rule 21 of the Companies (Court) Rules, 1959, as it was not filed by a validly constituted attorney. In view of the preliminary objection, the Petitioner filed an application seeking leave of the Court under the proviso to Rule 21 to permit C.K. Padmanabhan to make and file the Affidavit in the Winding up Petition. Along with the Affidavit, he filed true copy of the resolution passed by the Board of Directors authorizing C.K. Padmanabhan to sign and file the Winding up Petition against the Respondent-Company and to sign necessary papers as may be required for this purpose.

The Andhra Pradesh High Court held that no doubt, the Petition, as filed, was defective in the absence of obtaining leave of the Court to accept the Affidavit of Padmanabhan, but the same was rectified by filing the Affidavit accompanied by a true copy of the resolution of the Board. The Andhra Pradesh High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

The relevant portion of the judgment of the Andhra High Court is reproduced below (at pages 595, 596 and 597 of the said Company Cases) :

" .................... During the hearing of the arguments, the respondent-company raised a preliminary objection that the company petition is not maintainable under the proviso to rule 21 of the Companies (Court) Rules, 1959 (for short "the Rules"), as it is not filed by a validly constituted attorney and that Sri C.K. Padmanabhan, who verified the petition, is not authorized to file the company petition. As it is a pure question of law, I permitted the respondent-company to raise this plea even at that late stage. Thereupon the petitioner filed Company Application No. 153 of 1995, seeking leave of the court to permit Sri C.K. Padmanabhan, to sign the affidavit and to file this winding up petition. Hence, the third question for consideration is, whether the company petition filed by Sri C.K. Padmanabhan, on behalf of the respondent-company, is maintainable under rule 21 of the Rules.

Taking the third point first, under rule 21, where any petition is presented by a body corporate, the affidavit must be verified by a director, secretary or other principal officer thereof, provided that the judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the company to make and file the affidavit, Admittedly, in this case, Sri C.K. Padmanabhan, who filed the company petition is neither a director nor a principal officer of the petitioner-company. He is the administrative officer and is described as a duly constituted attorney. In fact, the office ought not to have numbered it, but posted the same for orders of the court. Thus, it is clear that the company petition as filed in 1988 is not in accordance with rule 21. Realising this defect the petitioner filed Company Application No. 153 of 1995 seeking leave of the court under the proviso to rule 21 to permit Mr. C.K. Padmanabhan to make and file the affidavit in the company petition. Along with the affidavit, he filed a true copy of the resolution passed by the board of directors at its meeting at Indore, on September 6, 1988, authorizing Sri C.K. Padmanabhan to sign and file the winding up petition against the respondent-company and to sign necessary papers as may be required for this purpose. It was also stated in the resolution that Sri C.K. Padmanabhan might be given power of attorney by the company. It is not clear whether any power of attorney has been issued. No copy has been filed by the petitioner. Mr. Y. Ratnakar, learned counsel for the petitioner, contends that in view of this resolution of the board authorizing Sri C.K. Padmanabhan, both to sign and file the company petition, leave may be granted by the court regularizing the affidavit filed by Sri C.K. Padmanabhan. Mr. S. Ravi, learned counsel for the respondent, opposed this, contending that the petitioner has not filed the original resolution of the board or the power of attorney, if any, issued in favour of Sri C.K. Padmanabhan, and relied on the decisions in Mohan Lal Mithal v. Universal Wires Ltd., [1983] 53 Comp Cas 36 (Cal) and Nibro Ltd. v. National Insurance Co. Ltd., AIR 1991 Delhi 25 ; [1991] 70 Comp Cas 388.

Mohan Lal Mithal v. Universal Wires Ltd. [1983] 53 Comp Cas 36-(Cal) was a case of filing of an application under sections 397 and 398 of the Act on behalf of a company holding shares in another company and the letter of consent annexed to the petition was not backed by a resolution of the board of directors but was signed by the secretary of the company who claimed that he was directed to do so by a director of the company. It may be seen here that under rule 88 of the Rules in the case of petitions filed under Section 397, the letter of consent signed by the members authorizing the petitioner to present the petition on their behalf, must be annexed to the petition. Interpreting this rule, the single judge of the Calcutta High Court held that as the letter of consent was not backed by the resolution of the board of directors, but was only signed by the secretary of the company, the petition was not maintainable. This decision does not help the respondent-company, as we are concerned here with rule 21.

The next decision is Nibro Ltd. v. National Insurance Co. Ltd.[1991] 70 Comp Cas 388 (Delhi) in which a suit was filed by a director without the necessary resolution in that behalf by the board. The contention of the company was that under Order 29, rule 1 of the Civil Procedure Code, in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any other director or other principal officer of the corporation who is able to depose to the facts of the case. The Delhi High Court rejected the contention of the company and held that the suit is not maintainable under section 291 of the Act read with sections 14, 26 and 28 and Schedule I, Table A. The court held that Order 29, rule 1 of the Civil Procedure Code does not authorise the person mentioned therein to institute suits on behalf of the corporation but only authorises them to sign and verify the pleadings on behalf of the corporation. This decision is also not applicable to the facts of the case.

In Mehta Steel Syndicate [1993] 3 SCC 565 (sic), an objection was taken that the affidavit filed in support of the winding up petition is defective. The High Court had dismissed the petition on that ground. The Supreme Court held that there was no defect and even assuming that there was defect or irregularity, the party must be given opportunity to rectify the same. In the instant case, no doubt, the petition as filed was defective in the absence of obtaining leave of this court to accept the affidavit of Padmanabhan. But the same has been rectified now by filing the affidavit accompanied by a true copy of the resolution of the board. The proviso to rule 21 does not require any power of attorney to be filed. There is no reason to doubt the true copy of the resolution of the board and to throw out the company petition on the technical ground, that too, after seven years after filing the same. I accordingly, overrule the objection raised by the respondent and allow Company Application No. 153 of 1995."

(Emphasis supplied)

In G.K.W. Limited Vs. Shriram Bearings Ltd., [2002] 109 Company Cases 636 (Delhi) (supra), an objection was raised that the Affidavit filed in support of the Winding up Petition was not in accordance with Rule 21 of the Companies (Court) Rule, 1959, and Form No. 3. The Delhi High Court held that the Affidavit was not in accordance with the provisions of Rule 21 of the Companies (Court) Rules, 1959, and Form No. 3. It was further held that a defective verification was only an irregularity in the procedure and would not be a ground for rejecting the Winding up Petition. The defect could be cured at any stage. Opportunity should be given to the petitioner to file a proper Affidavit in accordance with the Rule and the Form prescribed therein.

The Delhi High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) as also on the decision of the Delhi High Court in Mrs. Roma Deb case (supra). The Delhi High Court observed as under (at pages 639 and 640 of the said Company Cases ):

"A combined reading of Form No.3 and rule 21 makes it clear that the person verifying the affidavit has to disclose whether he is director or secretary of the company or an authorised person empowered to sign the affidavit. He has also to indicate which of the paragraphs are true on the basis of information received and believed by him. A perusal of the affidavit filed with this petition by Shri Avinash Chawla shows that he was only an assistant manager of the petitioner-company. He nowhere disclosed how he was competent to verify this affidavit. The mere assertion that he was fully authorised by the petitioner-company to sign and verify the affidavit is not enough to conclude that the affidavit has been signed and verified by a duly authorised person nor can it be said to be in accordance with Form No.3. Mr. Chawla has deposed in the affidavit that he was well acquainted with the facts and circumstances of the case. A reading of para 2 of the affidavit shows that he has not disclosed which of the paragraphs are based on information, derived by him and which were of his personal knowledge. On the contrary a reading of para. No. 2 of the affidavit shows Mr. Chawla verified the facts of the petition on his personal knowledge :

"Para 2. That I have read the accompanying petition and that the facts stated therein are correct and true to my knowledge."

A reading of the petition as a whole shows that all the paragraphs could not be based on his personal knowledge. Some paras. deal with legal submissions, those could not be based on personal knowledge. Similarly, the capital and status of the respondent-company has to be based on knowledge and information derived. For some of the paras of the petition he must have derived the information from official record, therefore, could not have been verified on the basis of his knowledge. Such an affidavit, prima facie, cannot be called in accordance with the provisions of rule 21 and Form No.3.

The question to answer is whether due to such a defective affidavit, the petition is liable to be dismissed? The answer is in the negative. A similar point came up for interpretation before this court in the case of Roma Deb v. R.C. Soad and Co. (P) Ltd. [1987] 2 Comp LJ 174 : [1990] 67 Comp Cas 350. This court, after analyzing rule 21 and other provisions of the Act and Form No.3, came to the conclusion that if the affidavit originally filed with the petition was not as per rule 21 and Form No.3, still the court could in its inherent powers allow the petitioner to present a fresh affidavit in support of his petition in terms of the prescribed rule and form. In that case also the affidavit in support of the petition was found to be defective, inasmuch as it had not been properly verified as required under the rules. It was observed that the court cannot be helpless in a case where the affidavits verifying the petition is not in the prescribed form. A defective verification is only an irregularity in the procedure but will not be a ground for rejecting the petition. That the defect could be cured at any stage of the suit. To the same effect are the observations of the Supreme Court in the case of Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] Suppl. 3 SCC 565. In that case also the affidavit filed in support of the winding up application was found to be defective. The apex court found that the verification did not contain the averments which were required under the rules. Still the apex court held that even if there was slight defect or irregularity in the affidavit the applicant ought to have been given opportunity to rectify the same. The order of the Division Bench dismissing the appeal on the ground of defective affidavit was set aside. Opportunity was given to that petitioner to rectify the defect in the affidavit.

Taking support from the above decisions, it can be said that though there is a defect in the affidavit accompanying the winding up petition still the petition cannot be thrown out. Opportunity has to be afforded to the petitioner to file a proper affidavit in accordance with the rule and the form prescribed therein. Order accordingly," The petitioner is given opportunity to file a fresh affidavit within two weeks from today."

(Emphasis supplied)

The learned counsel for the Respondent-Company, however, submits that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam. It is submitted that there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

The learned counsel for the Respondent-Company further submits that the Respondent-Company can raise the plea of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per incuriam even if the said decision of the Supreme Court has been followed in the above decisions of various High Courts.

In order to appreciate the submissions made by the learned counsel for the Respondent-Company, it is necessary to notice certain decisions, which explain the doctrine of per incuriam and the doctrine of sub-silentio.

In A.R. Antulay Vs. R.S. Nayak and another, A.I.R. 1988 Supreme Court 1531, (1988) 2 SCC 602, their Lordships of the Supreme Court ( majority view) opined as follows (paragraphs 44, 45, 49, 50 and 57 of the said AIR) :

"44. It appears that when this Court gave the aforesaid directions on 16th February, 1984, for the disposal of the case against the appellant by the High Court, the directions were given oblivious of the relevant provisions of law and the decision in Anwar Ali Sarkar's case (AIR 1952 SC75)(supra). See Halsbury's Laws of England, 4th Edn., Vol. 26 page 297, para 578 and page 300, the relevant notes 8, 11 and 15; Dias on Jurisprudence, 5th Edn., pages 128 and 130; Young v. Bristol Aeroplane Co. Ltd., (1944) 2 All ER 293 at P. 300. Also see the observations of Lord Goddard in Moore v. Hewitt (1947) 2 All ER 270 at p. 272-A) and Penny V. Nicholas, (1950) 2 All ER 89, 92A. "Per incuriam" are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account to be demonstrably wrong. See Morelle v. Wakeling, [1955] EWCA Civ 1; (1955) 1 All ER 708, 718F. Also see State of Orissa v. Titaghur Paper Mills Co. Ltd., [1985] INSC 43; (1985) 3 SCR 26 : [1985] INSC 43; (AIR 1985 SC 1293). We are of the opinion that in view of the clear provisions of section 7(2) of the Criminal Law Amendment Act, 1952 and Articles 14 and 21 of the Constitution, these directions were legally wrong.

45. The principle that the size of the Bench - whether it is comprised of two or three or more Judges - does not matter, was enunciated in Young v. Bristol Aeroplance Co. Ltd. (supra) and followed by Justice Chinnappa Reddy in Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, [1984] INSC 208; (1985) 2 SCR 8 : [1984] INSC 208; (AIR 1985 SC 231) where it has been held that a Division Bench of three Judges should not overrule a Division Bench of two Judges, has not been followed by our Courts. According to well-settled law and various decisions of this Court, it is also well-settled that a Full Bench or a Constitution Bench decision as in Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) was binding on the Constitution Bench because it was a Bench of 7 Judges.

46.The principle in England that the size of the Bench does not matter, is clearly brought out in the decision of Evershed M.R. in the case of Morelle v. Wakeling, [1955] EWCA Civ 1; (1955 (1) All ER 708) (supra). The law laid down by this Court is somewhat different. There is a hierarchy within the Court itself here, where larger Benches overrule smaller Benches. See the observations of this Court in Mattulal v. Radhe Lal, [1974] INSC 103; (1975) 1 SCR 127 : [1974] INSC 103; (AIR 1974 SC 1596), Union of India v. K.S. Subramanian [1976] INSC 163; (1977) 1 SCR 87 at p. 92 : [1976] INSC 163; (AIR 1976 SC 2433 at p. 2437) and State of U.P. v. Ram Chandra Trivedi, [1976] INSC 207; (1977) 1 SCR 462 at p. 473 : [1976] INSC 207; (AIR 1976 SC 2547 at p. 2555). This is the practice followed by this Court and now it is a crystallized rule of law. See in this connection, as mentioned hereinbefore, the observations of the State of Orissa v. Titaghur Paper Mills (AIR 1985 SC 1293) (supra) and also Union of India v. Godfrey Philips India Ltd., 1985 Suppl (3) SCR 123 at p. 145 : [1985] INSC 219; (AIR 1986 SC 806 at p, 815).

49................................................................It is true that Shri Jethmalani has shown us the prayers made before the High Court which are at page 121 of the paper-book. He argued that since the transfers have been made under section 407, the procedure would be that given in section 407 (8) of the Code. These directions, Shri Jethmalani sought to urge before us, have been given in the presence of the parties and the clarificatory order of April 5, 1985 which was made in the presence of the appellant and his Counsel as well as the Counsel of the State Government of Maharashtra, expressly recorded that no such submission was made in connection with the prayer for grant of clarification............................

50.According to Shri Jethmalani, the doctrine of per incuriam has no application in the same proceedings. We are unable to accept this contention........................."

57. Shri Jethmalani urged that the directions given on 16th February, 1984, were not per incuriam. We are unable to accept this submission. It was manifest to the Bench that exclusive jurisdiction created under Section 7(1) of the 1952 Act read with section 6 of the said Act, when brought to the notice of this Court, precluded the exercise of the power under section 407 of the Code. There was no argument, no submission and no decision on this aspect at all. There was no prayer in the appeal which was pending before this Court for such directions. Furthermore, in giving such directions, this Court did not advert to or consider the effect of Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) which was a binding precedent. A mistake on the part of the Court shall not cause prejudice to any one. ................................."

(Emphasis supplied)

In Municipal Corporation of Delhi V. Gurnam Kaur, [1988] INSC 271; AIR 1989 SC 38, their Lordships of the Supreme Court explained the meaning of per incuriam and sub-silentio as follows (paragraphs 11 & 12 of the said AIR):

"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn., explains the concept of sub silentio at p. 153 in these words:

"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio."

12. In Gerard V. Worth of Paris Ltd. (K), (1936) 2 All ER 905 the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority."

(Emphasis supplied)

In State of U.P. and another Vs. Synthetics and Chemicals Ltd. and another[1991] INSC 160; , (1991) 4 SCC 139 (supra), their Lordships of the Supreme Court held as under (paras 40 and 41 of the said SCC) :

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. [Young v. Bristol Aeroplane Co. Ltd., (1944) 1 K.B. 718 :(1944) 2 All ER 293]. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, (1962) 2 SCR 558 : [1961] INSC 200; AIR 1962 SC 83), this Court while pointing out the procedure to be followed when conflicting decisions are placed before a bench extracted a passage from Halsbury's laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.

41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law ? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, 677 : (1941) 2 All ER 11, the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry, [1967] INSC 35; AIR 1967 SC 1480 : [1967] INSC 35; (1967) 2 SCR 650, it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

(Emphasis supplied)

In Government of Andhra Pradesh and another Vs. B. Satyanarayan Rao (dead) by L. Rs. and others, A.I.R. 2000 Supreme Court 1729, their Lordships of the Supreme Court held as under (paragraph 8 of the said AIR):

"8. Learned counsel for the respondent attempted to convince us that the decision in the case of State of A.P. Vs. V. Sadanandam, (AIR 1989 SC 2060 : 1989 Lab IC 2024)(supra) has to be ignored on the principle of per incuriam as certain relevant provisions of the Rules were not considered in the said case, and in any case this case requires to be referred to a larger Bench of three Judges. Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue. This is not the case here. In State of A. P. Vs. V. Sadanandam (supra) the controversy was exactly the same as it is here and this Court after considering paragraph 5 of the Presidential Order of 1975 held that the Government has power to fill a vacancy in a zone by transfer. We, therefore, find that rule of per incuriam cannot be invoked in the present case. Moreover, a case cannot be referred to a larger Bench on mere asking of a party. A decision by two Judges has a binding effect on another co-ordinate Bench of two Judges, unless it is demonstrated that the said decision by any subsequent change in law or decision ceases to laying down a correct law. We, therefore, reject the arguments of learned counsel for the respondents."

(Emphasis supplied)

In Arnit Das Vs. State of Bihar, AIR 2000 SC 2264, their Lordships of the Supreme Court held as under (paragraph 20 of the said AIR) :

"20. A decision not expressed, not accompanied by reasons and not proceeding on conscious consideration of an issue can not be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not ratio decidendi. This is the rule of sub-silentio, in the technical sense when a particular point of law was not consciously determined. (See State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, Para 41)."

(Emphasis supplied)

In M/s A-One Granites vs. State of U.P. and others, AIR 2001 Supreme Court 1203, their Lordships of the Supreme Court laid down as under (paragraphs 10, 11 and 12 of the said AIR) :

"10. The first question which falls for consideration of this Court is as to whether the question regarding applicability of Rule 72 of the Rules in relation to the present lease is concluded by the earlier decision of this Court rendered in Prem Nath Sharma v. State of U.P. , (1997) 4 SCC 552 : (1997 AIR SCW 2121 : AIR 1997 SC 2252 : 1997 All LJ 1201). From a bare perusal of the said judgment of this Court it would be clear that the question as to whether Rule 72 was applicable or not was never canvassed before this Court and the only question which was considered was whether there was violation of the said rule.

11. This question was considered by the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment. Following the said decision, this Court in the case of Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101 : [1988] INSC 271; (AIR 1989 SC 38) observed thus (at p. 43 of AIR) :

"In Gerard v. Worth of Paris Ltd.(K), (1936) 2 All ER 905 (C A), the only point argued was on the question of priority of the claimant's debt, and on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancester Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not held thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed."

In State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, reiterating the same view, this Court laid down that such a decision cannot be deemed to be a law declared to have binding effect as is contemplated by Article 141 of the Constitution of India and observed thus :

"A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141."

In the case of Arnit Das v. State of Bihar, 2000 (5) SCC 488 : (2000 AIR SCW 2037 : AIR 2000 SC 2264 : 2000 Cri LJ 2971), while examining the binding effect of such a decision, this Court observed thus (para 20) :

"A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined."

12. Thus we have no difficulty in holding that as the question regarding applicability of Rule 72 of the Rules having not been even referred to, much less considered by this Court in the earlier appeals, it cannot be said that the point is concluded by the same and no longer res integra and accordingly this Court is called upon to decide the same."

(Emphasis supplied)

In Nirmal Jeet Kaur v. State of M.P. and another, (2004) 7 SCC 558, their Lordships of the Supreme Court opined as under (paragraphs 20 and 21 of the said SCC) :

"20. In Salauddin case [1995] INSC 820; (AIR 1996 SC 1042) also this Court observed that the regular court has to be moved for bail. Obviously, an application under Section 439 of the Code must be in a manner in accordance with law and the accused seeking remedy under Section 439 must ensure that it would be lawful for the court to deal with the application. Unless the applicant is in custody his making application only under Section 439 of the Code will not confer jurisdiction on the court to which the application is made. The view regarding extension of time to "move" the higher court as culled out from the decision in K.L. Verma case [(1998) 9 SCC 348] shall have to be treated as having been rendered per incuriam, as no reference was made to the prescription in Section 439 requiring the accused to be in custody. In State v. Ratan Lal Arora [(2004) 4 SCC 590] it was held that where in a case the decision has been rendered without reference to statutory bars, the same cannot have any precedential value and shall have to be treated as having been rendered per incuriam. The present case stands at par, if not, on a better footing. The provisions of Section 439 do not appear to have been taken note of.

21. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. [(1944) 2 All E R 293] is avoided and ignored if it is rendered "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India (in short "the Constitution") which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139). To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

In Babu Parasu Kaikadi (dead) by L.Rs. Vs. Babu (dead) by L.Rs., AIR 2004 Supreme Court 754, their Lordships of the Supreme Court held as under (paragraphs 15, 16, 17 and 18 of the said AIR) :

"15. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Tatoba Kadam (supra), having not noticed the earlier binding precedent of the co-ordinate Bench and having not considered the mandatory provisions as contained in Sections 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent.

16. In Halsbury Laws of England, 4th Edition Volume 26 it is

stated :

"A decision is given per incurima when the Court has acted in ignorance of a previous decision of its own or of a Court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force."

In State of U.P. and another v. Synthetics and Chemicals Ltd. and another, reported in [1991] INSC 160; 1991 (4) SCC 139, this Court observed :

"Incuria" literally means ''carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ''quotable in law' is avoided and ignored if it is rendered, ''in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law."

17. In Govt. of Andhra Pradesh and another v. B. Satyanarayana Rao (Dead) by L. Rs. (2000(4) SCC 262), it has been held as follows :

"Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue."

18. Furthermore, this Court, while rendering judgment in Dhondiram Tatoba Kadam (supra), was bound by its earlier decision of Co-ordinate Bench in Ramchandra Keshav Adke (supra). We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the bar and also without reference to the mandatory provisions of the Act."

(Emphasis supplied)

In N. Bhargavan Pillai (dead) by L. Rs. and another Vs. State of Kerala, AIR 2004 Supreme Court 2317, their Lordships of the Supreme Court held as under (paragraph 14 of the said AIR) :

"14 Coming to the plea relating to benefits under the Probation Act, it is to be noted that Section 18 of the said Act clearly rules out application of the Probation Act to a case covered under Section 5(2) of the Act. Therefore, there is no substance in the accused-appellant's plea relating to grant of benefit under the Probation Act. The decision in Bore Gowda's case (supra) does not even indicate that Section 18 of the Probation Act was taken note of. In view of the specific statutory bar the view, if any, expressed without analyzing the statutory provision cannot in our view be treated as a binding precedent and at the most is to be considered as having been rendered per incuriam. Looked at from any angle, the appeal is sans merit and deserves dismissal which we direct."

(Emphasis supplied)

In Central Board of Dawoodi Bohra Community and another Vs. State of Maharashtra and another, AIR 2005 Supreme Court 752, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7 The Constitution Bench in the case of Chandra Prakash and Ors. Vs. State of U.P. & Anr.-(2002) 4 SCC 234. took into consideration the law laid down in Parija's case and also referred to the decision in Union of India and Anr. V. Raghubir Singh (dead) by L. Rs. etc. relied on by Ms. Indra Jaising, the learned Senior Counsel and then reiterated the view taken in Parija's case. Per incuriam means of decision rendered by ignorance of a previous binding decision such as a decision of its own or of a Court of co-ordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. It is true that Raghubir Singh's case was not referred to in any case other than Chandra Prakash & Ors.' case but in Chandra Prakash & Ors. case. Raghubir Singh's case and Parija's case both have been referred to and considered and then Parija's case followed. So the view of the law taken in series of cases to which Parija's case belongs cannot be said to be per incuriam."

(Emphasis supplied)

In Sunita Devi Vs. State of Bihar and another, AIR 2005 Supreme Court 498, their Lordships of the Supreme Court laid down as under (paragraph 20 of the said AIR) :

"20. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. (1944) 2 All ER 293, is avoided and ignored if it is rendered, "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India, 1950 (in short the ''Constitution') which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. and another v. Synthetics and Chemicals Ltd. and another [1991] INSC 160; (1991) 4 SCC 139. To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

From a perusal of the above decisions of the Supreme Court, it is evident that the doctrine of per incurium applies where the point involved in a case is decided but the decision on the point is given in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. In such circumstances, the decision is treated as per incurium.

The doctrine of sub-silentio applies where the case involves various points, and the decision is given on one or some of the points while the remaining points are not considered and are not decided. Therefore, the decision is silent on such remaining points. In such circumstances, the decision is said to pass sub-silentio on such remaining points.

In short, the doctrine of per incurium applies where the point in question is decided by the Court in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. On the other hand, the doctrine of sub-silentio applies where the point in question is not considered and decided by the Court.

In either of the two situations, the decision on the point in question is not binding.

Coming now to the present case, the doctrine of sub-silentio does not apply to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Malhotra Steel Syndicate case, the points involved were as to whether substantial compliance with Form No.3 is necessary, as to whether any non-compliance with Form No.3 is an illegality or is a mere irregularity, and as to whether fresh opportunity to rectify the defect in the affidavit should be given.

The said decision of the Supreme Court is not silent on the above points involved in the case before the Supreme Court. Therefore, the said decision cannot be said to pass sub-silentio on the said points.

The question then arises as to whether the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incurium.

From a perusal of the decisions of the Supreme Court referred to above, it will be noticed that for a decision to be rendered per incuriam, it is necessary that the following requirements should be fulfilled :

1- The decision has been given in "ignorance or forget-fulness" of some authority binding on the Court concerned or of some relevant statutory provision.

2- The said binding authority or the said statutory provision is contrary to or inconsistent with the decision of the Court concerned.

Therefore, merely because some binding authority or some statutory provision has been ignored in the decision of the Court concerned, will not render the decision per incuriam.

It is further necessary that the binding authority or the statutory provision should be inconsistent with or contrary to the decision of the Court concerned.

Further, the doctrine of per incuriam applies where the decision has been given in "ignorance or forget-fulness" of some binding authority or a relevant statutory provision. Merely because a binding authority or a relevant statutory provision has not been referred to in the decision, it will not render the decision per incuriam provided that such binding authority or statutory provision is not inconsistent with or contrary to the decision of the Court concerned.

Reference in this regard may be made to the following decisions.

In M/s Gupta Sugar Works Vs. State of U.P. and others, AIR 1987 Supreme Court 2351, their Lordships of the Supreme Court opined as follows (paragraph 12 of the said AIR) :

"12. It is true that there is no express reference to Panipat [1972] INSC 272; (AIR 1973 SC 537) and Anakapalle [1972] INSC 271; (AIR 1973 SC 734) in the judgment in New India Sugar Works. But the judgment need not be a digest of cases. It need not be written like a thesis. The decision in New India Sugar Works (AIR 1981 SC 998) may be brief, but not less predictable on the principles of Panipat and Anakapalle. There this Court found the levy price reasonable even from the point of view of the industry. This Court took into consideration the liberty reserved to manufacturers to sell freely 50 % of the sugar manufactured and also 100% of the produce by 2nd and 3rd processes. This Court was of opinion that by such a free sale the industry could get reasonable return. We agree with this conclusion and see no reason for reconsideration."

(Emphasis supplied)

In V. Sudeer, etc. Vs. Bar Council of India and another, AIR 1999 Supreme Court 1167, their Lordships of the Supreme Court held as under (paragraph 26 of the said AIR) :

"26........................................................... However, the question is whether Section 49 (1) (ah) confers such a power on the Bar Council of India. So far as this question is concerned, it has stood answered against the respondent Bar Council of India by a three Judge Bench Judgment of this Court reported in Indian Council of Legal Aid & Advice case (1995 AIR SCW 473 (supra). A. M. Ahmadi, CJI, speaking for the three Judge Bench, had to consider in the said decision, the question whether the Bar Council of India could frame a rule restricting the enrolment of advocates to the State roll to only those who had not completed 45 years of age. Holding such rule to be ultra vires the powers of the Bar Council of India under the Act, it was held that such a rule could not be sustained under Section 49 (1)(ah) as the said provision dealt with a situation after enrolment of advocates and could not take in its sweep any situation prior to their enrolment. Shri Rao, learned senior counsel for the respondent Bar Council of India, tried to salvage the situation by submitting that the said decision was pari incuriam on the ground that Section 24(3)(b) was not noticed. We have already held that Section 24 (3)(d) is the provision which permits the Bar Council of India by exercise of rule making power to make otherwise ineligible person eligible for enrolment and does not act in the reverse direction to make otherwise eligible persons ineligible. Once that conclusion is reached, Section 24(3)(d) becomes totally irrelevant for deciding the question whether the rule impugned before the three Judge Bench in that case could have been sustained by the Bar Council of India by taking resort to Section 24(3)(d). Non-consideration of such irrelevant provision, therefore, cannot make the ratio of the decision in the aforesaid case pari incurium. The second ground on which Shri Rao tried to submit that the said decision was pari incurium was by inviting our attention to a Constitution Bench Judgment of this Court in In re : Lily Isabel Thomas case [1964] INSC 5; (AIR 1964 SC 855) (supra). Now it must be kept in view that the said decision was rendered in connection with an entirely different statutory scheme. Section 52 of the Act, as noted earlier, saves power of the Supreme Court to make Rules under Article 145 of the Constitution of India for determining persons who are eligible to practise before the Supreme Court. Thus, the constitutional power of the Supreme Court for regulating the working of advocates in the Supreme Court who were otherwise entitled to practise in any Court in India under the Act could be validly exercised. When we turn to the constitutional power of the Supreme Court under Article 145, we find clearly mentioned therein that subject to the provisions of any law made by the Parliament, the Supreme Court may from time to time, with the approval; of the President, make rules for regulating generally the practice and procedure of the Court including rules as to the persons practising before the Court. As Section 52 of the Act has expressly saved the powers of the Supreme Court under Article 145 for determining the persons who shall be entitled to practise and plead before the Supreme Court, Article 145 could operate on its own without any fetter being imposed by any statutory law enacted by the Parliament. Accordingly, in the light of Article 145, a question arose before the Constitution Bench in the aforesaid case, whether the Supreme Court was competent to enact a rule in connection with advocates practicing before it, who could act as an advocate on record subject to their passing examination as laid down under the rules. The term ''persons practicing before the Court' as laid down by Article 145 (1)(a) in connection with such rule making power was interpreted to take in its sweep not only persons actually practising but even entitled to practise before the Supreme Court. In this connection, the phraseology found in the Union List in the 7th Schedule of the Constitution in Entry 77, namely persons entitled to practise before the Supreme Court was held to be in pari materia with the phrase ''persons practicing before the Court' as found in Article 145 (1)(a). In the light of the aforesaid wide sweep of Article 145 (1)(a), expressly saved by Section 52 of the Act it was held that the rule laying down examination to be undergone by practicing advocates before the Supreme Court before they could act as advocates on record was within the rule making power of the Supreme Court. It is difficult to appreciate how the aforesaid decision of the Constitution Bench rendered in the light of an entirely different constitutional scheme can be of any assistance to the Bar Council of India in the present case. For sustaining the rule making power of the Bar Council of India, the express provisions of Section 7 and Section 24 (3)(d) read with Section 49 (1)(ah) would be the only relevant provisions which were considered by this Court in a three Judge Bench judgment Indian Council of Legal Aid & Advice case (1995 AIR SCW 473) (supra). The ratio of the Constitution Bench judgment rendered in connection with an entirely different question posed for decision In the light of the relevant provisions of the constitutional scheme dealing with the rule making power of the Supreme Court under Article 145, therefore, cannot be said to be laying down anything contrary to what the three Judge Bench Judgment laid down in connection with this very statutory scheme which squarely arises for consideration in the present case. Hence, even the second ground canvassed by learned senior counsel, Shri Rao for the Bar Council of India, for whittling down the binding effect of the aforesaid three Judge Bench judgment of this Court, cannot be sustained".

(Emphasis supplied)

In Director of Settlements, A.P. and others Vs. M.R. Apparao and another, AIR 2002 Supreme Court 1598, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7. So far as the first question is concerned. Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ''declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle under-lying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An ''obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be dented that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR 1970 SC 1002 and AIR 1973 SC 794). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court, which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324). We have to answer the first question bearing in mind the aforesaid guiding principles. We may refer to some of the decisions cited by Mr. Rao in elaborating his arguments contending that the judgment of this Court dated 6th February, 1986 cannot be held to be a law declared by the Court within the ambit of Article 141 of the Constitution. Mr. Rao relied upon the judgment of this Court in the case of Pandit M.S. M. Sharma v. Shri Sri Krishna Sinha and others, 1959 Suppl (1) SCR 806, wherein the power and privilege of the State Legislature and the fundamental right of freedom of speech and expression including the freedom of the press was the subject matter of consideration. In the aforesaid judgment it has been observed by the Court that the decision in Gunupati Keshavram Reddy v. Nafisul Hasan, AIR 1954 SC 636, relied upon by the counsel for the petitioner which entirely proceeded on a concession of the counsel cannot be regarded as a considered opinion on the subject. There is no dispute with the aforesaid proposition of law."

(Emphasis supplied)

In State of Bihar Vs. Kalika Kuer @ Kalika Singh and others, AIR 2003 Supreme Court 2443: JT 2003 (4) SC 489 (supra), their Lordships of the Supreme Court held as under (paragraph 9 of the said AIR) :

"9. In Fuerst Day Lawson Ltd. v. Shivaraj V. Patil (2001) 6 SCC 356, this Court observed :

"A prior decision of the Supreme Court on identical facts and law binds the Court on the same points of law in a latter case. In exceptional instances, where obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, the principle of per incuriam may apply. Unless it is a glaring case of obtrusive omission, it is not desirable to depend on the principle of judgment "per incuriam". It has to be shown that some part of the decision was based on a reasoning which was demonstrably wrong, for applying the principle of per incuriam."

(Emphasis Supplied)

Keeping in view the above legal position, let us consider the submission of the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam.

In the present case, Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that the Affidavit verifying the petition shall be in Form No. 3.

The Companies (Court) Rules, 1959 do not contain any provision prohibiting the Court from permitting a proper Affidavit to be filed. In fact, Rule 17 of the said Rules lays down that the Forms set forth in Appendix I, where applicable, shall be used "with such variations as circumstances may require".

Moreover, Rule 9 of the Companies (Court) Rules, 1959 lays down that nothing in the said Rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

As there is no rule prohibiting the Court from permitting a proper Affidavit to be filed, it cannot be said that any statutory provision was ignored by the Supreme Court in Malhotra Steel Syndicate case (supra).

Further, there was no decision binding on the Supreme Court in this regard. The decisions on the question under consideration, which have been relied upon by the learned counsel for the Respondent-Company, were those given by the High Courts.

Therefore, it cannot be said that any binding decision was ignored by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

Hence, it is evident that neither any statutory provision nor any binding decision contrary to or inconsistent with the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) was ignored by the Supreme Court while giving the said decision.

Moreover, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the petition was not in proper Form and that the petition could not be entertained.

Having regard to the facts of the case, as evidently incorporated in the Division Bench decision of the Punjab and Haryana High Court, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding-up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was any defect or irregularity in the Affidavit, opportunity should have been given to rectify the same.

Thus, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) clearly shows that the Supreme Court was conscious of the requirements of the Companies (Court) Rules, 1959, and keeping in view the same, it gave its decision in Malhotra Steel Syndicate case (supra). Merely because the provisions of the Companies (Court) Rules, 1959 have not been specifically referred to in the decision in Malhotra Steel Syndicate case (supra), the same cannot be construed to mean that the said decision was given in ignorance of the provisions of the said Rules.

Thus, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be said to be per incuriam, as submitted by the learned counsel for the Respondent-Company.

The learned counsel for the Respondent-Company has also submitted that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not a binding precedent under Article 141 of the Constitution of India, as the Supreme Court did not consider the relevant provisions, and no ratio can be culled out from the said decision.

Reliance in this regard has been placed on the following decisions :

1-Krishena Kumar Vs. Union of India and others, AIR 1990 Supreme Court 1782 (supra).

2-Government of India Vs. Workman of State Trading Corporation & others (1997) 11 SCC 641 (supra).

3-Islamic Academy of Education and another Vs. State of Karnataka and others, 2003 (6) Supreme Court Today 303 = (2003) 6 Supreme Court Cases 697==AIR 2003 SC 3724 (supra).

Having considered the submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

Various principles, which follow from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), have already been noted in the earlier part of this judgment. Therefore, it is not correct to suggest that no ratio can be culled out from the said decision.

As regards the decisions relied upon by the learned counsel for the Respondent-Company in this regard, let us first take up Krishena Kumar case, AIR 1990 Supreme Court 1782 (supra).

In this case, their Lordships of the Supreme Court laid down as under (paragraphs 17, 18 and 19 of the said AIR ):

"17. The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara's case and how far that would be applicable to the case of the P.F. retirees.

18. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required." This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees (1882 (7) AC 259) and Lord Halsbury in Quinn v. Leathem (1901) AC 495 (502). Sir Frederick Pollock has also said : "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."

19. In other words, the enunciation of the reason or principle upon which a question before a Court has been decided is alone as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol.26, para 573 :

"The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to be bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi."

(Emphasis supplied)

This decision thus lays down that the underlying principle, that is, the general / abstract reasons or the general /abstract grounds upon which the decision is based ( as distinguished from the concrete /specific peculiarities of the particular case) form the ratio decidendi. If the ratio decidendi is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it.

Applying the above propositions to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the underlying principles, that is, the general/ abstract reasons or the general /abstract grounds upon which the said decision is based, have already been noted in the earlier part of this judgment, and the same form the ratio decidendi of the said decision in Malhotra Steel Syndidate case (supra).

In Government of India case, (1997) 11 SCC 641 (supra), the Madras High Court had relied upon a decision of the Supreme Court in G. Govinda Rajulu Vs. A.P. State Construction Corporation Ltd., 1986 Suppl SCC 651.

The Supreme Court in Government of India case (supra) held that the decision in G. Govinda Rajulu case "is virtually a non-speaking order which does not set out the facts and the circumstances in which the direction came to be issued against the Government. It is not clear as to what was the connection between the respondent-Corporation and the State Government...................it does not set out the facts or the reason for the conclusion or direction given. It can, therefore, not be treated as a binding precedent."

(Emphasis supplied)

The above propositions laid down in Government of India case (supra) have no application to the decision in Malhotra Steel Syndicate case (supra).

The decision in Malhotra Steel Syndicate case cannot be described as non-speaking order. The said decision refers to the material facts and circumstances necessary for deciding the case. It gives reasons for the conclusions drawn and the directions given in the decision.

In Islamic Academy of Education and another Vs. State of Karnataka and others, (2003) 6 Supreme Court Cases 697 (supra), their Lordships of the Supreme Court laid down as under (Paragraphs 139, 140, 141, 142, 143, 144, 145, and 146 of the said SCC) :

"139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj, (2001) 2 SCC 721).

140. In Padma Sundara Rao v. State of T.N., (2002) 3 SCC 533, it is stated (SCC p. 540, paragraph 9):

"There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial ulterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board, [1972] UKHL 1; (1972) 1 All ER 749 (HL) (Sub nom British Railways Board v. Herrington), Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases."

(See also Haryana Financial Corpn. V. Jagdamba Oil Mills,(2002) 3 SCC 496)

141. In General Electric Co. v. Renusagar Power Co., [1987] INSC 207; (1987) 4 SCC 137, it was held : (SCC p. 157, paragraph 20)

"As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words ''adjudication of the merits of the controversy in the suit' were used by this Court in State of U.P. v. Janki Saran Kailash Chandra, AIR 1973 SC 2071, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided."

142. In Rajeswar Prasad Misra v. State of W.B., [1965] INSC 130; AIR 1965 SC 1887 (sic) it was held :

"Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments. It is also well known that ratio of a decision is the reasons assigned therein."

(See also Amar Nath Om Prakash v. State of Punjab, (1985)1 SCC 345 and Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573.)

143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, wherefor, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.

144. In Keshav Chandra Joshi v. Union of India, 1992 Suppl (1) SCC 272, this Court when faced with difficulties where specific guidelines had been laid down for determination of seniority in Direct Recruit Class II Engg. Officers' Assn. V. State of Maharashtra, (1990) 2 SCC 715, held that the conclusions have to be read along with the discussions and the reasons given in the body of the judgment.

145. It is further trite that a decision is an authority for what it decides and not what can be logically deduced therefrom. (See Union of India v. Chajju Ram, (2003) 5 SCC 568.)

146. The judgment of this Court in T.M.A. Pai Foundation, (2002) 8 SCC 481, will, therefore, have to be construed or to be interpreted on the aforementioned principles. The Court cannot read some sentences from here and there to find out the intent and purport of the decision by not only considering what has been said therein but the text and context in which it was said. For the said purpose the Court may also consider the constitutional or relevant statutory provisions vis-à-vis its earlier decisions on which reliance has been placed."

(Emphasis supplied)

This decision, thus, lays down that the ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal.

This decision also lays down that a decision is an authority for what it decides and not what can be logically deduced therefrom.

Applying the above tests to the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), a reading of the said judgment in its entirety shows that the said judgment is based on the principles and reasons enumerated in the earlier part of this judgment. The said principles and reasons, therefore, constitute the ratio decidendi of the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra).

The question may be examined from another angle also, as submitted by the learned counsel for the Petitioner-Company.

Article 141 of the Constitution of India lays down as under :

"141. Law declared by Supreme Court to be binding on all Courts.--The law declared by the Supreme Court shall be binding on all Courts within the territory of India."

In view of Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts including the High Courts of the country.

Therefore, the decisions of the Supreme Court are binding on all Courts including the High Courts of the country.

It is not open to any High Court to by-pass the binding nature of the decision of the Supreme Court on the ground that certain aspects were not considered in the decision of the Supreme Court. Even if certain aspects were not specifically examined by the Supreme Court in its decision or certain statutory provisions were not specifically referred to by the Supreme Court in its decision, the same cannot take away the binding nature of the decision of the Supreme Court.

In view of the above legal position, it is evident that even if the submissions made by the learned counsel for the Respondent-Company that the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 have not been specifically referred to by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra), were to be accepted, still, the said decision of the Supreme Court will not lose its binding force on this Court.

The above legal position is apparent from the various decisions relied upon by the learned counsel for the Petitioner-Company.

In Union of India Vs. Firm Ram Gopal Hukum Chand and others, AIR 1960 Allahabad 672, a learned Single Judge of this Court held as under (paragraphs 25, 26, 27, 28 and 34 of the said AIR) :

"25. Two questions arise in this connection. First, under what circumstances will a legal principle enunciated by the Supreme Court amount to a declaration of law under Art. 141, and secondly, does this Article apply only to express declaration of law or also to those which are clearly implied ? It is necessary to examine the scope and purpose of Art. 141.

26. In the various authorities cited before me, it has been overlooked--if I may say so with deep respect---that the doctrine of the supremacy of any declaration of law by the Supreme Court has been made a part of the constitutional law of the re-public. It therefore rests on a much loftier pedestal than judicial conventions under which every inferior court is bound to follow the previous decisions of a Superior Court.

If the object had been merely to guarantee the binding force of the decisions of the Supreme Court as the highest court of the republic, no special provisions in the Constitution was required. The founders were not inserting a superfluous or redundant article in the Constitution. Many of them were eminent lawyers and jurists, and well acquainted with judicial practice and principles according to which the decisions of the Supreme Court have the same binding force as those of the House of Lords in England even without Art. 141.

27. But they were not content with the mere binding force of the decisions of the Supreme Court. The language of Art. 141 shows that the Founders intended to extend its scope beyond the actual decisions of the Supreme Court to every declaration of law made by it. This is clear from a comparison of the language of the Article with that of Sec. 212 of the Government of India Act, 1935, which gave a binding force to the decisions of the old Federal Court.

That Section provided that "the law declared by the Federal Court and by any judgment of the Privy Council shall, so far as applicable, be binding on and shall be followed by all Courts in British India". But Art. 141 of our Constitution provides that "the law declared by the Supreme Court shall be binding on all courts within the territory of India". The word "judgment" is not used, and the qualifying words "as far as applicable" have been deleted.

The omission is significant and negatives any suggestion that the Founders had in mind the principle of ratio decidendi or the binding effect of decisions, but nothing more. I am inclined to the view that Art. 141 has the effect, in addition to investing the decisions of the Supreme Court with a binding force, of creating a constitutional organ whose declaration of law pronounced ex cathedra shall be binding on all courts in the republic.

Under this article it is not necessary that a pronouncement of the Supreme Court should be part of the ratio decidendi of any judgment. An obiter dictum or a mere enunciation of a principle of law would amount to a declaration of law under Art. 141, and the manner and circumstances of its pronouncement are immaterial, provided it is made by the Supreme Court ex cathedra.

28. It was argued by Mr. Sapru that the extension of Article 141 to obiter dicta or observations which do not form part of the ratio decidendi of a judicial decision would tie up the discretion of the High Courts even in matters not decided by the Supreme Court, and it could not have been the intention of the Founding fathers to fetter the powers of the High Court to this extent. There is a short answer to this argument.

There is not the slightest ground for fearing if I may venture to say with profound respect - that the highest court of the Republic is likely to make an unrestricted use of its powers under Article 141 and flood the realm with unnecessary declarations of law. On the contrary, the Supreme Court have already taken the strict view that no principle of law should be proclaimed by it unless required for the decision of a matter in dispute before the Court.

In Central Bank of India v. Their Workmen, [1959] INSC 82; AIR 1960 SC 12, a Bench of five judges of the Supreme Court observed that it was not necessary for the Court to decide hypothetical questions which may arise in any future reference and that the Court does not give speculative opinions in the exercise of its appellate powers. Again, in Basheshar Nath v. Commr. of Income-tax, [1958] INSC 117; AIR 1959 SC 149, Das, C.J. and Kapur, J. took the view that the Supreme Court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it.

Thus the judges of the Supreme Court are, if I may say so again with profound respect, conscious that any pronouncement of law by the Court acquires "potency" under Art. 141 and that therefore such declarations should be made only when necessary. But this is a matter concerning the self-discipline of the Supreme Court which does not affect the Constitutional doctrine that any declaration of law, howsoever made, by the Supreme Court, is binding on all courts in India.

34. For these reasons I am of the opinion that Art. 141 extends to every declaration of law made by the Supreme Court even if it is obiter or not the foundation of its decision in a dispute before it. I am fortified in this view by several opinions of various High Courts, though my reasons are different. K.P. Doctor v. State of Bombay, (S) AIR 1955 Bom 220 (FB), Surajmal v. State of M.P., AIR 1958 Madh Pra 103 (FB), Sharda Prasad v. Accountant General, (S) AIR 1955 All 496. I am further of the opinion that a declaration of law may be expressed or may be indicated by clear implication.

I am also of the opinion that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law. Any re-consideration can only be done by the Supreme Court itself. Meanwhile the High Court must follow it, though it may respectfully draw the attention of the Supreme Court for consideration on a future occasion.

In fact, it may be not only the privilege but the duty of the High Court to assist the Supreme Court in its task of clearing up the litter of conflicting decisions and introducing tidiness and uniformity of legal principles over as large a field as possible by bringing it to its notice any matter requiring re-consideration --- I say ''duty' because the number of cases agitated before the High Courts all over India is much larger than those which eventually reach the Supreme Court."

(Emphasis supplied)

Thus, this decision has laid down that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law.

In Ram Manohar Lohia and others Vs. State of U.P. and others, AIR 1968 Allahabad 100, this Court held as under (paragraphs 12 and 13 of the said AIR) :

"12. It is no doubt true that in Babulal Parate's case[1961] INSC 10; , AIR 1961 SC 884 it does not appear to have been contended on behalf of the petitioners that the power conferred by Section 144 Cr. P.C. is not in the interests of things specified in clauses (2) and (3) of Article 19 of the Constitution and the section is, therefore, ultra vires, irrespective of the fact whether the restrictions it imposes are reasonable or not. But it is not possible on that basis to contend that the Supreme Court did not consider the constitutionality of the section from that point of view also. The question of the reasonableness of restrictions could arise only when the power to impose restrictions was found to be present and, therefore, the contention that the Supreme Court did not consider whether such a power really existed is unacceptable. Para 16 of the report of the judgment in that case clearly indicates that their Lordships considered the question whether the activities with regard to which the Magistrate is entitled under Section 144 Cr. P.C. to place restraint are such that their prevention would be in the interests of public order and held that they are such activities. If any doubt is still left about the scope and effect of this decision it should be dispelled by the final conclusion reached by their Lordships. That conclusion has been stated in para 34 of the report and is as follows :-

"We have, therefore, reached the conclusion that the order of the District Magistrate is not unconstitutional either because section 144 is itself violative of fundamental rights recognized in Article 19 or on the ground that it is vague and places unreasonable restrictions on those fundamental rights."

The opinion expressed in the case by their Lordships, therefore, is that section 144 Cr. P.C. does not violate Article 19 of the Constitution, and it necessarily means that such parts of the section as may have the effect of placing restrictions on the rights guaranteed under Article 19(1) (a) and (b) are respectively protected by clauses (2) and (3) of Article 19. This being the law declared by the Supreme Court it is binding on this Court under Article 141 of the Constitution and even the first ground on which the validity of section 144 has been challenged on behalf of the petitioners must accordingly be rejected.

13. The contention that such observations of the Supreme Court in the above case as cover matters beyond the reasonableness of the restrictions placed on certain fundamental rights by section 144 Cr. P. C. are obiter and, therefore, of no binding effect is wholly misconceived. A declaration of law made by the Supreme Court is not a mere precedent and the necessity of the declaration is not a condition of its binding effect. Even if such a declaration is in the nature of an obiter Article 141 of the Constitution makes it binding on all courts. But quite apart from this, it is obvious that the question whether clauses (2) and (3) of Article 19 at all permit the imposition of restrictions is logically prior to the question of the reasonableness of the restrictions, and no part of the observations of their Lordships relating to the constitutionality of section 144 Cr. P.C. was, therefore incidental or unnecessary for the decision of the case and no part of the observations can be regarded as obiter. It is a matter of no consequence that the constitutionality of section 144 Cr. P.C. was challenged in that case only on the narrow ground of the reasonableness of the restrictions placed by it and not also on the wider ground of the total absence of the power to place restrictions. A declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it. And this would be specially so when the law declared is in regard to the constitutionality of a statute or a rule, and in such a case the binding effect of the declaration cannot be measured by or limited to the points raised on behalf of the parties or to which express reference is made in the judgment. In this connection I may refer to the following cases."

(Emphasis supplied)

Thus, this decision has laid down that a declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it.

In Ballabhdas Mathuradas Lakhani and others Vs. Municipal Committee, Malkapur, AIR 1970 Supreme Court 1002 (supra), their Lordships of the Supreme Court observed as under (paragraph 4 of the said AIR) :

"4. The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, 1965-3 SCR 499 = [1965] INSC 81; (AIR 1966 SC 249). That case arose under the C.P. & Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66 (1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a taxpayer. This Court held that levy of tax on cotton ginned by the taxpayer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court".

(Emphasis supplied)

Thus, this decision has laid down that a decision of the Supreme Court is binding on the High Court and the High Court cannot ignore it on the ground that relevant provisions were not brought to the notice of the Supreme Court.

In T. GOVINDARAJA MUDALIAR ETC. ETC. Vs. THE STATE OF TAMIL NADU AND OTHERS, [1973] INSC 1; (1973) 1 SCC 336 (supra), their Lordships of the Supreme Court opined as under (paragraphs 10 and 11 of the said SCC) :

"10. The argument of the appellants in that prior to the decision in Rustom Cavasjee Cooper's case (supra), it was not possible to challenge Chapter IV-A of the Act as violation of Article 19(1)(f) owing to the decision of this Court that Article 19(1)(f) could not be invoked when a case fell within Article 31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Article 19(1)(g), and clause (f) of that article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji Munji's case (supra), and other decisions which followed it were based mainly on an examination of the inter-relationship between Article 19(1)(f) and Article 31(2). There is no question of any acquisition or requisition in Chapter IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case (supra), after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Article 19(1)(f). It was, therefore, open to those effected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Article 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument. In this connection we may refer to the observations of this court in Mohd. Ayub Khan v. Commissioner of Police, Madras and another, (1965) 2 SCR 884=AIR 1965 SC 1623, according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawati and Others v. The State of Punjab and Others, 1963 (2) SCR 774 = [1962] INSC 182; AIR 1963 SC 151, a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Article 31 (2) but it would be still open to challenge under Article 19(1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :

"The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided."

11. It is common ground in the present cases that the validity of Chapter IV-A of the Act has been upheld on all previous occasions. Merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) was not expressly considered or a decision given thereon will not take away the binding effect of those decisions on us."

(Emphasis supplied)

This decision has thus laid down that if the Supreme Court gave its decision in regard to a question, and the decision has been followed in other cases then binding effect of the decision of the Supreme Court cannot be taken away on the ground that certain aspects pertaining to the said question were not brought to the notice of the Supreme Court.

As noted above, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Pvt. Ltd. case (supra), by the Andhra Pradesh High Court in D & H SECHERON ELECTRODES (P.) LTD. case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In Ambika Prasad Mishra Vs. State of U.P. and others, AIR 1980 Supreme Court 1762 (supra), their Lordships of the Supreme Court held as under (paragraphs 5 and 6 of the said AIR) :

"5. .......................It is significant that even apart from the many decisions upholding Art. 31A, Golak Nath's case [1967] INSC 45; (1967) 2 SCR 762 : [1967] INSC 45; (AIR 1967 SC 1643) decided by a Bench of 11 Judges, while holding that the Constitution (First Amendment) Act exceeded the constituent power still categorically declared that the said amendment and a few other like amendments would be held good based on the doctrine of prospective overruling. The result, for our purpose, is that even Golak Nath's case has held Art. 31A valid. The note struck by later cases reversing Golak Nath does not militate against the vires of Art. 31A. Suffice it to say that in the Kesavananda Bharti's case, 1973 Supp SCR 1 : (AIR 1973 SC 1461) Art. 31A was challenged as beyond the amendatory power of Parliament and, therefore, invalid. But, after listening to the marathon erudition from eminent counsel, a 13 Judge Bench of this Court upheld the vires of Article 31A in unequivocal terms. That decision binds, on the simple score of stare decisis and the constitutional ground of Art. 141. Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. In this view, other submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to re-open what was laid down for the guidance of the nation as a solemn proposition by the epic fundamental rights case. From Kameshwear Singh, AIR 1952 SC 252 and Golak Nath (1967) through Kesavananda (1973) and Kannan Devan[1972] INSC 125; , (1973) 1 SCR 356 : [1972] INSC 125; (AIR 1972 SC 2301) to Gwalior Rayons[1973] INSC 167; , (1974) 1 SCR 671 : (AIR SC 2734) and after Art. 31A has stood judicial scrutiny although, as stated earlier, we do not base the conclusion on Article 31A. Even so, it is fundamental that the nation's Constitution is not kept in constant uncertainty by judicial review every season because it paralyses, by perennial suspense, all legislative and administrative action on vital issues deterred by the brooding threat of forensic blow-up. This, if permitted, may well be a kind of judicial destabilization of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake-up. It is surely wrong to prove Justice Roberts of the United States Supreme Court right when he said :Lonnie E. Smith v. S.E. Allwright, [1944] USSC 108; (1944) 321 US 649, 669 and 670--

"The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same class as a restricted railroad ticket good for this day and train only..............................................

It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

.............It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

6.It is wise to reminder that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned" (Salmond 'Jurisprudence' p. 215 (11th edition). And none of these misfortunes can be imputed to Bharti's case (AIR 1973 SC 1461) (supra )......"

(Emphasis supplied)

This decision has, therefore, laid down that the binding effect of a decision cannot be taken away or undone on the ground of every new discovery or argumentative novelty. The decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned.

In Anil Kumar Neotia and others Vs. Union of India and others, AIR 1988 Supreme Court 1353 (supra), their Lordships of the Supreme Court held as under (paragraph 18 of the said AIR) :

"18. In that view of the matter this question is no longer open for agitation by the petitioners. It is no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged. See in this connection the observations of this Court in T. Govindraja Mudaliar v. State of Tami Nadu [1973] INSC 1; (1973) 3 SCR 222 : [1973] INSC 1; (AIR 1973 SC 974), where this Court at pp. 229 and 230 of the report (SCR) : (at p. 978 of AIR) observed as follows :

"The argument of the appellants is that prior to the decision in Rustom Cavasjee Cooper's case [1970] INSC 18; (AIR 1970 SC 564) it was not possible to challenge Chapter IV-A of the Act owing to the decision of this Court that Art. 19(1)(f) could not be invoked when a case fell within Art.31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Art. 19(1)(g), and Cl. (f) of that Article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji, Munji and other decisions which followed it were based mainly on an examination of the inter-relationship between Art. 19(1)(f) and Art. 31(2). There is no question of any acquisition or requisition in Chap. IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case [1960] INSC 101; (AIR 1960 SC 1080) after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Art. 19 (1)(f). It was, therefore, open to those affected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Art. 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument, in this connection we may refer to the observations of this Court in Mohd. Ayub Khan v. Commr. of Police Madras, (1965) 2 SCR 884 : [1965] INSC 21; (AIR 1965 SC 1623) according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawanti v. State of Punjab, (1963) 2 SCR 774 : [1962] INSC 182; (AIR 1963 SC 151) a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Art. 31 (2) but it would be still open to challenge under Art. 19 (1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :-

'The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided.' "

(Emphasis supplied)

Thus, it has been laid down in the above case that the binding effect of the decision of the Supreme Court deciding a particular question cannot be co-laterally challenged on the ground that certain points / aspects in regard to the said question were not urged before the Supreme Court. In case, a particular question has been decided by the Supreme Court in its decision then the binding effect of such a decision cannot be undone on the ground that a particular argument pertaining to the question under consideration was not considered in the said decision.

In Suganthi Suresh Kumar Vs. Jagdeeshan, (2002) 2 SCC 420 (supra), their Lordships of the Supreme Court held as under (paragraphs 9, 10 and 11 of the said SCC) :

"9. It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, [1988] INSC 120; (1988) 2 SCC 587 : [1988] INSC 120; AIR 1988 SC 1353, that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.

11. When this Court pronounced in Hari Singh v. Sukhbir Singh, [1988] INSC 242; (1988) 4 SCC 551 : [1988] INSC 242; AIR 1988 SC 2127, that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this Court. Hence learned Single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose, (2001) 3 KLT 431. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline the Single Judge of the High Court has incorrectly reversed it."

(Emphasis supplied)

The above case has thus laid down that it is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. The High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

In view of the propositions laid down in the above cases, it is evident that the binding effect of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be taken away on the ground that certain aspects were not considered in the said decision of the Supreme Court or certain relevant provisions of the Companies Act, 1956 and / or the Companies (Court) Rules, 1959 were not considered by the Supreme Court in the said decision. The questions to be considered by the Supreme Court in Malhotra Steel Syndicate case (supra) have already been indicated above. The Supreme Court gave its decision on the said questions. The decision of the Supreme Court is binding on this Court, not-with-standing the contention of the learned counsel for the Respondent-Company that certain aspects or certain relevant provisions in regard to the said questions were not considered in the decision of the Supreme Court.

The matter may be considered from yet another angle.

Even a-part from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position, in my opinion, still remains the same, namely, (1) The Affidavit filed in support of the Company Petition should substantially comply with the form and verification as provided in the Companies (Court) Rules, 1959; (2) Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity; (3) In case, there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same; (4) In case, the Affidavit, filed in support of the Winding up Petition is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

It is true that in view of sub-section (2) of Section 441 of the Companies Act, 1956, which is relevant in the present case, the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up.

In view of this provision, it is evident that the winding up order passed by the Court relates back to the time of the presentation of the Petition for the winding up.

However, the above provision will not create any complication even if opportunity is given to the Petitioner-Company to file a fresh Affidavit, in case, the Affidavit, filed in support of the Winding up Petition, is found to be defective. The fresh Affidavit will relate back to the date of filing of the Petition. Therefore, the Winding up Petition will be deemed to have been validly presented on the date on which it was originally presented.

In view of this, as noted in the earlier part of the judgment, various complications pointed out in the decision of the Calcutta High Court in Gaya Textiles case (supra) and in the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), would not arise.

The above legal position is supported by various decisions, which have been given without placing reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Mrs. Roma Deb and others Vs. R.C. Sood & Co. Pvt. Ltd., [1990] 67 Company Cases 350 (Delhi) (supra), the Delhi High Court held as follows (at pages 355 and 356 of the said Company Cases) :

"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, the court would do this 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. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 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" as 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 21 and Form No.3 merely stipulated an affidavit verifying the petition. I think Mr. Chopra is right in this submission of his.

It was not disputed that the court could permit amendment of the petition. As noted above, in the present case, the 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 for the original petitioner and in that case would permit such amendments of the petition as might be necessary. Under rule 102, the amended petition shall be treated as a 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 of 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 a 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 the 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 a 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, it 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 except that I would say that in case of a winding up petition, the 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 do not think there is any bar coming in my way in permitting the petitioners to file a proper affidavit verifying the petition."

(Emphasis supplied)

Thus, in MRS. ROMA DEB case (supra), the Delhi High Court has held that a defective affidavit verifying the petition for winding up cannot be treated as fatal to the petition. The principle governing the verification of a plaint, namely, that a defect in verification is only an irregularity in procedure which can be cured at any stage of the suit, can be imported for verification of a petition for winding up. However, the Court would not permit the rectification of the defect in the verification of a petition for winding up just as a matter of course, but would take into account all the relevant circumstances, including the conduct of the parties.

Where an amendment of the petition for winding up is permitted to be made for any reason, the amended petition relates back to the date of filing of the original petition. If amendment of the petition can be allowed, there is no reason as to why a defective affidavit verifying the petition could not be rectified. In the ends of justice and if the circumstances of the case so require, it is open to the Court, in its inherent powers, to allow the petitioner to present an affidavit in support of the petition in terms of Rule 21 and Form No. 3 of the Companies (Court) Rules, 1959, if the affidavit originally filed with the petition did not conform to Form No. 3.

In SUVARN RAJARAM BANDEKAR VS. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra), the Bombay High Court laid down as under (at pages 681 and 682 ) :

"...........................................................................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly even when there is some breach or omission, whether it can be fatal to the petition.

....................................................................................

This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition......."

(Emphasis supplied)

Thus, in SUVARN RAJARAM BANDEKAR case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen as to whether it can be fatal to the Winding up Petition.

In EMA INDIA LIMITED VS. TRACKPARTS OF INDIA LIMITED, [2001] 106 Company Cases 700 (Allahabad) (supra), a preliminary objection was raised that the Winding up Petition was not maintainable as it was contrary to Rule 21 of the Companies (Court) Rules, 1959 and Sri S.K. Nigam, who had verified the Winding up Petition, was neither a Director, Secretary or Principal Officer of the Petitioner-Company and, therefore, not competent to file the Winding up Petition. This Court rejected the preliminary objection and held as follows (at Pages 704 and 705 of the said Company Cases.):

" ............................................................

Learned counsel for the respondent-company has raised a preliminary objection regarding the maintainability of the petition on the ground that the same was not in accordance with rule 21 of the Companies (Court) Rules as Sri S.K. Nigam, who has filed the present petition on behalf of the petitioner was not competent to file the same as he is neither a director, secretary or the principal officer of the company. Along with the rejoinder affidavit, the petitioner has filed a copy of the resolution by which Sri P.K. Bhargava, the managing director of the petitioner was authorised to execute a power of attorney in favour of Sri S.K. Nigam, assistant general manager (import and export) for the purposes of filing the present company petition and to do all such acts and things as was necessary. The power of attorney executed by Sri P.K. Bhargava in favour of Sri S.K. Nigam is also on the record. Having considered the said documents and the submissions made by the parties, I am unable to hold that the present winding up petition has been filed by a person who was not authorised to do so or there has been any violation of the provisions of rule 21 of the Companies (Court) Rules. The preliminary objection, therefore, raised by learned counsel for the respondent is not tenable.

......................................................."

This decision relied upon by the learned counsel for the Petitioner-Company, is not relevant in the present case as it has not been disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit in support of the Company Petition, is an authorised person.

In SAND PLAST (INDIA) LTD. V. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Rajasthan), an objection was raised that the Affidavit filed in respect of the Winding up Petition was not in conformity with the provisions of the Companies Act, 1956 and the Rules made thereunder.

A Division Bench of the Rajasthan High Court laid down as under (at pages 483 and 484 of the said Rajasthan High Court):

" .........................................Likewise, rule 21, which provides for affidavit verifying a petition states that every petition shall be verified by an affidavit made by the petitioner and in case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof ; such affidavit shall be filed along with the petition and shall be in Form No.3. Whereas, in rule 18, which deals with affidavits and also prescribes procedure as to how the affidavit shall be drawn up. There is no form prescribed for the affidavits to be filed under the rules. Rule 21, which is undoubtedly statutory in nature and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be brushed aside. In our opinion, the affidavit filed in the present case, complies with the requirement of rule 21. In this case, the person who filed the affidavit in the winding up petition has disclosed the source of information on the basis of which he verified that the contents of the affidavit are believed to be true.

Rule 21 requires every petition for winding up of a company to be accompanied by an affidavit verifying the petition in Form No. 3. In our view, the defect if any, in the verification is only an irregularity in procedure, which can be cured at any stage of the proceedings. It is not an incurable defect as contended by Mr. Paras Kuhad. Even if there is a defect, an amendment of the petition and the affidavit can be permitted to be filed. The court, in our opinion, can in the ends of justice and in its inherent power allow the petitioner or a party to a proceeding to present an affidavit in support of the petition in terms of rule 21 and Form No.3. This power can be exercised if the affidavit originally filed with the petition did not conform to Form No.3. In our opinion, the affidavit filed with the company petition strictly conforms to rule 21 and the form prescribed, namely, Form No. 3. On the other hand, an affidavit filed under rule 18 shall be drawn up in the first person and shall state the full name, age, occupation, etc. An affidavit which is not in the prescribed form is of no value and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law and, therefore, it is liable to be rejected. Where an affidavit is filed under rule 18, the provisions of Order 19, rule 3 must be strictly observed and an affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.

In our opinion, rule 18 is of no application. The reliance sought to be placed by the appellant-company on rule 18 is misconceived since it deals with the affidavit in general, whereas, rule 21 deals with the requirement of an affidavit, i.e., to be filed in support of a substantive petition as in the instant case. In view of the fact that the affidavit sworn to by Shri Vivek Mazumdar verifying the winding up petition is in the prescribed form, the objections raised by the appellant are unsustainable."

(Emphasis supplied)

The Division Bench of the Rajasthan High Court further observed as under (at pages 488 and 489 of the said Company Cases) :

"Mr. Kuhad cited the case of Mool Chand Wahi's case [1986] 60 Comp Cas 198, wherein the Punjab and Haryana High Court held that the petition for winding up is required to be accompanied by an affidavit in due form and that if an affidavit is not in due form, no value can be attached to it. The Punjab and Haryana High Court was considering rules 11 (a), 18, 21 and Form No. 3 in that case.

In the appeal preferred, the Division Bench of the same High Court held that under rules 11(a), 18, 21 of the rules, a petition for winding up is required to be accompanied by an affidavit in a proper form and an affidavit which is not in due form is not valid. This judgment is reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H).

Learned counsel then relied on the case of Malhotra Steel Syndicate's case [1989] 65 Comp Cas 546 of the Punjab and Haryana High Court, Majithia J. has doubted the principles laid down in the aforementioned decisions. In para 9, the learned single judge has observed that, sitting singly, he is bound by the judgment reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H) and that he has got serious doubts about the correctness made in the judgment. The petition is liable to be rejected on the sole ground that the affidavit accompanying petition is not verified according to law. According to the learned Judge, it was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with rule 21 of the rules and irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. With respect to the learned judges of the Punjab and Haryuana High Court who rendered judgments reported in Mool Chand Wahi's case [1986] 60 Comp Cas 198 and Mool Chand Weahi's case [1986] 60 Comp Cas 402, we are unable to agree or subscribe with the proposition of law laid down by the said court. We have already held that an affidavit accompanying petition would not require compliance with rule 18 of the rules and rule 21 is the relevant rule and Form No.3 is the relevant from and no more. Another decision of the Punjab and Haryana High Court reported in Registrar of Companies, Punjab v. New Suraj Financers and Chit Fund Co. Pvt. Ltd. [1990] 69 Comp Cas 104, was cited. A learned single judge of the Punjab and Haryana High Court held (headnote):

"An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. Amendment of a petition for winding up, if allowed, relates back to the date of presentation of the petition. It would lead to a great deal of confusion if the petitioner were allowed to swear and supply a fresh affidavit at a later stage because rights of third parties would crop up.

Held, on the facts, that since the blanks indicating the numbers of the paragraphs in the affidavit filed in support of the petition had been left blank, it was not in accordance with law and the verification of the petition also could not be treated as being in accordance with law. The petition therefore, had to be dismissed."

For the reasons above mentioned, we are unable to agree with the proposition of law laid down by the learned single judge of the Punjab and Haryana High Court in this case."

(Emphasis supplied)

It will thus be seen that the Rajasthan High Court dissented from the view taken by the Punjab & Haryana High Court in various cases including Mool Chand Wahi case (supra) and Registrar of Companies, Punjab case (supra).

In view of the above, it is evident that independently of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position is the same as mentioned above.

In view of the aforesaid discussion, I am of the opinion that the aforementioned Company Application No. 72405 of 2004 (Paper No. A-10), filed on behalf of the Petitioner-Company, deserves to be allowed, and the same is, accordingly, allowed.

The prayer made in the said Application is granted. The Petitioner-Company is permitted to bring on record, the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure 'A' to the said Company Application (Paper No. A-10) and its supporting Affidavit, and it is directed that the said Affidavit, sworn on 13th April, 2004, will be read as being the Affidavit in support of the Company Petition.

In consequence of the above order, allowing the said Company Application (Paper No. A-10), the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9) (filed on behalf of the Respondent-Company) is liable to be dismissed, and the same is, accordingly, dismissed.

Dt. 07-12-2007/ak

Company Petition No. 46 of 2002/Resd.

Reserved

Company Petition No. 46 of 2002

M/s Paharpur Cooling Towers Ltd........................Petitioner

Versus

M/s Anuradha Masala Udhyog Pvt. Ltd. .................Respondent

*****

Hon'ble S.P.Mehrotra, J.

Order On

1-Company Application No. 73312 of 2004 (Paper No. A-9).

2-Company Application No. 72405 of 2004 (Paper No.A-10).

The aforementioned Company Petition No. 46 of 2002 has been filed by M/s Paharpur Cooling Towers Limited (Petitioner-Company), under Section 433 (e) read with Section 434 (1)(a) and Section 439 of the Companies Act, 1956, inter-alia, praying that the Respondent-Company, namely, M/s Anuradha Masala Udhyog Pvt. Lmt., having its Registered Office at 59/132-A, L-2-4, Akash Deep Building, Old Dalmandi, Nayaganj, Kanpur (U.P.) -208001 be wound up by this Court under the provisions of the Companies Act, 1956.

An Affidavit, sworn on 6th September, 2002 by Santosh John, stating himself to be an Officer in the Petitioner-Company, has been filed along with the said Company Petition.

On 10th September 2002, when the case was taken up, none appeared for the petitioner. Therefore, the Court by its order dated 10th September, 2002 directed that Company Petition be "put up tomorrow as a fresh matter before the appropriate Bench".

It further appears that by the order dated 12th September 2002, the Court permitted the Petitioner-Company to move Amendment Application for amending paragraph 1 of the Company Petition as the address of the Petitioner-Company for service of notice was mentioned, as that of its counsel at New Delhi.

The said order dated 12th September, 2002 is reproduced below :

"As prayed, list on 3rd October, 2002 to enable the petitioner to move amendment application for amending paragraph 1 of this petition, which states that the address of the petitioner for service of notice is of its counsel at New Delhi. Under the rules of the Court before filing any document or the Counter Affidavit its copy is required to be served on the other side and endorsement is to be obtained on the original, regarding receipt. It would be most unreasonable to expect the opposite party in response to the notice, if issued, to go to New Delhi to serve the copy of the Counter Affidavit."

It further appears that pursuant to the said order dated 12th September, 2002, an Amendment Application dated 30th September, 2002 (Paper No.A-5) was filed on behalf of the Petitioner-Company, inter-alia, praying for being permitted to amend Paragraph 1 of the Company Petition as also Prayer (b) in the Prayer Clause of the Company Petition.

By the order dated 3rd October 2002, the said Amendment Application dated 30th September, 2002 (Paper No. A-5) was allowed, and notice of the amended Company Petition was directed to be issued to the Respondent-Company. The said order dated 3rd October, 2002 is quoted below :

"Amendment Application dated 30-09-2002 is allowed, Necessary amendment may be incorporated in the original petition within three days. After amendment is in-corporated, notice of amended petition will be issued to the Respondent/ Company i.e. M/s Anuradha Masala Udhyog Pvt. Ltd. Notices will be made returnable at an early date."

It further appears that a Counter Affidavit, sworn on 12th October 2003, in reply to the said Company Petition was filed on behalf of the Respondent-Company.

The Petitioner-Company filed its Rejoinder Affidavit, sworn on 22nd November, 2003 (Paper No. A-12), in reply to the said Counter Affidavit filed in the main Company Petition.

It further appears that on 31st March, 2004, the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9), shown at Serial No. 1 above, was filed on behalf of the Respondent-Company.

It is, inter-alia, stated in the said Company Application (Paper No.A-9) that the Affidavit, filed in support of the Company Petition, is no Affidavit in the eyes of law, inasmuch as, the mandatory requirements of Rule 21 and Form 3 of the Companies (Court) Rules, 1959 have not been complied with; and that since there is no Affidavit in support of the Company Petition, as required by Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition, in this Form, is not maintainable and is liable to be dismissed.

It is, inter-alia, prayed in the said Company Application (Paper No. A-9) that the present Company Petition be dismissed as not maintainable.

An Affidavit, sworn on 30th March 2004, was filed in support of the said Company Application (Paper No. A-9).

By the order dated 31st March 2004, the Court, inter-alia, granted time to the learned counsel for the Petitioner-Company for filing reply to the said Application.

The said order dated 31st March, 2004 passed on the said Application (Paper No. A-9) is as follows :

"The present application has been filed today on behalf of the respondent-company.

Registry is directed to give appropriate number to the application.

Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted one week's time for filing reply to the present application. The respondent-company may file its Rejoinder Affidavit within another week thereafter.

List this case on 20-4-2004."

It further appears that on 17th April, 2004, the Petitioner-Company filed its Reply (Paper No.A-11) in reply to the Company Application (Paper No. A-9). The said Reply, filed on behalf of the Petitioner-Company, was accompanied by an Affidavit, sworn on 13th April, 2004.

It further appears that on 17th April, 2004, the Petitioner-Company also filed the aforementioned Company Application No. 72405 of 2004 (Paper No.A-10), shown at Serial No. 2 above, under Rules 6, 9 and 21 of the Companies (Court) Rules, 1959 read with Section 151 Code of Civil Procedure.

It is, inter-alia, stated in the said Application (Paper No. A-10) that the Affidavit filed on behalf of the Petitioner-Company in support of the Company Petition substantially complied with the requirements of Form 3 of the Companies (Court) Rules, 1959, but in order to put the controversy to rest, the Petitioner-Company seeks leave of this Court to file an additional Affidavit of Santosh John, who is working as Assistant Manager (Administration) with the Petitioner-Company, in support of the said Company Petition verbatim as prescribed in Form 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959.

An Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as an Assistant Manager with the Petitioner-Company, was filed along with the said Company Application (Paper No. A-10) in support of the said Application (Paper No.A-10).

Further, an Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as Assistant Manager (Administration) with the Petitioner-Company, was filed in Form No.3 as Annexure ''A' to the said Company Application (Paper No.A-10) and its supporting Affidavit.

It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file an Affidavit in the prescribed Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959 of Santosh John, Assistant Manager (Administration), which has been annexed as Annexure ''A' to the said Company Application (Paper No. A-10).

It further appears that on 10th May, 2004, a Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No. A-14), was filed on behalf of the Respondent-Company in reply to the aforesaid Reply (Paper No. A-11), filed on behalf of the Petitioner-Company.

Further, on 10th May, 2004, a Counter Affidavit, sworn on 30th April, 2004 (Paper No. A-13), was also filed on behalf of the Respondent-Company in reply to the aforesaid Company Application (Paper No.A-10), filed on behalf of the Petitioner-Company.

In the circumstances, the Court passed the following order on 10th May, 2004:

"Counter Affidavit has been filed today on behalf of the Respondent-Company in reply to Civil Misc. Application No. 72405 of 2004 (Paper No. A-10).

Sri Rajiv Nayan holding brief for Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted two weeks' time for filing Rejoinder Affidavit to the said Counter Affidavit.

Rejoinder Affidavit has been filed today on behalf of the Respondent-Company against the reply filed on behalf of the petitioner (Paper No.A-11) in respect of Civil Misc. Application No. 73312 of 2004 (Paper No. A-9) filed on behalf of the Respondent-Company.

List this case on 9-7-2004"

On 9th July, 2004, a Rejoinder Affidavit, sworn on 8th July, 2004, was filed on behalf of the Petitioner-Company in reply to the aforesaid Counter Affidavit (Paper No.A-13), filed on behalf of the Respondent-Company.

I have heard Sri Anil Sharma, learned counsel for the Respondent-Company and Sri Deepak Sabarwal, learned counsel for the Petitioner-Company at length in respect of the aforesaid Company Application No.73312 of 2004 (Paper No. A-9) as also the aforesaid Company Application No. 72405 of 2004 (Paper No. A-10), and perused the record.

Sri Anil Sharma, learned counsel for the Respondent-Company has made the following submissions :

1-Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition, presented by a body corporate, shall be verified by an Affidavit made by a Director, Secretary or other Principal Officer of such body corporate. The said Rule 21, inter-alia, further provides that the said Affidavit shall be filed alongwith the Company Petition and shall be in Form No.3.

2. It is not disputed that the Affidavit in support of the present Company Petition has been given by Santosh John who is a Principal Officer of the Petitioner-Company. However, verification of various paragraphs of the Company Petition has not been done as per the requirements of paragraph 2 of the Affidavit given in Form No.3 of the Companies (Court) Rules, 1959.

It is pointed out that paragraph 2 of the Affidavit, given in Form No. 3 of the Companies (Court) Rules, 1959, makes it obligatory upon the deponent of the Affidavit to state as to which paragraphs of the Company Petition are true to his personal knowledge and which paragraphs of the Company Petition are based on information. This mandatory requirement has not been complied with in the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition.

Consequently, the said Affidavit filed in support of the present Company Petition is no Affidavit in the eyes of law. As there is no Affidavit in support of the present Company Petition as per the requirements of Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition is not maintainable and is liable to be dismissed, as prayed for in the said Company Application (Paper No. A-9).

3. In a Winding up Petition, if the supporting Affidavit is not in Form No.3, then there is no Winding up Petition before the Court. This is because, the statement made in the Winding up Petition must be supported by an Affidavit in Form No. 3, as provided in Rule 21 of the Companies (Court) Rules, 1959.

4. The Petitioner-Company has taken contradictory stand in its Reply (Paper No. A-11). On the one hand, the Petitioner-Company maintains that the Affidavit filed in support of the present Company Petition substantially complied with all the requirements of Form No. 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company sought permission /opportunity to file a fresh Affidavit in support of the present Company Petition in accordance with the relevant Rule and Form as per the provisions of the Companies (Court) Rules, 1959.

Reference is made to paragraphs 3 and 4 of the preliminary objections and paragraph 6 of the Reply on merits, as contained in the said Reply (Paper No. A-11) filed on behalf of the Petitioner-Company.

5. Section 441 of the Companies Act, 1956, inter-alia, provides that the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up. Therefore, the date of presentation of the Petition for the winding up, duly supported by an Affidavit, as required by the Companies (Court) Rules, 1959, is the material date.

As such, it is not open to the Petitioner-Company to file an Affidavit subsequent to the presentation of the Petition for the winding up. The Affidavit in proper Form must accompany the Petition for the winding up. Subsequently, the Petitioner-Company cannot be permitted to file an Affidavit in Form No. 3. Once, the Petition for the winding up is presented, then at no stage, the Petitioner-Company can be permitted to file an Affidavit in Form No. 3.

6. It is pointed out that the winding up order relates back to the date of presentation of Winding up Petition. In case, permission is granted to file an Affidavit in Form No.3 subsequent to the presentation of the Winding up Petition, then various difficulties/ complications would arise.

It is submitted that a proper Affidavit must accompany the Winding up Petition at the time of presentation of the Petition. In case, proper Affidavit is not filed with the Winding up Petition when presented, the Petition would be a defective Petition. Such a Petition would be no Petition in the eyes of law.

Now if the defect in the Winding up Petition is permitted to be removed subsequently by permitting the petitioner to file a fresh Affidavit then the Winding up Petition would be deemed to be presented on the date of removal of such defect.

This will result in various difficulties / complications. For example, the Company in question, may transfer its assets during the period between the date of presentation of the Winding up Petition and the date of filing of subsequent Affidavit, and may contend that such transfer cannot be assailed on the ground of fraud as there was no Winding up Petition pending in the eyes of law on the date of such transfer.

Similarly, during the period between the date of presentation of Winding up Petition and the date of filing of subsequent Affidavit, the debt on the basis of which the Winding up Petition has been filed, may become time-barred. Now the Winding up Petition cannot be filed on the basis of such time-barred debt. Permitting the petitioner to file subsequent Affidavit will result in the entertainment of the Winding up Petition on the basis of such time-barred debt.

It is also pointed out that under Section 447 of the Companies Act, 1956, the winding up order operates in favour of all the creditors and of all the contributories of the Company as if it had been made on the joint Petition of a creditor and of a contributory.

In case, permission is granted to file Affidavit subsequently, further complications would arise in view of the provisions of Section 447 of the Companies Act, 1956.

7. Sri Sharma has placed reliance on the following decisions:

(i)- In the matter of Gaya Textiles Private Ltd. etc. and Star Textile Engineering Works Ltd., AIR 1968 Calcutta 388 (Paragraphs 4, 5, 11 and 12).

(ii)- Mool Chand Wahi vs. National Paints Pvt. Ltd. & another, [1986] 60 Company Cases 198 (P. and H.), which was a decision by a learned Single Judge of the Punjab and Haryana High Court.

(iii)- Mool Chand Wahi vs. National Paints (Pvt.) Ltd. & another, [1986] 60 Company Cases 402 (P. and H.), wherein a Division Bench of the Punjab and Haryana High Court affirmed the aforesaid decision of the learned Single Judge in Mool Chand Wahi case (supra).

(iv)- Registrar of Companies, Punjab Vs. New Suraj Financiers and Chit Fund Co. (P) Ltd., [1996] 4 Company Law Journal 308 (P & H) :[1990] 69 Comp Cases 104 (P. & H.).

In reply, Sri Deepak Sabarwal, learned counsel for the Petitioner-Company has made the following submissions:

1. It is not disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit filed along with the Company Petition, was authorised to swear Affidavit on behalf of the Petitioner-Company.

The objection raised on behalf of the Respondent-Company is only in regard to the Form of the said Affidavit, namely, verification of the contents of the Company Petition as contained in paragraph 2 of the said Affidavit.

Reference in this regard is made to paragraph 9 of the Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No.A-14), filed on behalf of the Respondent-Company.

In the said paragraph 9 of the Rejoinder Affidavit, it is, inter-alia, stated as follows ".......It is no where stated by the Respondent-Company that Sri Santosh John was not authorised."

2. Three questions arise for consideration in the present case:

(A) If the Affidavit in support of the Winding up Petition is not para-materia with the prescribed Form No.3, is the Winding up Petition liable to be dismissed ? In other words, whether strict compliance with Form No.3 is necessary or substantial compliance with Form No.3 would suffice ?

(B) Is the prescription in Form No.3 mandatory in nature ? In other words, whether non-compliance with Form No. 3 is an illegality, or is a mere irregularity ?

(C ) In case, the Affidavit filed in support of the Winding up Petition is found to be defective on account of non-compliance with Form No. 3, whether fresh opportunity should be given to rectify the defect ?

Answering the above questions, it is submitted :

(A)Substantial compliance, and not strict compliance, with Form No.3 is necessary.

(B)In case, there is any non-compliance with Form No. 3, the same is a mere irregularity.

(C)In case, the Affidavit is found to be defective on account of non-compliance with Form No.3, then opportunity should be given to rectify the defect.

Reliance in this regard is placed on the decision of the Apex Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., 1993 Supp. (3) Supreme Court Cases 565.

3. In view of the aforementioned Supreme Court decision in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd. case (supra), overruling the Division Bench decision of the Punjab and Haryana High Court, the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), relied upon by the learned counsel for the Respondent-Company, stood overruled.

Similar will be the fate of the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra) wherein the Division Bench decision of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) was relied upon.

Further, the decision of the Calcutta High Court in Gaya Textiles case (supra), relied upon by the learned counsel for the Respondent-Company, also stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) followed the said decision of the Calcutta High Court in Gaya Textiles case(supra).

Reference is further made to the decision of the learned Single Judge of the Punjab & Haryana High Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Limited, [1989] 65 Company Cases 546 (P. & H.) which was challenged before the Division Bench of the Punjab & Haryana High Court. Against the decision of the Division Bench of the Punjab & Haryana High Court, Appeal was filed before the Supreme Court which was decided by the Supreme Court by its aforementioned decision reported in 1993 Supp.(3) SCC 565.

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in his decision in Malhotra Steel Syndicate case (supra) expressed his doubt about the correctness of the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra).

4. The submissions made under heads (2) and (3) above are supported by the following decisions, wherein the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed :

(i)DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj.).

(ii)WELDING RODS PVT. LTD. Vs. INDO BORAX AND CHEMICALS LTD.,[2002] 108 Company Cases 747 (Guj.).

It is further submitted that the following decisions further support the submissions made under heads (2) and (3) above :

(1)MRS.ROMA DEB AND OTHERS Vs. R.C.SOOD & CO. PVT. LTD., [1990] 67 Company Cases 350 (Delhi).

(2)D & H SECHERON ELECTRODES (P) LTD. Vs. VOLTARE ELECTRODES (P) LTD., [1997] 89 Company Cases 592 (A.P.).

(3)SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.).

(4)EMA INDIA LIMITED Vs. TRACKPARTS OF INDIA LTD., [2001] 106 Company Cases 700 (All.).

(5)G.K.W. LTD. Vs. SHRIRAM BEARINGS LTD., [2002] 109 Company Cases 636 (Delhi).

(6)SAND PLAST (INDIA) LTD. Vs. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Raj.).

5. In view of the decisions referred to in head (4) above, it is evident that

(a) Defect in Affidavit is only an irregularity which may be cured at any stage.

(b) Opportunity to file proper Affidavit can be given subsequently.

(c) Such Affidavit filed subsequently relates back to the date of presentation of the Winding up Petition.

6. As regards the difficulties / complications mentioned by Sri Anil Sharma, learned counsel for the Respondent-Company on the basis of the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), it is submitted that the said decisions stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

Further, the fresh Affidavit filed subsequently would relate back to the date of presentation of the Winding up Petition, and, therefore, the Winding up Petition would be deemed to have been validly presented on the date of its original presentation. As such, the difficulties / complications mentioned by Sri Anil Sharma would not arise.

In Rejoinder, Sri Anil Sharma, learned counsel for the Respondent-Company has reiterated the submissions made by him earlier.

Besides, Sri Sharma has made the following further submissions:

1- In the Supreme Court decision in Malhotra Steel Syndicate case (supra), there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

Therefore, the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

Reliance in this regard is placed on the following decisions :

(i)KRISHENA KUMAR Vs. UNION OF INDIA AND OTHERS, AIR 1990 Supreme Court 1782.

(ii)STATE OF U.P. & ANOTHER Vs. SYNTHETICS & CHEMICALS LTD. & ANOTHER, [1991] INSC 160; (1991) 4 SCC 139.

(iii)GOVERNMENT OF INDIA Vs. WORKMEN OF STATE TRADING CORPORATION & OTHERS, (1997) 11 SCC 641.

(iv)ISLAMIC ACADEMY OF EDUCATION & ANOTHER Vs. STATE OF KARNATAKA & OTHERS, 2003(6) Supreme Court Today 303 : A.I.R. 2003 SC 3724 : (2003) 6 SCC 697.

(v) STATE OF BIHAR Vs. KALIKA KUER @ KALIKA SINGH AND OTHERS, JT 2003 (4) SC 489 : AIR 2003 SC 2443.

2. A perusal of Form No.3 of the Companies (Court) Rules, 1959 shows that the Affidavit has to be in four parts :

A-Name and other details of the deponent.

B-Paragraph 1 of the Affidavit in regard to the designation and authorization of the deponent.

C-Paragraph 2 of the Affidavit containing verification of the paragraphs of the Company Petition.

D-Verification of the Affidavit.

In Malhotra Steel Syndicate case (supra), the defect was only in the verification clause of the Affidavit, i.e. Part ''D' above. The Supreme Court was of the opinion that the said defect was "slight defect or irregularity", and "the appellant should have been given an opportunity to rectify the same."

Therefore, it is only when there is "slight defect or irregularity" in the affidavit, that opportunity should be given to rectify the same.

It is submitted that in Malhotra Steel Syndicate case (supra), there was imperfect verification of the Affidavit (i.e. Part ''D' above), which was held to be "slight defect or irregularity".

On the other hand, in the present case, the defect is in the verification of the contents of the Company Petition as per the requirements of paragraph 2 of the Affidavit contained in Form No.3 (i.e. Part ''C' above).

There is no mention of the paragraphs of the Company Petition in paragraph 2 of the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition. There is no mention as to which paragraphs of the Company Petition are true on personal knowledge and which paragraphs are based on information, received from the company records etc. Such defect in the Affidavit is a material defect.

Such defect in the Affidavit cannot be said to be a "slight defect or irregularity".

`Therefore, the Supreme Court decision in Malhotra Steel Syndicate case (supra) is not applicable to the present case.

In view of the submissions made by Sri Anil Sharma, learned counsel for the Respondent-Company, in rejoinder, in regard to the Supreme Court decision in Malhotra Steel Syndicate case (supra), Sri Deepak Sabarwal, learned counsel for the Petitioner-Company was given opportunity to make further submissions in regard to the said point raised by Sri Anil Sharma, learned counsel for the Respondent-Company.

Sri Sabarwal has made the following further submissions :

1- The judgment of the Supreme Court is binding on all Courts including the High Courts of the country in view of the provisions of Article 141 of the Constitution of India. It is not open to any High Court to say that since certain aspects were not considered in the Supreme Court judgment, so the judgment of the Supreme Court is not binding. If the Supreme Court proceeds to decide the case on one aspect, then it is not open to any High Court to say that the judgment of the Supreme Court is not binding, as other aspects were not considered by the Supreme Court. Even if certain aspects were not examined by the Supreme Court in its judgment, it cannot be said that the judgment of the Supreme Court is not binding.

It is submitted that in view of the above legal position, even if the submission of the learned counsel for the Respondent-Company that the Supreme Court in Malhotra Steel Syndicate case (supra) did not notice certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959, were to be accepted, still the said Supreme Court decision will not loose its binding force on this Court. It is not open to this Court to say that the said decision of the Supreme Court is not binding in view of the said submission made by the learned counsel for the Respondent-Company.

Reliance in this regard has been placed on the following decisions :

(i)UNION OF INDIA Vs. FIRM RAM GOPAL HUKUM CHAND & OTHERS, A.I.R. 1960 All. 672.

(ii)RAM MANOHAR LOHIA & OTHERS Vs. STATE OF UTTAR PRADESH AND OTHERS, A.I.R.1968 All. 100.

(iii)BALLABHADAS MATHURADAS LAKHANI & OTHERS Vs. MUNICIPAL COMMITTEE, MALKAPUR, A.I.R. 1970 Supreme Court 1002.

(iv)T. GOVINDARAJA MUDALIAR ETC. Vs. THE STATE OF TAMIL NADU & OTHERS, [1973] INSC 1; (1973) 1 SCC 336.

(v)AMBIKA PRASAD MISHRA Vs. STATE OF UTTAR PRADESH & OTHERS, A.I.R.1980 Supreme Court 1762.

(vi)ANIL KUMAR NEOTIA & OTHERS Vs. UNION OF INDIA & OTHERS, A.I.R. 1988 Supreme Court 1353.

(vii)SUGANTHI SURESH KUMAR Vs. JAGDEESHAN, (2002) 2 SCC 420.

2. The decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not per in-curium, as submitted by the learned counsel for the Respondent-Company.

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the Petition was not in proper Form and that the Petition could not be entertained.

Having noticed the facts of the case, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was some slight defect or irregularity in the Affidavit, "the appellant should have been given an opportunity to rectify the same".

It is submitted that the Supreme Court considered the facts of the case as emerging from the impugned judgment of the Division Bench of the Punjab and Haryana High Court, and concluded that the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court has further laid down the law that even if there is defect in the Affidavit, filed in support of the Application for winding up, an opportunity should be given to rectify the same.

This is the ratio of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra). Even if certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 are not specifically mentioned in the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), it cannot be concluded that the said provisions were not considered by the Supreme Court while arriving at its decision as contained in the said judgment.

In any case, merely because the said provisions have not been specifically referred to in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), it will not take away the binding effect of the said decision nor can the decision be described as per in-curium.

It is submitted that mere non-mention of certain provisions in the decision of the Supreme Court will not take away its binding force, particularly when the said decision has been followed by certain High Courts.

3. The decisions relied upon by the learned counsel for the Respondent-Company in support of his plea of per in-curium, are distinguishable, and the same are not applicable to the facts and circumstances of the present case.

In reply to the above further submissions made by Sri Deepak Sabarwal, learned counsel for the Petitioner-Company, Sri Anil Sharma, learned counsel for the Respondent-Company reiterated his earlier submissions regarding the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per in-curium.

Sri Sharma has made the following further submissions :

(i)Reasoning of the learned Single Judge of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) and the reasoning of the Division Bench of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) have not been dealt with by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

(ii)Even if the Supreme Court judgment in Malhotra Steel Syndicate case (supra) has been followed by certain High Courts, the said fact will not debar the Respondent-Company from raising the plea that in view of the correct legal position, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

I have considered the submissions made by the learned counsel for the parties, and perused the record.

Two main questions which arise in the present case, are :

1-Whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective ?

2-If the said Affidavit filed in support of the Company Petition is held to be defective, should the petitioner be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company ?

Let us consider the afore-mentioned Question No.1, namely, as to whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective.

In order to decide this question, it is necessary to refer to Rule 21 of the Companies (Court) Rules, 1959, as well as Form No.3 contained in Appendix I to the said Rules.

The said Rule 21 is as follows :

"R.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 the case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof, such affidavit shall be filed 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."

The said Form No. 3 is reproduced below :

Form No.3

[See rule 21]

[Heading as in Form No.1]

Company Petition No.............. of 19..

Affidavit verifying petition.

I, A.B., son of .....................aged ........residing at .......................

......................... do, solemnly affirm and say as follows :-

1. I am a director/secretary/............... of ............. Ltd., the petitioner in the above matter *(and am duly authorised by the said petitioner to make this affidavit on its behalf.)

[Note.--This paragraph is to be included in cases where the petitioner is the company.]

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.

*Note.- To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

__________________

It is true that the Companies (Court) Rules, 1959 are statutory in nature, and the Forms prescribed in Appendix I to the said Rules should be adopted having regard to the nature of proceedings. However, in my opinion, what is required is substantial compliance with the Forms prescribed in the said Appendix I to the said Rules. Literal compliance with the said Forms, in my view, cannot be insisted upon.

Whether there has been substantial compliance with the Forms prescribed under the said Rules will depend upon the facts and circumstances of each case and the nature of proceedings in question.

In this connection, it is pertinent to refer to Rule 17 of the Companies (Court) Rules, 1959, which is as follows :

"R.17. Forms.--The forms set forth in Appendix I, where applicable, shall be used with such variations as circumstances may require."

(Emphasis supplied)

Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition must be verified by an Affidavit made by the petitioner or by one of the petitioners, where there are more than one, and in the case, the Petition is presented by a body corporate, by a Director, Secretary or other Principal Officer thereof. Rule 21 further provides that such Affidavit shall be filed along with the Company Petition and shall be in Form No.3.

Proviso to Rule 21 lays down 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.

Therefore, in view of the said Rule 21, it is necessary that the Company Petition must be verified by an Affidavit, which is to be in Form No.3. The Affidavit is to be made by such person as is mentioned in the said Rule 21. The Affidavit is required to be filed along with the Company Petition.

Thus, the Affidavit verifying the Company Petition is required to be in Form No.3. However, as held above, what is required is substantial compliance with the said Form No.3, and not literal compliance. Whether there has been substantial compliance with Form No.3, will depend on the facts and circumstances of each case and the nature of proceedings in question.

The said conclusion is supported by the decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra).

It was laid down by the Bombay High Court as follows (at page 681 of the said Company Cases) :

"................................................... ........................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition."

It was further held as under (at page 682 of the said Company Cases):

".................................................. This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition."

Thus, in Suvran Rajaram Bandekar case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen whether it can be fatal to the Petition.

The said decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR case (supra) was followed by the Gujarat High Court in DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj) (at pages 471- 472).

Keeping in view the above legal position, let us consider the present case.

As noted above, the present Company Petition is a Petition, inter-alia, praying for winding up the Respondent-Company. An Affidavit, sworn on 6th September, 2002 by Santosh John, has been filed in support of the Company Petition.

The question is as to whether the said Affidavit filed in support of the Company Petition substantially complied with the requirements of Form No.3 prescribed in Appendix I to the Companies (Court) Rules, 1959.

In order to consider this question, it is necessary to reproduce the relevant portion of the said Affidavit of Santosh John, which is as follows :

"IN THE MATTER OF :-

M/s Paharpur Cooling Towers Ltd. ... Petitioner

Versus

M/s Anuradha Masala, Udhyog Pvt. Ltd. ...... Respondent

AFFIDAVIT

I, Santosh John, S/o Sh. C.V. Yohannan, Age about 29 years, working as an Officer with the plaintiff Company, do hereby solemnly affirm and declare as under:

1.That I am working as an Officer in the aforesaid company and as such am well conversant with the facts of the present case and able to depose about the same.

2.That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433 (e) read with Section 434 (1) (a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief.

Sd.

DEPONENT

VERIFICATION

Verified at New Delhi on this 6 day of Sept, 2002 that the contents of para 1 and 2 of the above affidavit are true and correct to my knowledge. No part of it is incorrect and nothing material has been concealed therefrom."

As is evident from the submissions made by the learned counsel for the parties, it is not disputed by the Respondent-Company that Santosh John, who has sworn the said Affidavit in support of the Company Petition, is an authorized person.

The dispute is in regard to paragraph 2 of the said Affidavit wherein the contents of the Company Petition have been verified.

Paragraph 2 of the Affidavit given in Form No.3, contained in Appendix I to the Companies (Court) Rules, 1959, inter-alia, requires that it should be stated that "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."

Therefore, in view of paragraph 2 of the Affidavit given in Form No.3, the verification of the Company Petition must be done by specifying paragraphs of the Company Petition. There should be specification as to which paragraphs of the Company Petition are true to the knowledge of the deponent and as to which paragraphs of the Company Petition are based on information.

In the present case, paragraph 2 of the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, reads as follows :

"That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433(e) read with Section 434 (1)(a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief."

Therefore, in paragraph 2 of the said Affidavit, sworn by Santosh John, there is no mention of paragraph numbers of the Company Petition. There is no specification of paragraph numbers, which are true to the knowledge of the said Santosh John, nor is there any specification of paragraph numbers, which are based on information.

There is merely general verification of the contents of the Company Petition without any mention of even paragraph numbers of the Company Petition. Further, the contents of the Company Petition have been stated to be "true and correct to my knowledge and belief". There is no separate specification of the paragraph numbers which are true to the knowledge of the said Santosh John and the paragraph numbers, which are based on information.

In my opinion, such verification of the contents of the Company Petition cannot be said to be substantial compliance of the requirements of the Affidavit as prescribed in Form No.3 contained in Appendix I to the Companies (Court) Rules, 1959.

The said Affidavit of Santosh John filed in support of the Company Petition, therefore, does not substantially comply with the requirements of Form No.3 given in Appendix I to the Companies (Court) Rules, 1959. The said Affidavit of Santosh John is evidently a defective Affidavit.

The said conclusion is supported by various judicial decisions.

In PADMABATI DASI Vs. RASIK LAL DHAR, (1910) I.L.R. 37 Cal. 259, a Division Bench of the Calcutta High Court consisting of Jenkins, C.J. and Woodroffe J. held as under (at page 261 of the said I.L.R.) :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order XIX, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it would be safe to act on the deponent's belief."

(Emphasis supplied)

The above observations of the Calcutta High Court were endorsed by their Lordships of the Supreme Court in State of Bombay Vs. Purushottam Jog Naik[1952] INSC 35; , A.I.R. 1952 SC 317.

Their Lordships of the Supreme Court observed as follows (paragraph 16 of the said A.I.R.) :

"(16) We wish, however, to observe that the verification of the affidavits produced here is defective. The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally. The verification however states that everything was true to the best of his information and belief. We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit. Verification should invariably be modelled on the lines of Order 19, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not. And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed. We draw attention to the remarks of Jenkins C.J. and Woodroffe J. in PADMABATI DASI v. RASIK LAL DHAR, 37 Cal 259 and endorse the learned Judges' observations."

(Emphasis supplied)

In Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406, it was held as under (paragraphs 16 and 17 of the said A.I.R.) :

"(16) Order19, Rule 3 (1) of the Code of Civil Procedure requires :

"Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated"

In no affidavit has the petitioner said which part was based on information and which on belief. Nowhere he has divulged the source of his information or the grounds of his belief. Where the matter deposed to is not based on personal knowledge but on information, the sources of information ought to be clearly disclosed. The petitioner's several affidavits infringe the provisions of Order 19, Rule 3, when they should have been strictly observed. Such affidavits being violative of the requirements of the mandatory provisions of law, deserve to be ignored. The words that the contents of the affidavit "are true and correct to the best of my knowledge and belief" carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless."

"(17) In Padmabati Dasi v. Rasik Lal Dhar (1910) ILR 37 Cal. 259, Jenkins C.J. and Woodroffe J. observed :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, Rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to Judge whether it would be safe to act on the deponent's belief."

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is a catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Naein Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy, AIR 1956 Cal 496 and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101"

(Emphasis supplied)

In view of the above legal position, it is evident that the said Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition is a defective Affidavit.

As the said Affidavit filed in support of the Company Petition has been held to be defective, let us now consider Question No.2, namely, as to whether the petitioner should be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Before proceeding to consider this question, it is necessary to consider the submission made by the learned counsel for the Respondent-Company that the Petitioner-Company has taken contradictory stand. It is submitted that on the one hand, the Petitioner-Company maintains that the Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition substantially complied with all the requirements of Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company has sought permission / opportunity to file a fresh Affidavit in Form No.3, being the Affidavit, sworn by Santosh John on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Having considered the said submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

It is open to the Petitioner-Company to take alternative pleas.

The First Plea of the Petitioner-Company is that the Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition, was not defective, as there was substantial compliance with the requirements of Form No.3.

The Second Plea of the Petitioner-Company, in the alternative, is that if the said Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition, is held to be defective, then the Petitioner-Company be permitted to bring on record the said fresh Affidavit, sworn on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

In my opinion, it is open to the Petitioner-Company to take alternative pleas, as mentioned above. There is no question of any contradictory stand being taken by the Petitioner-Company, as submitted by the learned counsel for the Respondent-Company.

Coming now to the aforementioned Question No.2, it is necessary to examine the legal position as emerging from various decisions cited by the learned counsel for the parties.

In Gaya Textiles case, AIR 1968 Cal 388 (supra), the Winding up Petition was not verified by an Affidavit but by a declaration made before a Notary Public at Bombay on December 24, 1965.

The Calcutta High Court held that the verification was defective. It was further held that leave to re-verification of the Winding up Petition could not be granted as the same would lead to various complications, as mentioned in the decision.

The relevant portion of the said decision of the Calcutta High Court is reproduced below (paragraphs 6, 11 and 12 of the said AIR) :

"(6) Learned counsel for the petitioner however, contended that the defect in the verification of the petition was a mere irregularity which should be overlooked, and leave should be granted to the petitioner to re-verify the petition according to the rules. In support of this contention, learned counsel for the petitioner firstly relied upon a decision of the Allahabad High Court reported in AIR 1925 All 79 in which it was held that a plaint was not void merely because it did not contain the verification clause as required by the Code and that the omission to verify was a mere irregularity which could be cured even at a later stage and such a plaint therefore, should be deemed to be presented on the date of actual presentation and not on the date of its verification. It was also held that merely on the ground of such defect the plaint could not be treated as altogether invalid. This case, to my mind, has no application as I am not concerned with a defective verification of a plant, but with the verification of a winding up petition to which entirely different considerations apply. Besides, it cannot be overlooked that allegations in the plaint can be acted upon only upon proof of the same by evidence or upon admission by the defendant. The allegations in a petition, on the other hand, are to be treated by the Court as evidence without any further proof.

(11) Had this not been a petition for winding up a Company, I would have already accepted the contentions of the learned counsel for the petitioner. But it cannot be overlooked that the present petition is a petition for winding up of a Company and a winding up order relates back to the date of the presentation of the winding up petition. If on the date when the petition was presented there was no proper verification according to law, then there was no petition at all on which the Court could issue directions for advertisement. Secondly, if leave is granted to cure the verification today, then a proper petition for winding up of the Company would come into existence as from today, and in that event the question of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when the Court grants the Company leave to re-verify the petition would also create a good deal of confusion. Since a winding up order relates back to the date of presentation of the winding up petition, all dealings by the Company with its assets would be subject to the rules relating to fraudulent preference and transactions are liable to be set-aside on the ground that the Company had unlawfully dealt with its assets in order to deprive its creditors. But if leave is granted to the petitioner to cure the defect in the verification by allowing re-verification of the petition according to the rules today, it would be open to the Company to contend, if a winding up order is made, that the rules relating to fraudulent preference or unlawful dealing with the assets from the date of presentation of the winding up petition would not apply, as a petition properly verified according to law came into existence only on the date on which leave was granted to the petitioner to re-verify the petition.

(12). There is, however, another matter to be considered in connection with the defective verification of a winding up petition. In the event of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when a valid petition comes into existence after re-verification of the same, third parties may acquire rights in the Company's assets, which, it will be difficult to assail or set aside. For these reasons, verification of a winding up petition must strictly comply with the rules for verification of the same. The petition with which I am concerned in this application being a petition for winding up of a Company the principles discussed in the several decisions cited by the learned counsel for the petitioner are not attracted and do not assist the petitioner. Counsel for the petitioner admitted, and I think rightly, that the verification was defective and the Court could not make an order for winding up on this petition, and it was for that reason that he asked for leave to re-verify the petition. That being the position, in my opinion, re-verification of a winding up petition cannot be allowed, particularly because in this case the verification appears to have been done before a notary public, who under the rules is not an officer before whom a petition could be verified under the rules of this Court as also under the Companies (Court) Rules, 1959. For the reasons mentioned above, the Court cannot proceed to make an order on the present petition nor can the Court give leave to the petitioner to re-verify the petition in conformity with the rules. In the circumstances, this application is dismissed with costs. Certified for counsel."

(Emphasis supplied)

In Mool Chand Wahi case, [1986] 60 Company Cases 198 (P & H) (supra), the Winding up Petition was accompanied by an Affidavit. In the verification clause of the Affidavit, paragraphs 1 to 14 of the Affidavit were shown to have been "true and correct to the best of the deponent's knowledge and belief". There was no delineation as to which paragraphs of the Affidavit were correct to the best of his knowledge and which paragraphs of the Affidavit were correct to the best of his belief.

The learned Single Judge of the Punjab and Haryana High Court referred to the provisions of Rules 11 (a), 18 and 21 of the Companies (Court) Rules, 1959 and the provisions of Order 19, Rule 3 of the Code of Civil Procedure as also the decision of the Punjab & Haryana High Court in Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406 (supra).

It was concluded that the verification of the Affidavit, filed in support of the Company Petition, was not proper, and as such, the Winding up Petition was liable to be dismissed on the ground that it was not accompanied by a proper Affidavit.

The learned Single Judge of the Punjab and Haryana High Court pointed out that in case a properly sworn Affidavit was allowed to be filed subsequently, the same would lead to a great deal of confusion regarding the rights of the third parties. Reliance was placed on the decision of the Calcutta High Court in Gaya Textiles case (supra).

The relevant portions of the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) are reproduced below (at pages 201, 202 and 203 of the said Company Cases) :

"I have duly considered the argument of the learned counsel. Rule 11 (a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned at Serial No. 15 in the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Paragraph 2 of the Form reads as follows :

"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."

Rule 18 says that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code or by the rules and practice of the court. Order 19, rule 3 of the Code of Civil Procedure says that affidavits shall be confined to such facts as the deponent is able to prove from his own knowledge except on interlocutory applications, on which statements of his belief may be admitted. From the aforesaid rules, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form. It is well settled that if an affidavit is not in due form, no value can be attached to it. In the above view, I am fortified by the observations in Bhupinder Singh's case, AIR 1968 P & H 406, wherein Tek Chand J., after noticing Order 19, rule 3(1) of the Code, observed as follows (p.410) :

"The words that the contents of the affidavit '' are true and correct to the best of my knowledge and belief' carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless".

In Padmabati Dasi v. Rasik Lal Dhar [1910] ILR 37 Cal 259, Jenkins C.J. and Woodroffee J. observed :

''We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.'

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Nalin Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy Singha, AIR 1956 Cal 496, and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101."

The learned Judge, in view of the fact that the verification of the affidavit was not proper, ignored the affidavit filed by the petitioner in that case. In a petition for winding-up, it is mandatory to file an affidavit along with the petition. The purpose of the affidavit is that the allegations in the affidavit read with the petition are treated as substantive evidence. In case the petition is not accompanied by an affidavit, in view of the rules mentioned above, it is no petition in the eye of law and consequently it is liable to be dismissed on this ground alone. The main reason is that the petition for winding-up, if accepted, relates back to the date of its presentation. In case a properly sworn affidavit is allowed to be filed subsequently, the question will arise as to whether the winding-up petition would relate back to the date of presentation of the petition or the affidavit and in many cases a great deal of confusion regarding the rights of the third parties would crop up. In that regard, the following observations in Gaya Textiles P. Ltd., In re, AIR 1968 Cal 388, be read with advantage (pp.390, 391):

..............................................................."

(Emphasis supplied)

Having laid down the above proposition, the learned Single Judge of the Punjab & Haryana High Court dismissed the Winding up Petition on the ground that it was not accompanied by a proper Affidavit.

Against the said decision of the learned Single Judge of the Punjab & Haryana High Court, Company Appeal under Section 483 of the Companies Act, 1956 was filed before the said High Court.

A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal by its decision reported in Mool Chand Wahi Vs. National Paints (Pvt.) Ltd. and another, [1986] 60 Company Cases 402 (P & H) (supra) .

The Division Bench of the Punjab & Haryana High Court rejected the submission made on behalf of the Petitioner-Appellant that he should have been allowed to file a fresh Affidavit in support of the Company Petition, and upheld the said decision of the learned Single Judge of the Punjab & Haryana High Court. The Division Bench of the Punjab & Haryana High Court held as under (at Pages 403- 404 of the said Company Cases) :

"........................................................ The Company Petition was accompanied by an affidavit dated February 20, 1980, which was not in proper form. In its verification clause, paras 1 to 14 of the affidavit were mentioned to have been true and correct to the best of the deponent's knowledge and belief. The appellant in accordance with law was required to specify which paragraphs of the affidavit were correct to the best of his knowledge and which were correct to his belief. Rule 11(a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned in sub-rule (15) of the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in form No.3, which, in turn, prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Rule 18 lays down that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code of Civil Procedure (hereinafter called "the Code") or by the rules and practice of the court. Order XIX, rule 3 of the Code lays down the matters to which the affidavit shall be confined. Mr. Ratta also admits that where a petition for winding up is not supported by an affidavit, the same is liable to be dismissed.

He, however, submits that the verification of an affidavit is a matter of form and he should have been allowed to file a fresh affidavit and the petition should not have been dismissed for want of proper verification of the affidavit. He placed reliance on Manohar Narayan Joshi v. Ramu Mhatang Patel, AIR 1973 Bom.105.

We do not find any force in this contention. Going through the judgment of the learned Single Judge, we find that the law on the point has been elaborately discussed and as a result an imperative conclusion has been reached that the petition has had to be dismissed as it was not accompanied by a proper affidavit. An affidavit which is not in due form is of no value. An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. The learned Single Judge rightly rejected the appellant's prayer to file a fresh affidavit properly sworn in for the reason that if the amendment of a petition for winding up is allowed, it relates back to the date of its presentation. It would lead to a great deal of confusion if the appellant is allowed to swear in and supply a fresh affidavit at a late stage because rights of third parties would crop up.

Manohar Narayan Joshi's case, AIR 1973 Bom 105, was rightly distinguished by the learned Single Judge as it adjudicated on the question whether or not a petitioner in an election petition under the Representation of the People Act should be allowed to amend the affidavit accompanying it. An affidavit in support of an election petition is not intended to be treated as evidence of the facts stated therein because it is ultimately to be decided on the evidence recorded by the High Court."

(Emphasis supplied)

In Malhotra Steel Syndicate case, [1989] 65 Company Cases 546 (P. & H.) (supra), a learned Single Judge of the Punjab and Haryana High Court was dealing with the submission made by the learned counsel for the Respondent-Company that the Affidavit filed in support of the Winding up Petition was not in conformity with Rule 21 of the Companies (Court) Rules, 1959 and Form No.3 contained in Appendix I to the said Rules.

The learned counsel for the Respondent-Company placed reliance on the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra).

The learned Single Judge in Malhotra Steel Syndicate case (supra), expressed doubts about the correctness of the observations made by the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), but declined to refer the matter to a Larger Bench as the learned Single Judge was not satisfied on the merits of the Winding up Petition.

On merits of the case in Malhotra Steel Syndicate case (supra), the learned Single Judge was of the view that in view of the material placed before the Court, it was prima-facie established that the debt was bona fide disputed by the Respondent-Company. Therefore, the learned Single Judge dismissed the Winding up Petition and relegated the Petitioner-Company to a civil Suit.

The relevant portions of the decision of the learned Single Judge in Malhotra Steel Syndicate case (supra) are reproduced below (at pages 550 - 552 of the said Company Cases) :

"Mr. Bhagirath Dass, who appeared for the respondent, submitted that the affidavit filed in support of the petition is not in conformity with rule 21 of the Companies (Court) Rules, 1959. Rule 21 enjoins that every petition shall be verified by an affidavit and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 provides that the statement made in various paragraphs of the petition has either to be verified as true to knowledge or on information received or on information which is believed to be true. Since the affidavit filed in support of the petition is not in conformity with Rule 21 of the Companies (Court) Rules, the petition is liable to be rejected on this score alone. Learned counsel relied upon a Division Bench decision of this court in Mool Cihand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 198. Before the Bench, learned counsel for the Petitioner Company conceded that where a petition for winding up is not accompanied by an affidavit, the same is liable to be dismissed. On the basis of that concession, the Bench held that an affidavit, which is not in due form, is of no value and the company petition, which is to be accompanied by the affidavit, will be no petition in the eyes of law.

Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not "evidence" within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my lord the Chief Justice for referring the case to a larger Bench for reconsideration of the judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (Private) Ltd. [1986] 60 Comp Cas. 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case.

In Amalgamated Commercial Traders (P.) Ltd. v. Krishnaswami (A.C.K.) [1965] 35 Comp Cas 456, 463, 464 (SC), the Supreme Court quoted with approval the following passage from Buckley on the Companies Acts, 13th edition, page 451) : "It is well settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under certain circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time, petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the court may decide it on the petition and make the order................If the debt was bona fide disputed, as we hold it was, there cannot be ''neglect to pay' within section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the ground of winding-up, namely, that the company is unable to pay its debts is not substantiated".

This passage has been quoted with approval in the subsequent decisions of the apex court. The law has been succinctly stated in this paragraph and if the company court comes to the conclusion that the debt is bona fide disputed by the company, against whom the winding up petition has been filed, the petitioner has to be relegated to a civil suit and a winding up petition will not be the appropriate remedy.

The respondent-company has placed material before this court and it prima facie establishes that the debt is bona fide disputed.

The duplicate copy of the bill, which is placed on record by the respondent company evidencing receipt of the goods in dispute, does not bear the signatures of Mr. K.S. Rupal who purports to have signed the original bill dated August 7, 1984. The original bill placed on record by the petitioner bears the signature of Mr. K.S. Rupal. The photocopy of the cheque issued to cover price of the goods, which was dishonoured, is signed only by Shri S.S. Sandu, executive director of the company. The respondent company has denied that Shri S.S. Sandhu was authorised to issue the cheque for and on behalf of the company.

The petitioner filed a rejoinder to the written statement and in Para No.4 thereof took the plea that hundreds of cheques issued prior to and subsequent to the date of the issuance of the cheque to the petitioner on August 7, 1984, were signed by Sri S.S. Sandhu and were honoured by the bankers. The verification of the rejoinder reveals that the facts mentioned in Para No.4 of the replication are true and correct to the best of knowledge of the deponent derived from the record and information received and believed to be correct. It is not stated as to from which source the petitioner-company acquired the knowledge that Shri S.S. Sandhu was competent to issue the cheque for and on behalf of the company. It was imperative for the petitioner to specifically disclose the source of information which was believed by him to be correct. Even if the plea was correct, the petitioner could obtain a certificate from the banker who had honoured the cheques issued for and on behalf of the respondent company by Shri S.S. Sandhu. No such document has been placed on record. The receipt of goods is denied by the respondent and no material has been placed before this court to vouchsafe the assertions of the petitioner that the goods had been supplied.

The petitioner has to prove the allegations made by it in the petition by leading positive evidence and this could be done only in a civil suit. The respondent company has prima facie established that the debt is bona fide disputed by it".

(Emphasis supplied)

It further appears that against the said decision of the learned Single Judge in Malhotra Steel Syndicate case (supra), a Company Appeal was filed. A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal on the short ground that the Affidavit filed in support of the Winding up Petition was not in proper form and that the Winding up Petition could not be entertained.

Against the said decision of the Punjab and Haryana High Court, Special Leave Petition, being S.L.P. (Civil) No. 19170 of 1991, was filed before the Supreme Court, and the said Special Leave Petition gave rise to Civil Appeal No. 2587 of 1992.

The said Civil Appeal was decided by the Supreme Court by its decision reported in Malhotra Steel Syndicate V. Punjab Chemi Plants Ltd., 1993 Supp. (3) SCC 565 (supra).

The relevant portion of the said decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is quoted below:

"1. Leave granted.

2.We have heard both the counsel. We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding-up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

3. We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991.

4. In the result, the Company appeal will stand revived before the Division Bench for disposal on merits.

5. The appeal is allowed accordingly. There will be no order as to costs."

(Emphasis supplied)

It may be mentioned that pursuant to the remand by the Supreme Court by its aforementioned decision in Malhotra Steel Syndicate case (supra), a Division Bench of the Punjab & Haryana High Court considered the Company Appeal on merits, and dismissed the same by its decision reported in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., [1996] 85 Company Cases 586 (Punjab & Haryana).

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate Bank case (supra) shows that the following principles, amongst others, may be deduced from the said decision :

(1)While considering the validity of the Form and Verification of the Affidavit filed in support of the Company Petition, a proper and liberal construction should be adopted. In other words, what is required is that the Affidavit has substantially complied with the Form and Verification as provided in the Companies (Court) Rules, 1959.

(2)Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity.

(3)In case there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same.

Hence, in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra), if an Affidavit filed in support of the Winding up Petition suffers from any defect or irregularity, opportunity should be given to rectify the same. Therefore, in such a situation, the Petitioner-Company may be permitted to file a fresh Affidavit in support of the Winding up Petition.

The above legal principles deduced from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), are the law declared by the Supreme Court, and are binding on all the Courts in the country in view of Article 141 of the Constitution of India.

Therefore, with deep respect for the learned Judges, I am of the opinion that the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) in-so-far as, the said decisions have laid down that in case verification of the Winding up Petition by Affidavit filed in support of the Winding up Petition, is defective, the Winding up Petition is liable to be dismissed, and no opportunity to re-verify the Winding up Petition by filing fresh Affidavit can be given, are no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

For the same reason, the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra), wherein the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), was relied upon, is also no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

As regards the complications pointed out by the Calcutta High Court in its decision in Gaya Textiles case (supra) and by the learned Single Judge of the Punjab and Haryana High Court in his decision in Mool Chand Wahi case (supra), I am of the opinion that in case, the Affidavit, filed in support of the Winding up Petition, is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

In view of this, various complications pointed out in the said decision of the Calcutta High Court and the said decision of the learned Single Judge of the Punjab and Haryana High Court, would not arise.

As regards the submission made by the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) should be confined only to "slight defect or irregularity", I find myself unable to accept the said submission. The expression "slight defect or irregularity" occuring in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is in the context of the facts of the said case. However, the ratio of the said decision is that if the Affidavit filed in support of the Winding up Petition is defective, the same is merely an irregularity, and can be cured by giving opportunity to the Petitioner to rectify the same.

Keeping in view the above legal position, let us consider the facts of the present case. As noted above, an Affidavit, sworn by Santosh John on 6th September, 2002, was filed in support of the Company Petition. The said Affidavit, as held in Question No.1 above, is defective.

Another affidavit, sworn by Santosh John on 13th April, 2004, was filed in Form No.3 as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit. It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit.

As the Affidavit, sworn on 6th September, 2002, originally filed in support of the Company Petition, has been held to be defective, I am of the opinion that the prayer made in the said Company Application (Paper No. A-10) on behalf of the Petitioner-Company be granted, and the Petitioner-Company be permitted to bring on record the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit, and the said Affidavit, sworn on 13th April, 2004, be read as being the Affidavit in support of the Company Petition.

It is relevant to note that the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Private Limited case (supra), by the Andhra Pradesh High Court in D & H Secheron Electrodes case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In DLF Industries Ltd. case (supra), the Winding up Petition was supported by an Affidavit affirmed in Delhi before a Notary on July 7, 1997.

An objection was raised by the Respondent-Company that the Affidavit filed in support of the Winding up Petition was defective. It was submitted that the person affirming the Affidavit did not state that he was a Principal Officer of the Company. The Affidavit did not refer to ''this' particular Petition as being affirmed and also that it was not in Form No.3 as required by Rules 18 and 21 of the Companies (Court) Rules, 1959.

In view of the said objection raised by the Respondent-Company, the petitioner filed another Affidavit affirming this very Petition, which was affirmed on October 23, 1997 before a Notary in Faridabad. This Affidavit stated that the deponent was the Managing Director of the Petitioner-Company. He was shown the Petition and he affirmed that paragraphs 1 to 10 were true to his knowledge and the statements made in paragraphs 11 and 12 were based on his information which he believed to be true.

The Gujarat High Court held that the First Affidavit itself could not be said to be in any way materially defective requiring the rejection of the Winding up Petition. That apart, assuming that there was any defect in the First Affidavit, the same was cured in the Second Affidavit. Such a course of action was permissible.

The Gujarat High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), and concluded that the Winding up Petition could not be rejected on the ground of the Affidavit filed in support of the Winding up Petition being defective.

Relevant portion of the said decision of the Gujarat High Court in DLF Industries case (supra) is quoted below (at pages 471, 472 and 473 of the said Company Cases) :

"Mr. Nanavati, learned counsel for the respondent, submits that this affidavit is affirmed in Delhi before a notary on July 7, 1997. The petition is not mentioned to be the one annexed at Annexure A thereto. Paragraph No. 2 of the affidavit states that the petitioner has filed the petition "this day" whereas the petition has come to be filed on July 8, 1997. Mr. Nanavati, therefore, submits that it is difficult to say that this affidavit is affirmed with respect to this very petition. Mr. Nanavati has principally relied upon the judgment of the Punjab High Court, first of all of a single Judge in the case of Mool Chand Wahi v. National Paints P. Ltd.[1986] 60 Comp Cas 198 (P & H) which is confirmed by the Division Bench of that court in Mool Chand Wahi. v. National Paints P. Ltd. [1986] 60 Comp. Cas 402. In that judgment the single Judge as well as the Division Bench have held that from Rules 11, 18 and 21 of the Companies (Court) Rules, 1959, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form and if it is not so, no value can be attached to it. The judgment holds that the affidavit is to be filed so that the contents of the petition are treated as evidence and in the absence of the affidavit being in the exact form, that cannot be permitted. The judgment also holds that a subsequent correction of the affidavit is not permissible.

As against that, Mr. Seth, learned counsel for the petitioner, relied upon the judgment of a single Judge of the Bombay High Court (G.D. Kamat, J. as he then was) in Bandekar (S.R.) v. Rajaram Bandekar [1997] 88 Comp Cas 673 (Bom) where the learned Judge held that the importance of verification is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered." (page 682).

In view of the objection raised by the respondent, the petitioner filed another affidavit affirming this very petition, which is affirmed by one Shri Ranjit Singh Cheema on October 23, 1997, before a notary in Faridabad. This affidavit states that the deponent is the managing director of the petitioner-company. He is shown the petition and he has affirmed that paragraphs Nos. 1 to 10 are true to his knowledge and the statements made in paragraphs 11 and 12 are based on his information which he believed to be true.

Now, if we look to the first affidavit, referred to above, the deponent has disclosed his high position in the company. He has also made a statement on oath with respect to the contents of the petition and its annexures as required by law. In my view, the first affidavit itself cannot be said to be in any way materially defective requiring the rejection of the petition.

The observations of Kamat J. quoted above aptly apply in the present case. That apart, assuming that there is any defect in the first affidavit, the same is cured in the second affidavit. Such a course of action is permitted by a Division Bench of the Bombay High Court in the case of Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 (Bom), which is binding precedent for this court. Now, on this aspect, the Hon'ble Supreme Court has indicated as to what approach should be adopted in such a controversy in the case of Malhotra Steel Syndicate v. Punjab Chemi-plants Ltd. [1993] 3 SCC (Supp) 565. It is a short order but it indicates what approach the court should have. It reads as follows :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit the appellant should have been given an opportunity to rectify the same." (Underlining supplied).

In this view of the matter, as far as the first submission of Mr. Nanavati is concerned, it is difficult to accept the same and the petition cannot be rejected solely on this ground. I have examined this submission in spite of the fact that this plea has not specifically been taken in the reply. In fact, it is the petitioner who has contended that Shri K.M. Patel who has affirmed the reply for the respondent is not the principal officer and therefore his reply may not be looked into. As far as this aspect is concerned, another affidavit has subsequently been filed by the respondent placing on record that Shri K.M. Patel is a senior officer of the respondent-company authorised to swear the affidavit in reply. Hence I am not prepared to accept this objection to the affidavit of Shri Patel also."

(Emphasis supplied)

In Welding Rods Private Ltd. case (supra), the original verification read as under :

"Affidavit I, S.L. Jain, authorised signatory of the petitioner-company, do hereby solemnly affirm and State on oath that what is stated in the foregoing petition is true to my knowledge, information and belief and I believe the same to be true.

Solemnly affirmed at Mumbai on this 10th day of July, 2000.

For Indo Borax and Chemicals Ltd.

(Sd. ) Deponent."

A preliminary objection was raised that the affidavit filed in support of the Winding up Petition was not an Affidavit in the eyes of law or in accordance with Rule 21 of the Companies (Court) Rules, 1959.

The learned Single Judge of the Gujarat High Court came to the conclusion that the irregularity in the verification of the Affidavit and want of signature below the Petition and above the verification were irregularities which were required to be permitted to be cured. The learned Single Judge accordingly afforded an opportunity to the Petitioner-Company to sign the Petition and remove all technical objections within a period of 15 days from the date of the order. The Petitioner-Company availed of the said opportunity by filing the Affidavit as per Form No. 3.

Against the decision of the learned Single Judge rejecting the above preliminary objection as well as other preliminary objections raised on behalf of the respondent, a Company Appeal was filed.

A Division Bench of the Gujarat High Court dismissed the said Company Appeal.

As regards the preliminary objection regarding the defect in the verification of the Affidavit, the Division Bench of the Gujarat High Court held that there was no infirmity in the order of the learned Single Judge permitting the Petitioner-Company to rectify the defect in the verification of the Affidavit filed with the Company Petition.

It was further held by the Division Bench that the effect of permitting such rectification was, inter-alia, to relate it back to the original date of filing of the Winding up Petition.

It was further held by the Division Bench that in view of the pronouncement of the Supreme Court in Malhotra Steel Syndicate case (supra), the decisions of the learned Single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) must be treated as having been impliedly overruled.

The Division Bench, however, emphasised that the Court would not permit the rectification of the defect in a Winding up Petition just as a matter of course, but would take into account all the relevant circumstances including the conduct of the parties.

Relevant portion of the said decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra) is quoted below (at pages 767, 768 and 769 of the said Company cases) :

"We find considerable substance in the contention of Mr. Vakil for the petitioning-creditor. The preponderance of judicial authority is that the defect in the form of verification or affidavit is only a technical irregularity and that an opportunity should be given to the concerned party to cure such defect. The inherent powers of the court saved by Rule 9 of the Companies (Court) Rules, can certainly be invoked in such cases. Rule 9 reads as under :

"9. Inherent powers of court.-Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court."

In Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1989] 65 Comp Cas 546 (P & H), Justice Majithia referred to the Division Bench judgment of the Punjab and Haryana High Court in Mool Chand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 402 and made the following observations (page 550 of 65 Comp Cas):

"Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not ''evidence' within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my Lord the Chief Justice for referring the case to a larger Bench for reconsideration of the Judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (P) Ltd. [1986] 60 Comp Cas 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case."

The aforesaid decision was ultimately carried before the Supreme Court and in the decision reported in Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] 3 (Suppl.) SCC 565, the Supreme Court passed the following order :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991." (emphasis supplied)

With this pronouncement, the decisions of the learned single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi's case [1986] 60 Comp Cas 402 must be treated as having been impliedly overruled.

Following the aforesaid Supreme Court decision, this court has also held in DLF Industries Ltd.'s case [1999] 2 Comp LJ 310 (Guj); [2001] 103 Comp Cas 467 that the importance of verification in an affidavit in Form No.3 under Rule 21 of the Companies (Court) Rules, 1959, is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered."

In Mrs. Roma Deb v. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Cas 350, speaking for the Delhi High Court Hon'ble Mr. Justice D.P. Wadhwa (as His Lordship then was) also expressed the same view that the court can, in its inherent powers, allow the petitioners to present an affidavit in support of the petition in terms of the prescribed rules and forms, if the affidavit originally filed with the petition does not conform to them. Of course, this the court would do in the ends of justice ; and if the circumstances of the case require.

...............................................

.......................................................

As regards the contention of Mr. Ashwin Lalbhai that even if a fresh affidavit with proper verification in accordance with Rule 3 was permissible, the winding up petition can be said to have been instituted on the date on which such fresh affidavit is filed, we are unable to accept this contention for the reasons which were also commended by the Delhi High Court in the aforesaid case of Mrs. Roma Deb vs. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Case 350 wherein Hon'ble Mr. Justice D.P. Wadhwa observed that the 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 of filing, this can be permitted in the ends of justice; and the court will see if any prejudice is being caused to the other party which may be compensated by costs or otherwise. A balance has to be struck between two warning 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 cannot be rectified. The court is not helpless in a case where the affidavit verifying the petition is not in the prescribed form. 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 could be cured at any stage of the suit. The court will not, however, permit the rectification of the defect in a winding up petition just as a matter of course ; but would take into account all the relevant circumstances including the conduct of the parties.

(Emphasis supplied)

In the instant case, we do not find any infirmity in the order of the learned Company Judge permitting the petitioning-creditor to rectify the defect in the verification on affidavit filed with the company petition. The effect of permitting such rectification is, inter-alia, to relate it back to the original date of filing of the winding up petition and this has been permitted in the interests of justice. No prejudice is caused to the appellant-company by such permission granted by the learned Company Judge."

(Emphasis supplied)

I am in respectful agreement with the above decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra).

In D & H SECHERON ELECTRODES (P.) LTD. VS. VOLTARE ELECTRODES (P.) LTD., [1997] 89 Company Cases 592 (Andhra Pradesh) (supra), the Affidavit filed in support of the Winding up Petition was verified by a C.K. Padmanabhan, who was neither a Director nor a Principal Officer of the Petitioner-Company, but was Administrative Officer of the Petitioner-Company. A preliminary objection was raised that the Company Petition was not maintainable under the proviso to Rule 21 of the Companies (Court) Rules, 1959, as it was not filed by a validly constituted attorney. In view of the preliminary objection, the Petitioner filed an application seeking leave of the Court under the proviso to Rule 21 to permit C.K. Padmanabhan to make and file the Affidavit in the Winding up Petition. Along with the Affidavit, he filed true copy of the resolution passed by the Board of Directors authorizing C.K. Padmanabhan to sign and file the Winding up Petition against the Respondent-Company and to sign necessary papers as may be required for this purpose.

The Andhra Pradesh High Court held that no doubt, the Petition, as filed, was defective in the absence of obtaining leave of the Court to accept the Affidavit of Padmanabhan, but the same was rectified by filing the Affidavit accompanied by a true copy of the resolution of the Board. The Andhra Pradesh High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

The relevant portion of the judgment of the Andhra High Court is reproduced below (at pages 595, 596 and 597 of the said Company Cases) :

" .................... During the hearing of the arguments, the respondent-company raised a preliminary objection that the company petition is not maintainable under the proviso to rule 21 of the Companies (Court) Rules, 1959 (for short "the Rules"), as it is not filed by a validly constituted attorney and that Sri C.K. Padmanabhan, who verified the petition, is not authorized to file the company petition. As it is a pure question of law, I permitted the respondent-company to raise this plea even at that late stage. Thereupon the petitioner filed Company Application No. 153 of 1995, seeking leave of the court to permit Sri C.K. Padmanabhan, to sign the affidavit and to file this winding up petition. Hence, the third question for consideration is, whether the company petition filed by Sri C.K. Padmanabhan, on behalf of the respondent-company, is maintainable under rule 21 of the Rules.

Taking the third point first, under rule 21, where any petition is presented by a body corporate, the affidavit must be verified by a director, secretary or other principal officer thereof, provided that the judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the company to make and file the affidavit, Admittedly, in this case, Sri C.K. Padmanabhan, who filed the company petition is neither a director nor a principal officer of the petitioner-company. He is the administrative officer and is described as a duly constituted attorney. In fact, the office ought not to have numbered it, but posted the same for orders of the court. Thus, it is clear that the company petition as filed in 1988 is not in accordance with rule 21. Realising this defect the petitioner filed Company Application No. 153 of 1995 seeking leave of the court under the proviso to rule 21 to permit Mr. C.K. Padmanabhan to make and file the affidavit in the company petition. Along with the affidavit, he filed a true copy of the resolution passed by the board of directors at its meeting at Indore, on September 6, 1988, authorizing Sri C.K. Padmanabhan to sign and file the winding up petition against the respondent-company and to sign necessary papers as may be required for this purpose. It was also stated in the resolution that Sri C.K. Padmanabhan might be given power of attorney by the company. It is not clear whether any power of attorney has been issued. No copy has been filed by the petitioner. Mr. Y. Ratnakar, learned counsel for the petitioner, contends that in view of this resolution of the board authorizing Sri C.K. Padmanabhan, both to sign and file the company petition, leave may be granted by the court regularizing the affidavit filed by Sri C.K. Padmanabhan. Mr. S. Ravi, learned counsel for the respondent, opposed this, contending that the petitioner has not filed the original resolution of the board or the power of attorney, if any, issued in favour of Sri C.K. Padmanabhan, and relied on the decisions in Mohan Lal Mithal v. Universal Wires Ltd., [1983] 53 Comp Cas 36 (Cal) and Nibro Ltd. v. National Insurance Co. Ltd., AIR 1991 Delhi 25 ; [1991] 70 Comp Cas 388.

Mohan Lal Mithal v. Universal Wires Ltd. [1983] 53 Comp Cas 36-(Cal) was a case of filing of an application under sections 397 and 398 of the Act on behalf of a company holding shares in another company and the letter of consent annexed to the petition was not backed by a resolution of the board of directors but was signed by the secretary of the company who claimed that he was directed to do so by a director of the company. It may be seen here that under rule 88 of the Rules in the case of petitions filed under Section 397, the letter of consent signed by the members authorizing the petitioner to present the petition on their behalf, must be annexed to the petition. Interpreting this rule, the single judge of the Calcutta High Court held that as the letter of consent was not backed by the resolution of the board of directors, but was only signed by the secretary of the company, the petition was not maintainable. This decision does not help the respondent-company, as we are concerned here with rule 21.

The next decision is Nibro Ltd. v. National Insurance Co. Ltd.[1991] 70 Comp Cas 388 (Delhi) in which a suit was filed by a director without the necessary resolution in that behalf by the board. The contention of the company was that under Order 29, rule 1 of the Civil Procedure Code, in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any other director or other principal officer of the corporation who is able to depose to the facts of the case. The Delhi High Court rejected the contention of the company and held that the suit is not maintainable under section 291 of the Act read with sections 14, 26 and 28 and Schedule I, Table A. The court held that Order 29, rule 1 of the Civil Procedure Code does not authorise the person mentioned therein to institute suits on behalf of the corporation but only authorises them to sign and verify the pleadings on behalf of the corporation. This decision is also not applicable to the facts of the case.

In Mehta Steel Syndicate [1993] 3 SCC 565 (sic), an objection was taken that the affidavit filed in support of the winding up petition is defective. The High Court had dismissed the petition on that ground. The Supreme Court held that there was no defect and even assuming that there was defect or irregularity, the party must be given opportunity to rectify the same. In the instant case, no doubt, the petition as filed was defective in the absence of obtaining leave of this court to accept the affidavit of Padmanabhan. But the same has been rectified now by filing the affidavit accompanied by a true copy of the resolution of the board. The proviso to rule 21 does not require any power of attorney to be filed. There is no reason to doubt the true copy of the resolution of the board and to throw out the company petition on the technical ground, that too, after seven years after filing the same. I accordingly, overrule the objection raised by the respondent and allow Company Application No. 153 of 1995."

(Emphasis supplied)

In G.K.W. Limited Vs. Shriram Bearings Ltd., [2002] 109 Company Cases 636 (Delhi) (supra), an objection was raised that the Affidavit filed in support of the Winding up Petition was not in accordance with Rule 21 of the Companies (Court) Rule, 1959, and Form No. 3. The Delhi High Court held that the Affidavit was not in accordance with the provisions of Rule 21 of the Companies (Court) Rules, 1959, and Form No. 3. It was further held that a defective verification was only an irregularity in the procedure and would not be a ground for rejecting the Winding up Petition. The defect could be cured at any stage. Opportunity should be given to the petitioner to file a proper Affidavit in accordance with the Rule and the Form prescribed therein.

The Delhi High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) as also on the decision of the Delhi High Court in Mrs. Roma Deb case (supra). The Delhi High Court observed as under (at pages 639 and 640 of the said Company Cases ):

"A combined reading of Form No.3 and rule 21 makes it clear that the person verifying the affidavit has to disclose whether he is director or secretary of the company or an authorised person empowered to sign the affidavit. He has also to indicate which of the paragraphs are true on the basis of information received and believed by him. A perusal of the affidavit filed with this petition by Shri Avinash Chawla shows that he was only an assistant manager of the petitioner-company. He nowhere disclosed how he was competent to verify this affidavit. The mere assertion that he was fully authorised by the petitioner-company to sign and verify the affidavit is not enough to conclude that the affidavit has been signed and verified by a duly authorised person nor can it be said to be in accordance with Form No.3. Mr. Chawla has deposed in the affidavit that he was well acquainted with the facts and circumstances of the case. A reading of para 2 of the affidavit shows that he has not disclosed which of the paragraphs are based on information, derived by him and which were of his personal knowledge. On the contrary a reading of para. No. 2 of the affidavit shows Mr. Chawla verified the facts of the petition on his personal knowledge :

"Para 2. That I have read the accompanying petition and that the facts stated therein are correct and true to my knowledge."

A reading of the petition as a whole shows that all the paragraphs could not be based on his personal knowledge. Some paras. deal with legal submissions, those could not be based on personal knowledge. Similarly, the capital and status of the respondent-company has to be based on knowledge and information derived. For some of the paras of the petition he must have derived the information from official record, therefore, could not have been verified on the basis of his knowledge. Such an affidavit, prima facie, cannot be called in accordance with the provisions of rule 21 and Form No.3.

The question to answer is whether due to such a defective affidavit, the petition is liable to be dismissed? The answer is in the negative. A similar point came up for interpretation before this court in the case of Roma Deb v. R.C. Soad and Co. (P) Ltd. [1987] 2 Comp LJ 174 : [1990] 67 Comp Cas 350. This court, after analyzing rule 21 and other provisions of the Act and Form No.3, came to the conclusion that if the affidavit originally filed with the petition was not as per rule 21 and Form No.3, still the court could in its inherent powers allow the petitioner to present a fresh affidavit in support of his petition in terms of the prescribed rule and form. In that case also the affidavit in support of the petition was found to be defective, inasmuch as it had not been properly verified as required under the rules. It was observed that the court cannot be helpless in a case where the affidavits verifying the petition is not in the prescribed form. A defective verification is only an irregularity in the procedure but will not be a ground for rejecting the petition. That the defect could be cured at any stage of the suit. To the same effect are the observations of the Supreme Court in the case of Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] Suppl. 3 SCC 565. In that case also the affidavit filed in support of the winding up application was found to be defective. The apex court found that the verification did not contain the averments which were required under the rules. Still the apex court held that even if there was slight defect or irregularity in the affidavit the applicant ought to have been given opportunity to rectify the same. The order of the Division Bench dismissing the appeal on the ground of defective affidavit was set aside. Opportunity was given to that petitioner to rectify the defect in the affidavit.

Taking support from the above decisions, it can be said that though there is a defect in the affidavit accompanying the winding up petition still the petition cannot be thrown out. Opportunity has to be afforded to the petitioner to file a proper affidavit in accordance with the rule and the form prescribed therein. Order accordingly," The petitioner is given opportunity to file a fresh affidavit within two weeks from today."

(Emphasis supplied)

The learned counsel for the Respondent-Company, however, submits that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam. It is submitted that there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

The learned counsel for the Respondent-Company further submits that the Respondent-Company can raise the plea of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per incuriam even if the said decision of the Supreme Court has been followed in the above decisions of various High Courts.

In order to appreciate the submissions made by the learned counsel for the Respondent-Company, it is necessary to notice certain decisions, which explain the doctrine of per incuriam and the doctrine of sub-silentio.

In A.R. Antulay Vs. R.S. Nayak and another, A.I.R. 1988 Supreme Court 1531, (1988) 2 SCC 602, their Lordships of the Supreme Court ( majority view) opined as follows (paragraphs 44, 45, 49, 50 and 57 of the said AIR) :

"44. It appears that when this Court gave the aforesaid directions on 16th February, 1984, for the disposal of the case against the appellant by the High Court, the directions were given oblivious of the relevant provisions of law and the decision in Anwar Ali Sarkar's case (AIR 1952 SC75)(supra). See Halsbury's Laws of England, 4th Edn., Vol. 26 page 297, para 578 and page 300, the relevant notes 8, 11 and 15; Dias on Jurisprudence, 5th Edn., pages 128 and 130; Young v. Bristol Aeroplane Co. Ltd., (1944) 2 All ER 293 at P. 300. Also see the observations of Lord Goddard in Moore v. Hewitt (1947) 2 All ER 270 at p. 272-A) and Penny V. Nicholas, (1950) 2 All ER 89, 92A. "Per incuriam" are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account to be demonstrably wrong. See Morelle v. Wakeling, [1955] EWCA Civ 1; (1955) 1 All ER 708, 718F. Also see State of Orissa v. Titaghur Paper Mills Co. Ltd., [1985] INSC 43; (1985) 3 SCR 26 : [1985] INSC 43; (AIR 1985 SC 1293). We are of the opinion that in view of the clear provisions of section 7(2) of the Criminal Law Amendment Act, 1952 and Articles 14 and 21 of the Constitution, these directions were legally wrong.

45. The principle that the size of the Bench - whether it is comprised of two or three or more Judges - does not matter, was enunciated in Young v. Bristol Aeroplance Co. Ltd. (supra) and followed by Justice Chinnappa Reddy in Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, [1984] INSC 208; (1985) 2 SCR 8 : [1984] INSC 208; (AIR 1985 SC 231) where it has been held that a Division Bench of three Judges should not overrule a Division Bench of two Judges, has not been followed by our Courts. According to well-settled law and various decisions of this Court, it is also well-settled that a Full Bench or a Constitution Bench decision as in Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) was binding on the Constitution Bench because it was a Bench of 7 Judges.

46.The principle in England that the size of the Bench does not matter, is clearly brought out in the decision of Evershed M.R. in the case of Morelle v. Wakeling, [1955] EWCA Civ 1; (1955 (1) All ER 708) (supra). The law laid down by this Court is somewhat different. There is a hierarchy within the Court itself here, where larger Benches overrule smaller Benches. See the observations of this Court in Mattulal v. Radhe Lal, [1974] INSC 103; (1975) 1 SCR 127 : [1974] INSC 103; (AIR 1974 SC 1596), Union of India v. K.S. Subramanian [1976] INSC 163; (1977) 1 SCR 87 at p. 92 : [1976] INSC 163; (AIR 1976 SC 2433 at p. 2437) and State of U.P. v. Ram Chandra Trivedi, [1976] INSC 207; (1977) 1 SCR 462 at p. 473 : [1976] INSC 207; (AIR 1976 SC 2547 at p. 2555). This is the practice followed by this Court and now it is a crystallized rule of law. See in this connection, as mentioned hereinbefore, the observations of the State of Orissa v. Titaghur Paper Mills (AIR 1985 SC 1293) (supra) and also Union of India v. Godfrey Philips India Ltd., 1985 Suppl (3) SCR 123 at p. 145 : [1985] INSC 219; (AIR 1986 SC 806 at p, 815).

49................................................................It is true that Shri Jethmalani has shown us the prayers made before the High Court which are at page 121 of the paper-book. He argued that since the transfers have been made under section 407, the procedure would be that given in section 407 (8) of the Code. These directions, Shri Jethmalani sought to urge before us, have been given in the presence of the parties and the clarificatory order of April 5, 1985 which was made in the presence of the appellant and his Counsel as well as the Counsel of the State Government of Maharashtra, expressly recorded that no such submission was made in connection with the prayer for grant of clarification............................

50.According to Shri Jethmalani, the doctrine of per incuriam has no application in the same proceedings. We are unable to accept this contention........................."

57. Shri Jethmalani urged that the directions given on 16th February, 1984, were not per incuriam. We are unable to accept this submission. It was manifest to the Bench that exclusive jurisdiction created under Section 7(1) of the 1952 Act read with section 6 of the said Act, when brought to the notice of this Court, precluded the exercise of the power under section 407 of the Code. There was no argument, no submission and no decision on this aspect at all. There was no prayer in the appeal which was pending before this Court for such directions. Furthermore, in giving such directions, this Court did not advert to or consider the effect of Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) which was a binding precedent. A mistake on the part of the Court shall not cause prejudice to any one. ................................."

(Emphasis supplied)

In Municipal Corporation of Delhi V. Gurnam Kaur, [1988] INSC 271; AIR 1989 SC 38, their Lordships of the Supreme Court explained the meaning of per incuriam and sub-silentio as follows (paragraphs 11 & 12 of the said AIR):

"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn., explains the concept of sub silentio at p. 153 in these words:

"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio."

12. In Gerard V. Worth of Paris Ltd. (K), (1936) 2 All ER 905 the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority."

(Emphasis supplied)

In State of U.P. and another Vs. Synthetics and Chemicals Ltd. and another[1991] INSC 160; , (1991) 4 SCC 139 (supra), their Lordships of the Supreme Court held as under (paras 40 and 41 of the said SCC) :

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. [Young v. Bristol Aeroplane Co. Ltd., (1944) 1 K.B. 718 :(1944) 2 All ER 293]. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, (1962) 2 SCR 558 : [1961] INSC 200; AIR 1962 SC 83), this Court while pointing out the procedure to be followed when conflicting decisions are placed before a bench extracted a passage from Halsbury's laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.

41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law ? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, 677 : (1941) 2 All ER 11, the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry, [1967] INSC 35; AIR 1967 SC 1480 : [1967] INSC 35; (1967) 2 SCR 650, it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

(Emphasis supplied)

In Government of Andhra Pradesh and another Vs. B. Satyanarayan Rao (dead) by L. Rs. and others, A.I.R. 2000 Supreme Court 1729, their Lordships of the Supreme Court held as under (paragraph 8 of the said AIR):

"8. Learned counsel for the respondent attempted to convince us that the decision in the case of State of A.P. Vs. V. Sadanandam, (AIR 1989 SC 2060 : 1989 Lab IC 2024)(supra) has to be ignored on the principle of per incuriam as certain relevant provisions of the Rules were not considered in the said case, and in any case this case requires to be referred to a larger Bench of three Judges. Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue. This is not the case here. In State of A. P. Vs. V. Sadanandam (supra) the controversy was exactly the same as it is here and this Court after considering paragraph 5 of the Presidential Order of 1975 held that the Government has power to fill a vacancy in a zone by transfer. We, therefore, find that rule of per incuriam cannot be invoked in the present case. Moreover, a case cannot be referred to a larger Bench on mere asking of a party. A decision by two Judges has a binding effect on another co-ordinate Bench of two Judges, unless it is demonstrated that the said decision by any subsequent change in law or decision ceases to laying down a correct law. We, therefore, reject the arguments of learned counsel for the respondents."

(Emphasis supplied)

In Arnit Das Vs. State of Bihar, AIR 2000 SC 2264, their Lordships of the Supreme Court held as under (paragraph 20 of the said AIR) :

"20. A decision not expressed, not accompanied by reasons and not proceeding on conscious consideration of an issue can not be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not ratio decidendi. This is the rule of sub-silentio, in the technical sense when a particular point of law was not consciously determined. (See State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, Para 41)."

(Emphasis supplied)

In M/s A-One Granites vs. State of U.P. and others, AIR 2001 Supreme Court 1203, their Lordships of the Supreme Court laid down as under (paragraphs 10, 11 and 12 of the said AIR) :

"10. The first question which falls for consideration of this Court is as to whether the question regarding applicability of Rule 72 of the Rules in relation to the present lease is concluded by the earlier decision of this Court rendered in Prem Nath Sharma v. State of U.P. , (1997) 4 SCC 552 : (1997 AIR SCW 2121 : AIR 1997 SC 2252 : 1997 All LJ 1201). From a bare perusal of the said judgment of this Court it would be clear that the question as to whether Rule 72 was applicable or not was never canvassed before this Court and the only question which was considered was whether there was violation of the said rule.

11. This question was considered by the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment. Following the said decision, this Court in the case of Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101 : [1988] INSC 271; (AIR 1989 SC 38) observed thus (at p. 43 of AIR) :

"In Gerard v. Worth of Paris Ltd.(K), (1936) 2 All ER 905 (C A), the only point argued was on the question of priority of the claimant's debt, and on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancester Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not held thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed."

In State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, reiterating the same view, this Court laid down that such a decision cannot be deemed to be a law declared to have binding effect as is contemplated by Article 141 of the Constitution of India and observed thus :

"A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141."

In the case of Arnit Das v. State of Bihar, 2000 (5) SCC 488 : (2000 AIR SCW 2037 : AIR 2000 SC 2264 : 2000 Cri LJ 2971), while examining the binding effect of such a decision, this Court observed thus (para 20) :

"A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined."

12. Thus we have no difficulty in holding that as the question regarding applicability of Rule 72 of the Rules having not been even referred to, much less considered by this Court in the earlier appeals, it cannot be said that the point is concluded by the same and no longer res integra and accordingly this Court is called upon to decide the same."

(Emphasis supplied)

In Nirmal Jeet Kaur v. State of M.P. and another, (2004) 7 SCC 558, their Lordships of the Supreme Court opined as under (paragraphs 20 and 21 of the said SCC) :

"20. In Salauddin case [1995] INSC 820; (AIR 1996 SC 1042) also this Court observed that the regular court has to be moved for bail. Obviously, an application under Section 439 of the Code must be in a manner in accordance with law and the accused seeking remedy under Section 439 must ensure that it would be lawful for the court to deal with the application. Unless the applicant is in custody his making application only under Section 439 of the Code will not confer jurisdiction on the court to which the application is made. The view regarding extension of time to "move" the higher court as culled out from the decision in K.L. Verma case [(1998) 9 SCC 348] shall have to be treated as having been rendered per incuriam, as no reference was made to the prescription in Section 439 requiring the accused to be in custody. In State v. Ratan Lal Arora [(2004) 4 SCC 590] it was held that where in a case the decision has been rendered without reference to statutory bars, the same cannot have any precedential value and shall have to be treated as having been rendered per incuriam. The present case stands at par, if not, on a better footing. The provisions of Section 439 do not appear to have been taken note of.

21. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. [(1944) 2 All E R 293] is avoided and ignored if it is rendered "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India (in short "the Constitution") which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139). To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

In Babu Parasu Kaikadi (dead) by L.Rs. Vs. Babu (dead) by L.Rs., AIR 2004 Supreme Court 754, their Lordships of the Supreme Court held as under (paragraphs 15, 16, 17 and 18 of the said AIR) :

"15. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Tatoba Kadam (supra), having not noticed the earlier binding precedent of the co-ordinate Bench and having not considered the mandatory provisions as contained in Sections 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent.

16. In Halsbury Laws of England, 4th Edition Volume 26 it is

stated :

"A decision is given per incurima when the Court has acted in ignorance of a previous decision of its own or of a Court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force."

In State of U.P. and another v. Synthetics and Chemicals Ltd. and another, reported in [1991] INSC 160; 1991 (4) SCC 139, this Court observed :

"Incuria" literally means ''carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ''quotable in law' is avoided and ignored if it is rendered, ''in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law."

17. In Govt. of Andhra Pradesh and another v. B. Satyanarayana Rao (Dead) by L. Rs. (2000(4) SCC 262), it has been held as follows :

"Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue."

18. Furthermore, this Court, while rendering judgment in Dhondiram Tatoba Kadam (supra), was bound by its earlier decision of Co-ordinate Bench in Ramchandra Keshav Adke (supra). We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the bar and also without reference to the mandatory provisions of the Act."

(Emphasis supplied)

In N. Bhargavan Pillai (dead) by L. Rs. and another Vs. State of Kerala, AIR 2004 Supreme Court 2317, their Lordships of the Supreme Court held as under (paragraph 14 of the said AIR) :

"14 Coming to the plea relating to benefits under the Probation Act, it is to be noted that Section 18 of the said Act clearly rules out application of the Probation Act to a case covered under Section 5(2) of the Act. Therefore, there is no substance in the accused-appellant's plea relating to grant of benefit under the Probation Act. The decision in Bore Gowda's case (supra) does not even indicate that Section 18 of the Probation Act was taken note of. In view of the specific statutory bar the view, if any, expressed without analyzing the statutory provision cannot in our view be treated as a binding precedent and at the most is to be considered as having been rendered per incuriam. Looked at from any angle, the appeal is sans merit and deserves dismissal which we direct."

(Emphasis supplied)

In Central Board of Dawoodi Bohra Community and another Vs. State of Maharashtra and another, AIR 2005 Supreme Court 752, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7 The Constitution Bench in the case of Chandra Prakash and Ors. Vs. State of U.P. & Anr.-(2002) 4 SCC 234. took into consideration the law laid down in Parija's case and also referred to the decision in Union of India and Anr. V. Raghubir Singh (dead) by L. Rs. etc. relied on by Ms. Indra Jaising, the learned Senior Counsel and then reiterated the view taken in Parija's case. Per incuriam means of decision rendered by ignorance of a previous binding decision such as a decision of its own or of a Court of co-ordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. It is true that Raghubir Singh's case was not referred to in any case other than Chandra Prakash & Ors.' case but in Chandra Prakash & Ors. case. Raghubir Singh's case and Parija's case both have been referred to and considered and then Parija's case followed. So the view of the law taken in series of cases to which Parija's case belongs cannot be said to be per incuriam."

(Emphasis supplied)

In Sunita Devi Vs. State of Bihar and another, AIR 2005 Supreme Court 498, their Lordships of the Supreme Court laid down as under (paragraph 20 of the said AIR) :

"20. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. (1944) 2 All ER 293, is avoided and ignored if it is rendered, "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India, 1950 (in short the ''Constitution') which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. and another v. Synthetics and Chemicals Ltd. and another [1991] INSC 160; (1991) 4 SCC 139. To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

From a perusal of the above decisions of the Supreme Court, it is evident that the doctrine of per incurium applies where the point involved in a case is decided but the decision on the point is given in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. In such circumstances, the decision is treated as per incurium.

The doctrine of sub-silentio applies where the case involves various points, and the decision is given on one or some of the points while the remaining points are not considered and are not decided. Therefore, the decision is silent on such remaining points. In such circumstances, the decision is said to pass sub-silentio on such remaining points.

In short, the doctrine of per incurium applies where the point in question is decided by the Court in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. On the other hand, the doctrine of sub-silentio applies where the point in question is not considered and decided by the Court.

In either of the two situations, the decision on the point in question is not binding.

Coming now to the present case, the doctrine of sub-silentio does not apply to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Malhotra Steel Syndicate case, the points involved were as to whether substantial compliance with Form No.3 is necessary, as to whether any non-compliance with Form No.3 is an illegality or is a mere irregularity, and as to whether fresh opportunity to rectify the defect in the affidavit should be given.

The said decision of the Supreme Court is not silent on the above points involved in the case before the Supreme Court. Therefore, the said decision cannot be said to pass sub-silentio on the said points.

The question then arises as to whether the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incurium.

From a perusal of the decisions of the Supreme Court referred to above, it will be noticed that for a decision to be rendered per incuriam, it is necessary that the following requirements should be fulfilled :

1- The decision has been given in "ignorance or forget-fulness" of some authority binding on the Court concerned or of some relevant statutory provision.

2- The said binding authority or the said statutory provision is contrary to or inconsistent with the decision of the Court concerned.

Therefore, merely because some binding authority or some statutory provision has been ignored in the decision of the Court concerned, will not render the decision per incuriam.

It is further necessary that the binding authority or the statutory provision should be inconsistent with or contrary to the decision of the Court concerned.

Further, the doctrine of per incuriam applies where the decision has been given in "ignorance or forget-fulness" of some binding authority or a relevant statutory provision. Merely because a binding authority or a relevant statutory provision has not been referred to in the decision, it will not render the decision per incuriam provided that such binding authority or statutory provision is not inconsistent with or contrary to the decision of the Court concerned.

Reference in this regard may be made to the following decisions.

In M/s Gupta Sugar Works Vs. State of U.P. and others, AIR 1987 Supreme Court 2351, their Lordships of the Supreme Court opined as follows (paragraph 12 of the said AIR) :

"12. It is true that there is no express reference to Panipat [1972] INSC 272; (AIR 1973 SC 537) and Anakapalle [1972] INSC 271; (AIR 1973 SC 734) in the judgment in New India Sugar Works. But the judgment need not be a digest of cases. It need not be written like a thesis. The decision in New India Sugar Works (AIR 1981 SC 998) may be brief, but not less predictable on the principles of Panipat and Anakapalle. There this Court found the levy price reasonable even from the point of view of the industry. This Court took into consideration the liberty reserved to manufacturers to sell freely 50 % of the sugar manufactured and also 100% of the produce by 2nd and 3rd processes. This Court was of opinion that by such a free sale the industry could get reasonable return. We agree with this conclusion and see no reason for reconsideration."

(Emphasis supplied)

In V. Sudeer, etc. Vs. Bar Council of India and another, AIR 1999 Supreme Court 1167, their Lordships of the Supreme Court held as under (paragraph 26 of the said AIR) :

"26........................................................... However, the question is whether Section 49 (1) (ah) confers such a power on the Bar Council of India. So far as this question is concerned, it has stood answered against the respondent Bar Council of India by a three Judge Bench Judgment of this Court reported in Indian Council of Legal Aid & Advice case (1995 AIR SCW 473 (supra). A. M. Ahmadi, CJI, speaking for the three Judge Bench, had to consider in the said decision, the question whether the Bar Council of India could frame a rule restricting the enrolment of advocates to the State roll to only those who had not completed 45 years of age. Holding such rule to be ultra vires the powers of the Bar Council of India under the Act, it was held that such a rule could not be sustained under Section 49 (1)(ah) as the said provision dealt with a situation after enrolment of advocates and could not take in its sweep any situation prior to their enrolment. Shri Rao, learned senior counsel for the respondent Bar Council of India, tried to salvage the situation by submitting that the said decision was pari incuriam on the ground that Section 24(3)(b) was not noticed. We have already held that Section 24 (3)(d) is the provision which permits the Bar Council of India by exercise of rule making power to make otherwise ineligible person eligible for enrolment and does not act in the reverse direction to make otherwise eligible persons ineligible. Once that conclusion is reached, Section 24(3)(d) becomes totally irrelevant for deciding the question whether the rule impugned before the three Judge Bench in that case could have been sustained by the Bar Council of India by taking resort to Section 24(3)(d). Non-consideration of such irrelevant provision, therefore, cannot make the ratio of the decision in the aforesaid case pari incurium. The second ground on which Shri Rao tried to submit that the said decision was pari incurium was by inviting our attention to a Constitution Bench Judgment of this Court in In re : Lily Isabel Thomas case [1964] INSC 5; (AIR 1964 SC 855) (supra). Now it must be kept in view that the said decision was rendered in connection with an entirely different statutory scheme. Section 52 of the Act, as noted earlier, saves power of the Supreme Court to make Rules under Article 145 of the Constitution of India for determining persons who are eligible to practise before the Supreme Court. Thus, the constitutional power of the Supreme Court for regulating the working of advocates in the Supreme Court who were otherwise entitled to practise in any Court in India under the Act could be validly exercised. When we turn to the constitutional power of the Supreme Court under Article 145, we find clearly mentioned therein that subject to the provisions of any law made by the Parliament, the Supreme Court may from time to time, with the approval; of the President, make rules for regulating generally the practice and procedure of the Court including rules as to the persons practising before the Court. As Section 52 of the Act has expressly saved the powers of the Supreme Court under Article 145 for determining the persons who shall be entitled to practise and plead before the Supreme Court, Article 145 could operate on its own without any fetter being imposed by any statutory law enacted by the Parliament. Accordingly, in the light of Article 145, a question arose before the Constitution Bench in the aforesaid case, whether the Supreme Court was competent to enact a rule in connection with advocates practicing before it, who could act as an advocate on record subject to their passing examination as laid down under the rules. The term ''persons practicing before the Court' as laid down by Article 145 (1)(a) in connection with such rule making power was interpreted to take in its sweep not only persons actually practising but even entitled to practise before the Supreme Court. In this connection, the phraseology found in the Union List in the 7th Schedule of the Constitution in Entry 77, namely persons entitled to practise before the Supreme Court was held to be in pari materia with the phrase ''persons practicing before the Court' as found in Article 145 (1)(a). In the light of the aforesaid wide sweep of Article 145 (1)(a), expressly saved by Section 52 of the Act it was held that the rule laying down examination to be undergone by practicing advocates before the Supreme Court before they could act as advocates on record was within the rule making power of the Supreme Court. It is difficult to appreciate how the aforesaid decision of the Constitution Bench rendered in the light of an entirely different constitutional scheme can be of any assistance to the Bar Council of India in the present case. For sustaining the rule making power of the Bar Council of India, the express provisions of Section 7 and Section 24 (3)(d) read with Section 49 (1)(ah) would be the only relevant provisions which were considered by this Court in a three Judge Bench judgment Indian Council of Legal Aid & Advice case (1995 AIR SCW 473) (supra). The ratio of the Constitution Bench judgment rendered in connection with an entirely different question posed for decision In the light of the relevant provisions of the constitutional scheme dealing with the rule making power of the Supreme Court under Article 145, therefore, cannot be said to be laying down anything contrary to what the three Judge Bench Judgment laid down in connection with this very statutory scheme which squarely arises for consideration in the present case. Hence, even the second ground canvassed by learned senior counsel, Shri Rao for the Bar Council of India, for whittling down the binding effect of the aforesaid three Judge Bench judgment of this Court, cannot be sustained".

(Emphasis supplied)

In Director of Settlements, A.P. and others Vs. M.R. Apparao and another, AIR 2002 Supreme Court 1598, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7. So far as the first question is concerned. Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ''declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle under-lying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An ''obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be dented that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR 1970 SC 1002 and AIR 1973 SC 794). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court, which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324). We have to answer the first question bearing in mind the aforesaid guiding principles. We may refer to some of the decisions cited by Mr. Rao in elaborating his arguments contending that the judgment of this Court dated 6th February, 1986 cannot be held to be a law declared by the Court within the ambit of Article 141 of the Constitution. Mr. Rao relied upon the judgment of this Court in the case of Pandit M.S. M. Sharma v. Shri Sri Krishna Sinha and others, 1959 Suppl (1) SCR 806, wherein the power and privilege of the State Legislature and the fundamental right of freedom of speech and expression including the freedom of the press was the subject matter of consideration. In the aforesaid judgment it has been observed by the Court that the decision in Gunupati Keshavram Reddy v. Nafisul Hasan, AIR 1954 SC 636, relied upon by the counsel for the petitioner which entirely proceeded on a concession of the counsel cannot be regarded as a considered opinion on the subject. There is no dispute with the aforesaid proposition of law."

(Emphasis supplied)

In State of Bihar Vs. Kalika Kuer @ Kalika Singh and others, AIR 2003 Supreme Court 2443: JT 2003 (4) SC 489 (supra), their Lordships of the Supreme Court held as under (paragraph 9 of the said AIR) :

"9. In Fuerst Day Lawson Ltd. v. Shivaraj V. Patil (2001) 6 SCC 356, this Court observed :

"A prior decision of the Supreme Court on identical facts and law binds the Court on the same points of law in a latter case. In exceptional instances, where obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, the principle of per incuriam may apply. Unless it is a glaring case of obtrusive omission, it is not desirable to depend on the principle of judgment "per incuriam". It has to be shown that some part of the decision was based on a reasoning which was demonstrably wrong, for applying the principle of per incuriam."

(Emphasis Supplied)

Keeping in view the above legal position, let us consider the submission of the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam.

In the present case, Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that the Affidavit verifying the petition shall be in Form No. 3.

The Companies (Court) Rules, 1959 do not contain any provision prohibiting the Court from permitting a proper Affidavit to be filed. In fact, Rule 17 of the said Rules lays down that the Forms set forth in Appendix I, where applicable, shall be used "with such variations as circumstances may require".

Moreover, Rule 9 of the Companies (Court) Rules, 1959 lays down that nothing in the said Rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

As there is no rule prohibiting the Court from permitting a proper Affidavit to be filed, it cannot be said that any statutory provision was ignored by the Supreme Court in Malhotra Steel Syndicate case (supra).

Further, there was no decision binding on the Supreme Court in this regard. The decisions on the question under consideration, which have been relied upon by the learned counsel for the Respondent-Company, were those given by the High Courts.

Therefore, it cannot be said that any binding decision was ignored by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

Hence, it is evident that neither any statutory provision nor any binding decision contrary to or inconsistent with the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) was ignored by the Supreme Court while giving the said decision.

Moreover, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the petition was not in proper Form and that the petition could not be entertained.

Having regard to the facts of the case, as evidently incorporated in the Division Bench decision of the Punjab and Haryana High Court, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding-up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was any defect or irregularity in the Affidavit, opportunity should have been given to rectify the same.

Thus, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) clearly shows that the Supreme Court was conscious of the requirements of the Companies (Court) Rules, 1959, and keeping in view the same, it gave its decision in Malhotra Steel Syndicate case (supra). Merely because the provisions of the Companies (Court) Rules, 1959 have not been specifically referred to in the decision in Malhotra Steel Syndicate case (supra), the same cannot be construed to mean that the said decision was given in ignorance of the provisions of the said Rules.

Thus, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be said to be per incuriam, as submitted by the learned counsel for the Respondent-Company.

The learned counsel for the Respondent-Company has also submitted that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not a binding precedent under Article 141 of the Constitution of India, as the Supreme Court did not consider the relevant provisions, and no ratio can be culled out from the said decision.

Reliance in this regard has been placed on the following decisions :

1-Krishena Kumar Vs. Union of India and others, AIR 1990 Supreme Court 1782 (supra).

2-Government of India Vs. Workman of State Trading Corporation & others (1997) 11 SCC 641 (supra).

3-Islamic Academy of Education and another Vs. State of Karnataka and others, 2003 (6) Supreme Court Today 303 = (2003) 6 Supreme Court Cases 697==AIR 2003 SC 3724 (supra).

Having considered the submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

Various principles, which follow from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), have already been noted in the earlier part of this judgment. Therefore, it is not correct to suggest that no ratio can be culled out from the said decision.

As regards the decisions relied upon by the learned counsel for the Respondent-Company in this regard, let us first take up Krishena Kumar case, AIR 1990 Supreme Court 1782 (supra).

In this case, their Lordships of the Supreme Court laid down as under (paragraphs 17, 18 and 19 of the said AIR ):

"17. The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara's case and how far that would be applicable to the case of the P.F. retirees.

18. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required." This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees (1882 (7) AC 259) and Lord Halsbury in Quinn v. Leathem (1901) AC 495 (502). Sir Frederick Pollock has also said : "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."

19. In other words, the enunciation of the reason or principle upon which a question before a Court has been decided is alone as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol.26, para 573 :

"The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to be bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi."

(Emphasis supplied)

This decision thus lays down that the underlying principle, that is, the general / abstract reasons or the general /abstract grounds upon which the decision is based ( as distinguished from the concrete /specific peculiarities of the particular case) form the ratio decidendi. If the ratio decidendi is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it.

Applying the above propositions to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the underlying principles, that is, the general/ abstract reasons or the general /abstract grounds upon which the said decision is based, have already been noted in the earlier part of this judgment, and the same form the ratio decidendi of the said decision in Malhotra Steel Syndidate case (supra).

In Government of India case, (1997) 11 SCC 641 (supra), the Madras High Court had relied upon a decision of the Supreme Court in G. Govinda Rajulu Vs. A.P. State Construction Corporation Ltd., 1986 Suppl SCC 651.

The Supreme Court in Government of India case (supra) held that the decision in G. Govinda Rajulu case "is virtually a non-speaking order which does not set out the facts and the circumstances in which the direction came to be issued against the Government. It is not clear as to what was the connection between the respondent-Corporation and the State Government...................it does not set out the facts or the reason for the conclusion or direction given. It can, therefore, not be treated as a binding precedent."

(Emphasis supplied)

The above propositions laid down in Government of India case (supra) have no application to the decision in Malhotra Steel Syndicate case (supra).

The decision in Malhotra Steel Syndicate case cannot be described as non-speaking order. The said decision refers to the material facts and circumstances necessary for deciding the case. It gives reasons for the conclusions drawn and the directions given in the decision.

In Islamic Academy of Education and another Vs. State of Karnataka and others, (2003) 6 Supreme Court Cases 697 (supra), their Lordships of the Supreme Court laid down as under (Paragraphs 139, 140, 141, 142, 143, 144, 145, and 146 of the said SCC) :

"139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj, (2001) 2 SCC 721).

140. In Padma Sundara Rao v. State of T.N., (2002) 3 SCC 533, it is stated (SCC p. 540, paragraph 9):

"There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial ulterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board, [1972] UKHL 1; (1972) 1 All ER 749 (HL) (Sub nom British Railways Board v. Herrington), Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases."

(See also Haryana Financial Corpn. V. Jagdamba Oil Mills,(2002) 3 SCC 496)

141. In General Electric Co. v. Renusagar Power Co., [1987] INSC 207; (1987) 4 SCC 137, it was held : (SCC p. 157, paragraph 20)

"As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words ''adjudication of the merits of the controversy in the suit' were used by this Court in State of U.P. v. Janki Saran Kailash Chandra, AIR 1973 SC 2071, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided."

142. In Rajeswar Prasad Misra v. State of W.B., [1965] INSC 130; AIR 1965 SC 1887 (sic) it was held :

"Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments. It is also well known that ratio of a decision is the reasons assigned therein."

(See also Amar Nath Om Prakash v. State of Punjab, (1985)1 SCC 345 and Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573.)

143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, wherefor, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.

144. In Keshav Chandra Joshi v. Union of India, 1992 Suppl (1) SCC 272, this Court when faced with difficulties where specific guidelines had been laid down for determination of seniority in Direct Recruit Class II Engg. Officers' Assn. V. State of Maharashtra, (1990) 2 SCC 715, held that the conclusions have to be read along with the discussions and the reasons given in the body of the judgment.

145. It is further trite that a decision is an authority for what it decides and not what can be logically deduced therefrom. (See Union of India v. Chajju Ram, (2003) 5 SCC 568.)

146. The judgment of this Court in T.M.A. Pai Foundation, (2002) 8 SCC 481, will, therefore, have to be construed or to be interpreted on the aforementioned principles. The Court cannot read some sentences from here and there to find out the intent and purport of the decision by not only considering what has been said therein but the text and context in which it was said. For the said purpose the Court may also consider the constitutional or relevant statutory provisions vis-à-vis its earlier decisions on which reliance has been placed."

(Emphasis supplied)

This decision, thus, lays down that the ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal.

This decision also lays down that a decision is an authority for what it decides and not what can be logically deduced therefrom.

Applying the above tests to the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), a reading of the said judgment in its entirety shows that the said judgment is based on the principles and reasons enumerated in the earlier part of this judgment. The said principles and reasons, therefore, constitute the ratio decidendi of the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra).

The question may be examined from another angle also, as submitted by the learned counsel for the Petitioner-Company.

Article 141 of the Constitution of India lays down as under :

"141. Law declared by Supreme Court to be binding on all Courts.--The law declared by the Supreme Court shall be binding on all Courts within the territory of India."

In view of Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts including the High Courts of the country.

Therefore, the decisions of the Supreme Court are binding on all Courts including the High Courts of the country.

It is not open to any High Court to by-pass the binding nature of the decision of the Supreme Court on the ground that certain aspects were not considered in the decision of the Supreme Court. Even if certain aspects were not specifically examined by the Supreme Court in its decision or certain statutory provisions were not specifically referred to by the Supreme Court in its decision, the same cannot take away the binding nature of the decision of the Supreme Court.

In view of the above legal position, it is evident that even if the submissions made by the learned counsel for the Respondent-Company that the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 have not been specifically referred to by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra), were to be accepted, still, the said decision of the Supreme Court will not lose its binding force on this Court.

The above legal position is apparent from the various decisions relied upon by the learned counsel for the Petitioner-Company.

In Union of India Vs. Firm Ram Gopal Hukum Chand and others, AIR 1960 Allahabad 672, a learned Single Judge of this Court held as under (paragraphs 25, 26, 27, 28 and 34 of the said AIR) :

"25. Two questions arise in this connection. First, under what circumstances will a legal principle enunciated by the Supreme Court amount to a declaration of law under Art. 141, and secondly, does this Article apply only to express declaration of law or also to those which are clearly implied ? It is necessary to examine the scope and purpose of Art. 141.

26. In the various authorities cited before me, it has been overlooked--if I may say so with deep respect---that the doctrine of the supremacy of any declaration of law by the Supreme Court has been made a part of the constitutional law of the re-public. It therefore rests on a much loftier pedestal than judicial conventions under which every inferior court is bound to follow the previous decisions of a Superior Court.

If the object had been merely to guarantee the binding force of the decisions of the Supreme Court as the highest court of the republic, no special provisions in the Constitution was required. The founders were not inserting a superfluous or redundant article in the Constitution. Many of them were eminent lawyers and jurists, and well acquainted with judicial practice and principles according to which the decisions of the Supreme Court have the same binding force as those of the House of Lords in England even without Art. 141.

27. But they were not content with the mere binding force of the decisions of the Supreme Court. The language of Art. 141 shows that the Founders intended to extend its scope beyond the actual decisions of the Supreme Court to every declaration of law made by it. This is clear from a comparison of the language of the Article with that of Sec. 212 of the Government of India Act, 1935, which gave a binding force to the decisions of the old Federal Court.

That Section provided that "the law declared by the Federal Court and by any judgment of the Privy Council shall, so far as applicable, be binding on and shall be followed by all Courts in British India". But Art. 141 of our Constitution provides that "the law declared by the Supreme Court shall be binding on all courts within the territory of India". The word "judgment" is not used, and the qualifying words "as far as applicable" have been deleted.

The omission is significant and negatives any suggestion that the Founders had in mind the principle of ratio decidendi or the binding effect of decisions, but nothing more. I am inclined to the view that Art. 141 has the effect, in addition to investing the decisions of the Supreme Court with a binding force, of creating a constitutional organ whose declaration of law pronounced ex cathedra shall be binding on all courts in the republic.

Under this article it is not necessary that a pronouncement of the Supreme Court should be part of the ratio decidendi of any judgment. An obiter dictum or a mere enunciation of a principle of law would amount to a declaration of law under Art. 141, and the manner and circumstances of its pronouncement are immaterial, provided it is made by the Supreme Court ex cathedra.

28. It was argued by Mr. Sapru that the extension of Article 141 to obiter dicta or observations which do not form part of the ratio decidendi of a judicial decision would tie up the discretion of the High Courts even in matters not decided by the Supreme Court, and it could not have been the intention of the Founding fathers to fetter the powers of the High Court to this extent. There is a short answer to this argument.

There is not the slightest ground for fearing if I may venture to say with profound respect - that the highest court of the Republic is likely to make an unrestricted use of its powers under Article 141 and flood the realm with unnecessary declarations of law. On the contrary, the Supreme Court have already taken the strict view that no principle of law should be proclaimed by it unless required for the decision of a matter in dispute before the Court.

In Central Bank of India v. Their Workmen, [1959] INSC 82; AIR 1960 SC 12, a Bench of five judges of the Supreme Court observed that it was not necessary for the Court to decide hypothetical questions which may arise in any future reference and that the Court does not give speculative opinions in the exercise of its appellate powers. Again, in Basheshar Nath v. Commr. of Income-tax, [1958] INSC 117; AIR 1959 SC 149, Das, C.J. and Kapur, J. took the view that the Supreme Court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it.

Thus the judges of the Supreme Court are, if I may say so again with profound respect, conscious that any pronouncement of law by the Court acquires "potency" under Art. 141 and that therefore such declarations should be made only when necessary. But this is a matter concerning the self-discipline of the Supreme Court which does not affect the Constitutional doctrine that any declaration of law, howsoever made, by the Supreme Court, is binding on all courts in India.

34. For these reasons I am of the opinion that Art. 141 extends to every declaration of law made by the Supreme Court even if it is obiter or not the foundation of its decision in a dispute before it. I am fortified in this view by several opinions of various High Courts, though my reasons are different. K.P. Doctor v. State of Bombay, (S) AIR 1955 Bom 220 (FB), Surajmal v. State of M.P., AIR 1958 Madh Pra 103 (FB), Sharda Prasad v. Accountant General, (S) AIR 1955 All 496. I am further of the opinion that a declaration of law may be expressed or may be indicated by clear implication.

I am also of the opinion that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law. Any re-consideration can only be done by the Supreme Court itself. Meanwhile the High Court must follow it, though it may respectfully draw the attention of the Supreme Court for consideration on a future occasion.

In fact, it may be not only the privilege but the duty of the High Court to assist the Supreme Court in its task of clearing up the litter of conflicting decisions and introducing tidiness and uniformity of legal principles over as large a field as possible by bringing it to its notice any matter requiring re-consideration --- I say ''duty' because the number of cases agitated before the High Courts all over India is much larger than those which eventually reach the Supreme Court."

(Emphasis supplied)

Thus, this decision has laid down that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law.

In Ram Manohar Lohia and others Vs. State of U.P. and others, AIR 1968 Allahabad 100, this Court held as under (paragraphs 12 and 13 of the said AIR) :

"12. It is no doubt true that in Babulal Parate's case[1961] INSC 10; , AIR 1961 SC 884 it does not appear to have been contended on behalf of the petitioners that the power conferred by Section 144 Cr. P.C. is not in the interests of things specified in clauses (2) and (3) of Article 19 of the Constitution and the section is, therefore, ultra vires, irrespective of the fact whether the restrictions it imposes are reasonable or not. But it is not possible on that basis to contend that the Supreme Court did not consider the constitutionality of the section from that point of view also. The question of the reasonableness of restrictions could arise only when the power to impose restrictions was found to be present and, therefore, the contention that the Supreme Court did not consider whether such a power really existed is unacceptable. Para 16 of the report of the judgment in that case clearly indicates that their Lordships considered the question whether the activities with regard to which the Magistrate is entitled under Section 144 Cr. P.C. to place restraint are such that their prevention would be in the interests of public order and held that they are such activities. If any doubt is still left about the scope and effect of this decision it should be dispelled by the final conclusion reached by their Lordships. That conclusion has been stated in para 34 of the report and is as follows :-

"We have, therefore, reached the conclusion that the order of the District Magistrate is not unconstitutional either because section 144 is itself violative of fundamental rights recognized in Article 19 or on the ground that it is vague and places unreasonable restrictions on those fundamental rights."

The opinion expressed in the case by their Lordships, therefore, is that section 144 Cr. P.C. does not violate Article 19 of the Constitution, and it necessarily means that such parts of the section as may have the effect of placing restrictions on the rights guaranteed under Article 19(1) (a) and (b) are respectively protected by clauses (2) and (3) of Article 19. This being the law declared by the Supreme Court it is binding on this Court under Article 141 of the Constitution and even the first ground on which the validity of section 144 has been challenged on behalf of the petitioners must accordingly be rejected.

13. The contention that such observations of the Supreme Court in the above case as cover matters beyond the reasonableness of the restrictions placed on certain fundamental rights by section 144 Cr. P. C. are obiter and, therefore, of no binding effect is wholly misconceived. A declaration of law made by the Supreme Court is not a mere precedent and the necessity of the declaration is not a condition of its binding effect. Even if such a declaration is in the nature of an obiter Article 141 of the Constitution makes it binding on all courts. But quite apart from this, it is obvious that the question whether clauses (2) and (3) of Article 19 at all permit the imposition of restrictions is logically prior to the question of the reasonableness of the restrictions, and no part of the observations of their Lordships relating to the constitutionality of section 144 Cr. P.C. was, therefore incidental or unnecessary for the decision of the case and no part of the observations can be regarded as obiter. It is a matter of no consequence that the constitutionality of section 144 Cr. P.C. was challenged in that case only on the narrow ground of the reasonableness of the restrictions placed by it and not also on the wider ground of the total absence of the power to place restrictions. A declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it. And this would be specially so when the law declared is in regard to the constitutionality of a statute or a rule, and in such a case the binding effect of the declaration cannot be measured by or limited to the points raised on behalf of the parties or to which express reference is made in the judgment. In this connection I may refer to the following cases."

(Emphasis supplied)

Thus, this decision has laid down that a declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it.

In Ballabhdas Mathuradas Lakhani and others Vs. Municipal Committee, Malkapur, AIR 1970 Supreme Court 1002 (supra), their Lordships of the Supreme Court observed as under (paragraph 4 of the said AIR) :

"4. The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, 1965-3 SCR 499 = [1965] INSC 81; (AIR 1966 SC 249). That case arose under the C.P. & Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66 (1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a taxpayer. This Court held that levy of tax on cotton ginned by the taxpayer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court".

(Emphasis supplied)

Thus, this decision has laid down that a decision of the Supreme Court is binding on the High Court and the High Court cannot ignore it on the ground that relevant provisions were not brought to the notice of the Supreme Court.

In T. GOVINDARAJA MUDALIAR ETC. ETC. Vs. THE STATE OF TAMIL NADU AND OTHERS, [1973] INSC 1; (1973) 1 SCC 336 (supra), their Lordships of the Supreme Court opined as under (paragraphs 10 and 11 of the said SCC) :

"10. The argument of the appellants in that prior to the decision in Rustom Cavasjee Cooper's case (supra), it was not possible to challenge Chapter IV-A of the Act as violation of Article 19(1)(f) owing to the decision of this Court that Article 19(1)(f) could not be invoked when a case fell within Article 31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Article 19(1)(g), and clause (f) of that article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji Munji's case (supra), and other decisions which followed it were based mainly on an examination of the inter-relationship between Article 19(1)(f) and Article 31(2). There is no question of any acquisition or requisition in Chapter IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case (supra), after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Article 19(1)(f). It was, therefore, open to those effected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Article 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument. In this connection we may refer to the observations of this court in Mohd. Ayub Khan v. Commissioner of Police, Madras and another, (1965) 2 SCR 884=AIR 1965 SC 1623, according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawati and Others v. The State of Punjab and Others, 1963 (2) SCR 774 = [1962] INSC 182; AIR 1963 SC 151, a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Article 31 (2) but it would be still open to challenge under Article 19(1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :

"The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided."

11. It is common ground in the present cases that the validity of Chapter IV-A of the Act has been upheld on all previous occasions. Merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) was not expressly considered or a decision given thereon will not take away the binding effect of those decisions on us."

(Emphasis supplied)

This decision has thus laid down that if the Supreme Court gave its decision in regard to a question, and the decision has been followed in other cases then binding effect of the decision of the Supreme Court cannot be taken away on the ground that certain aspects pertaining to the said question were not brought to the notice of the Supreme Court.

As noted above, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Pvt. Ltd. case (supra), by the Andhra Pradesh High Court in D & H SECHERON ELECTRODES (P.) LTD. case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In Ambika Prasad Mishra Vs. State of U.P. and others, AIR 1980 Supreme Court 1762 (supra), their Lordships of the Supreme Court held as under (paragraphs 5 and 6 of the said AIR) :

"5. .......................It is significant that even apart from the many decisions upholding Art. 31A, Golak Nath's case [1967] INSC 45; (1967) 2 SCR 762 : [1967] INSC 45; (AIR 1967 SC 1643) decided by a Bench of 11 Judges, while holding that the Constitution (First Amendment) Act exceeded the constituent power still categorically declared that the said amendment and a few other like amendments would be held good based on the doctrine of prospective overruling. The result, for our purpose, is that even Golak Nath's case has held Art. 31A valid. The note struck by later cases reversing Golak Nath does not militate against the vires of Art. 31A. Suffice it to say that in the Kesavananda Bharti's case, 1973 Supp SCR 1 : (AIR 1973 SC 1461) Art. 31A was challenged as beyond the amendatory power of Parliament and, therefore, invalid. But, after listening to the marathon erudition from eminent counsel, a 13 Judge Bench of this Court upheld the vires of Article 31A in unequivocal terms. That decision binds, on the simple score of stare decisis and the constitutional ground of Art. 141. Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. In this view, other submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to re-open what was laid down for the guidance of the nation as a solemn proposition by the epic fundamental rights case. From Kameshwear Singh, AIR 1952 SC 252 and Golak Nath (1967) through Kesavananda (1973) and Kannan Devan[1972] INSC 125; , (1973) 1 SCR 356 : [1972] INSC 125; (AIR 1972 SC 2301) to Gwalior Rayons[1973] INSC 167; , (1974) 1 SCR 671 : (AIR SC 2734) and after Art. 31A has stood judicial scrutiny although, as stated earlier, we do not base the conclusion on Article 31A. Even so, it is fundamental that the nation's Constitution is not kept in constant uncertainty by judicial review every season because it paralyses, by perennial suspense, all legislative and administrative action on vital issues deterred by the brooding threat of forensic blow-up. This, if permitted, may well be a kind of judicial destabilization of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake-up. It is surely wrong to prove Justice Roberts of the United States Supreme Court right when he said :Lonnie E. Smith v. S.E. Allwright, [1944] USSC 108; (1944) 321 US 649, 669 and 670--

"The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same class as a restricted railroad ticket good for this day and train only..............................................

It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

.............It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

6.It is wise to reminder that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned" (Salmond 'Jurisprudence' p. 215 (11th edition). And none of these misfortunes can be imputed to Bharti's case (AIR 1973 SC 1461) (supra )......"

(Emphasis supplied)

This decision has, therefore, laid down that the binding effect of a decision cannot be taken away or undone on the ground of every new discovery or argumentative novelty. The decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned.

In Anil Kumar Neotia and others Vs. Union of India and others, AIR 1988 Supreme Court 1353 (supra), their Lordships of the Supreme Court held as under (paragraph 18 of the said AIR) :

"18. In that view of the matter this question is no longer open for agitation by the petitioners. It is no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged. See in this connection the observations of this Court in T. Govindraja Mudaliar v. State of Tami Nadu [1973] INSC 1; (1973) 3 SCR 222 : [1973] INSC 1; (AIR 1973 SC 974), where this Court at pp. 229 and 230 of the report (SCR) : (at p. 978 of AIR) observed as follows :

"The argument of the appellants is that prior to the decision in Rustom Cavasjee Cooper's case [1970] INSC 18; (AIR 1970 SC 564) it was not possible to challenge Chapter IV-A of the Act owing to the decision of this Court that Art. 19(1)(f) could not be invoked when a case fell within Art.31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Art. 19(1)(g), and Cl. (f) of that Article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji, Munji and other decisions which followed it were based mainly on an examination of the inter-relationship between Art. 19(1)(f) and Art. 31(2). There is no question of any acquisition or requisition in Chap. IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case [1960] INSC 101; (AIR 1960 SC 1080) after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Art. 19 (1)(f). It was, therefore, open to those affected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Art. 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument, in this connection we may refer to the observations of this Court in Mohd. Ayub Khan v. Commr. of Police Madras, (1965) 2 SCR 884 : [1965] INSC 21; (AIR 1965 SC 1623) according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawanti v. State of Punjab, (1963) 2 SCR 774 : [1962] INSC 182; (AIR 1963 SC 151) a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Art. 31 (2) but it would be still open to challenge under Art. 19 (1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :-

'The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided.' "

(Emphasis supplied)

Thus, it has been laid down in the above case that the binding effect of the decision of the Supreme Court deciding a particular question cannot be co-laterally challenged on the ground that certain points / aspects in regard to the said question were not urged before the Supreme Court. In case, a particular question has been decided by the Supreme Court in its decision then the binding effect of such a decision cannot be undone on the ground that a particular argument pertaining to the question under consideration was not considered in the said decision.

In Suganthi Suresh Kumar Vs. Jagdeeshan, (2002) 2 SCC 420 (supra), their Lordships of the Supreme Court held as under (paragraphs 9, 10 and 11 of the said SCC) :

"9. It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, [1988] INSC 120; (1988) 2 SCC 587 : [1988] INSC 120; AIR 1988 SC 1353, that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.

11. When this Court pronounced in Hari Singh v. Sukhbir Singh, [1988] INSC 242; (1988) 4 SCC 551 : [1988] INSC 242; AIR 1988 SC 2127, that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this Court. Hence learned Single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose, (2001) 3 KLT 431. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline the Single Judge of the High Court has incorrectly reversed it."

(Emphasis supplied)

The above case has thus laid down that it is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. The High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

In view of the propositions laid down in the above cases, it is evident that the binding effect of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be taken away on the ground that certain aspects were not considered in the said decision of the Supreme Court or certain relevant provisions of the Companies Act, 1956 and / or the Companies (Court) Rules, 1959 were not considered by the Supreme Court in the said decision. The questions to be considered by the Supreme Court in Malhotra Steel Syndicate case (supra) have already been indicated above. The Supreme Court gave its decision on the said questions. The decision of the Supreme Court is binding on this Court, not-with-standing the contention of the learned counsel for the Respondent-Company that certain aspects or certain relevant provisions in regard to the said questions were not considered in the decision of the Supreme Court.

The matter may be considered from yet another angle.

Even a-part from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position, in my opinion, still remains the same, namely, (1) The Affidavit filed in support of the Company Petition should substantially comply with the form and verification as provided in the Companies (Court) Rules, 1959; (2) Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity; (3) In case, there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same; (4) In case, the Affidavit, filed in support of the Winding up Petition is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

It is true that in view of sub-section (2) of Section 441 of the Companies Act, 1956, which is relevant in the present case, the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up.

In view of this provision, it is evident that the winding up order passed by the Court relates back to the time of the presentation of the Petition for the winding up.

However, the above provision will not create any complication even if opportunity is given to the Petitioner-Company to file a fresh Affidavit, in case, the Affidavit, filed in support of the Winding up Petition, is found to be defective. The fresh Affidavit will relate back to the date of filing of the Petition. Therefore, the Winding up Petition will be deemed to have been validly presented on the date on which it was originally presented.

In view of this, as noted in the earlier part of the judgment, various complications pointed out in the decision of the Calcutta High Court in Gaya Textiles case (supra) and in the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), would not arise.

The above legal position is supported by various decisions, which have been given without placing reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Mrs. Roma Deb and others Vs. R.C. Sood & Co. Pvt. Ltd., [1990] 67 Company Cases 350 (Delhi) (supra), the Delhi High Court held as follows (at pages 355 and 356 of the said Company Cases) :

"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, the court would do this 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. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 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" as 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 21 and Form No.3 merely stipulated an affidavit verifying the petition. I think Mr. Chopra is right in this submission of his.

It was not disputed that the court could permit amendment of the petition. As noted above, in the present case, the 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 for the original petitioner and in that case would permit such amendments of the petition as might be necessary. Under rule 102, the amended petition shall be treated as a 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 of 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 a 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 the 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 a 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, it 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 except that I would say that in case of a winding up petition, the 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 do not think there is any bar coming in my way in permitting the petitioners to file a proper affidavit verifying the petition."

(Emphasis supplied)

Thus, in MRS. ROMA DEB case (supra), the Delhi High Court has held that a defective affidavit verifying the petition for winding up cannot be treated as fatal to the petition. The principle governing the verification of a plaint, namely, that a defect in verification is only an irregularity in procedure which can be cured at any stage of the suit, can be imported for verification of a petition for winding up. However, the Court would not permit the rectification of the defect in the verification of a petition for winding up just as a matter of course, but would take into account all the relevant circumstances, including the conduct of the parties.

Where an amendment of the petition for winding up is permitted to be made for any reason, the amended petition relates back to the date of filing of the original petition. If amendment of the petition can be allowed, there is no reason as to why a defective affidavit verifying the petition could not be rectified. In the ends of justice and if the circumstances of the case so require, it is open to the Court, in its inherent powers, to allow the petitioner to present an affidavit in support of the petition in terms of Rule 21 and Form No. 3 of the Companies (Court) Rules, 1959, if the affidavit originally filed with the petition did not conform to Form No. 3.

In SUVARN RAJARAM BANDEKAR VS. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra), the Bombay High Court laid down as under (at pages 681 and 682 ) :

"...........................................................................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly even when there is some breach or omission, whether it can be fatal to the petition.

....................................................................................

This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition......."

(Emphasis supplied)

Thus, in SUVARN RAJARAM BANDEKAR case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen as to whether it can be fatal to the Winding up Petition.

In EMA INDIA LIMITED VS. TRACKPARTS OF INDIA LIMITED, [2001] 106 Company Cases 700 (Allahabad) (supra), a preliminary objection was raised that the Winding up Petition was not maintainable as it was contrary to Rule 21 of the Companies (Court) Rules, 1959 and Sri S.K. Nigam, who had verified the Winding up Petition, was neither a Director, Secretary or Principal Officer of the Petitioner-Company and, therefore, not competent to file the Winding up Petition. This Court rejected the preliminary objection and held as follows (at Pages 704 and 705 of the said Company Cases.):

" ............................................................

Learned counsel for the respondent-company has raised a preliminary objection regarding the maintainability of the petition on the ground that the same was not in accordance with rule 21 of the Companies (Court) Rules as Sri S.K. Nigam, who has filed the present petition on behalf of the petitioner was not competent to file the same as he is neither a director, secretary or the principal officer of the company. Along with the rejoinder affidavit, the petitioner has filed a copy of the resolution by which Sri P.K. Bhargava, the managing director of the petitioner was authorised to execute a power of attorney in favour of Sri S.K. Nigam, assistant general manager (import and export) for the purposes of filing the present company petition and to do all such acts and things as was necessary. The power of attorney executed by Sri P.K. Bhargava in favour of Sri S.K. Nigam is also on the record. Having considered the said documents and the submissions made by the parties, I am unable to hold that the present winding up petition has been filed by a person who was not authorised to do so or there has been any violation of the provisions of rule 21 of the Companies (Court) Rules. The preliminary objection, therefore, raised by learned counsel for the respondent is not tenable.

......................................................."

This decision relied upon by the learned counsel for the Petitioner-Company, is not relevant in the present case as it has not been disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit in support of the Company Petition, is an authorised person.

In SAND PLAST (INDIA) LTD. V. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Rajasthan), an objection was raised that the Affidavit filed in respect of the Winding up Petition was not in conformity with the provisions of the Companies Act, 1956 and the Rules made thereunder.

A Division Bench of the Rajasthan High Court laid down as under (at pages 483 and 484 of the said Rajasthan High Court):

" .........................................Likewise, rule 21, which provides for affidavit verifying a petition states that every petition shall be verified by an affidavit made by the petitioner and in case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof ; such affidavit shall be filed along with the petition and shall be in Form No.3. Whereas, in rule 18, which deals with affidavits and also prescribes procedure as to how the affidavit shall be drawn up. There is no form prescribed for the affidavits to be filed under the rules. Rule 21, which is undoubtedly statutory in nature and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be brushed aside. In our opinion, the affidavit filed in the present case, complies with the requirement of rule 21. In this case, the person who filed the affidavit in the winding up petition has disclosed the source of information on the basis of which he verified that the contents of the affidavit are believed to be true.

Rule 21 requires every petition for winding up of a company to be accompanied by an affidavit verifying the petition in Form No. 3. In our view, the defect if any, in the verification is only an irregularity in procedure, which can be cured at any stage of the proceedings. It is not an incurable defect as contended by Mr. Paras Kuhad. Even if there is a defect, an amendment of the petition and the affidavit can be permitted to be filed. The court, in our opinion, can in the ends of justice and in its inherent power allow the petitioner or a party to a proceeding to present an affidavit in support of the petition in terms of rule 21 and Form No.3. This power can be exercised if the affidavit originally filed with the petition did not conform to Form No.3. In our opinion, the affidavit filed with the company petition strictly conforms to rule 21 and the form prescribed, namely, Form No. 3. On the other hand, an affidavit filed under rule 18 shall be drawn up in the first person and shall state the full name, age, occupation, etc. An affidavit which is not in the prescribed form is of no value and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law and, therefore, it is liable to be rejected. Where an affidavit is filed under rule 18, the provisions of Order 19, rule 3 must be strictly observed and an affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.

In our opinion, rule 18 is of no application. The reliance sought to be placed by the appellant-company on rule 18 is misconceived since it deals with the affidavit in general, whereas, rule 21 deals with the requirement of an affidavit, i.e., to be filed in support of a substantive petition as in the instant case. In view of the fact that the affidavit sworn to by Shri Vivek Mazumdar verifying the winding up petition is in the prescribed form, the objections raised by the appellant are unsustainable."

(Emphasis supplied)

The Division Bench of the Rajasthan High Court further observed as under (at pages 488 and 489 of the said Company Cases) :

"Mr. Kuhad cited the case of Mool Chand Wahi's case [1986] 60 Comp Cas 198, wherein the Punjab and Haryana High Court held that the petition for winding up is required to be accompanied by an affidavit in due form and that if an affidavit is not in due form, no value can be attached to it. The Punjab and Haryana High Court was considering rules 11 (a), 18, 21 and Form No. 3 in that case.

In the appeal preferred, the Division Bench of the same High Court held that under rules 11(a), 18, 21 of the rules, a petition for winding up is required to be accompanied by an affidavit in a proper form and an affidavit which is not in due form is not valid. This judgment is reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H).

Learned counsel then relied on the case of Malhotra Steel Syndicate's case [1989] 65 Comp Cas 546 of the Punjab and Haryana High Court, Majithia J. has doubted the principles laid down in the aforementioned decisions. In para 9, the learned single judge has observed that, sitting singly, he is bound by the judgment reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H) and that he has got serious doubts about the correctness made in the judgment. The petition is liable to be rejected on the sole ground that the affidavit accompanying petition is not verified according to law. According to the learned Judge, it was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with rule 21 of the rules and irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. With respect to the learned judges of the Punjab and Haryuana High Court who rendered judgments reported in Mool Chand Wahi's case [1986] 60 Comp Cas 198 and Mool Chand Weahi's case [1986] 60 Comp Cas 402, we are unable to agree or subscribe with the proposition of law laid down by the said court. We have already held that an affidavit accompanying petition would not require compliance with rule 18 of the rules and rule 21 is the relevant rule and Form No.3 is the relevant from and no more. Another decision of the Punjab and Haryana High Court reported in Registrar of Companies, Punjab v. New Suraj Financers and Chit Fund Co. Pvt. Ltd. [1990] 69 Comp Cas 104, was cited. A learned single judge of the Punjab and Haryana High Court held (headnote):

"An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. Amendment of a petition for winding up, if allowed, relates back to the date of presentation of the petition. It would lead to a great deal of confusion if the petitioner were allowed to swear and supply a fresh affidavit at a later stage because rights of third parties would crop up.

Held, on the facts, that since the blanks indicating the numbers of the paragraphs in the affidavit filed in support of the petition had been left blank, it was not in accordance with law and the verification of the petition also could not be treated as being in accordance with law. The petition therefore, had to be dismissed."

For the reasons above mentioned, we are unable to agree with the proposition of law laid down by the learned single judge of the Punjab and Haryana High Court in this case."

(Emphasis supplied)

It will thus be seen that the Rajasthan High Court dissented from the view taken by the Punjab & Haryana High Court in various cases including Mool Chand Wahi case (supra) and Registrar of Companies, Punjab case (supra).

In view of the above, it is evident that independently of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position is the same as mentioned above.

In view of the aforesaid discussion, I am of the opinion that the aforementioned Company Application No. 72405 of 2004 (Paper No. A-10), filed on behalf of the Petitioner-Company, deserves to be allowed, and the same is, accordingly, allowed.

The prayer made in the said Application is granted. The Petitioner-Company is permitted to bring on record, the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure 'A' to the said Company Application (Paper No. A-10) and its supporting Affidavit, and it is directed that the said Affidavit, sworn on 13th April, 2004, will be read as being the Affidavit in support of the Company Petition.

In consequence of the above order, allowing the said Company Application (Paper No. A-10), the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9) (filed on behalf of the Respondent-Company) is liable to be dismissed, and the same is, accordingly, dismissed.

Dt. 07-12-2007/ak

Company Petition No. 46 of 2002/Resd.

Reserved

Company Petition No. 46 of 2002

M/s Paharpur Cooling Towers Ltd........................Petitioner

Versus

M/s Anuradha Masala Udhyog Pvt. Ltd. .................Respondent

*****

Hon'ble S.P.Mehrotra, J.

Order On

1-Company Application No. 73312 of 2004 (Paper No. A-9).

2-Company Application No. 72405 of 2004 (Paper No.A-10).

The aforementioned Company Petition No. 46 of 2002 has been filed by M/s Paharpur Cooling Towers Limited (Petitioner-Company), under Section 433 (e) read with Section 434 (1)(a) and Section 439 of the Companies Act, 1956, inter-alia, praying that the Respondent-Company, namely, M/s Anuradha Masala Udhyog Pvt. Lmt., having its Registered Office at 59/132-A, L-2-4, Akash Deep Building, Old Dalmandi, Nayaganj, Kanpur (U.P.) -208001 be wound up by this Court under the provisions of the Companies Act, 1956.

An Affidavit, sworn on 6th September, 2002 by Santosh John, stating himself to be an Officer in the Petitioner-Company, has been filed along with the said Company Petition.

On 10th September 2002, when the case was taken up, none appeared for the petitioner. Therefore, the Court by its order dated 10th September, 2002 directed that Company Petition be "put up tomorrow as a fresh matter before the appropriate Bench".

It further appears that by the order dated 12th September 2002, the Court permitted the Petitioner-Company to move Amendment Application for amending paragraph 1 of the Company Petition as the address of the Petitioner-Company for service of notice was mentioned, as that of its counsel at New Delhi.

The said order dated 12th September, 2002 is reproduced below :

"As prayed, list on 3rd October, 2002 to enable the petitioner to move amendment application for amending paragraph 1 of this petition, which states that the address of the petitioner for service of notice is of its counsel at New Delhi. Under the rules of the Court before filing any document or the Counter Affidavit its copy is required to be served on the other side and endorsement is to be obtained on the original, regarding receipt. It would be most unreasonable to expect the opposite party in response to the notice, if issued, to go to New Delhi to serve the copy of the Counter Affidavit."

It further appears that pursuant to the said order dated 12th September, 2002, an Amendment Application dated 30th September, 2002 (Paper No.A-5) was filed on behalf of the Petitioner-Company, inter-alia, praying for being permitted to amend Paragraph 1 of the Company Petition as also Prayer (b) in the Prayer Clause of the Company Petition.

By the order dated 3rd October 2002, the said Amendment Application dated 30th September, 2002 (Paper No. A-5) was allowed, and notice of the amended Company Petition was directed to be issued to the Respondent-Company. The said order dated 3rd October, 2002 is quoted below :

"Amendment Application dated 30-09-2002 is allowed, Necessary amendment may be incorporated in the original petition within three days. After amendment is in-corporated, notice of amended petition will be issued to the Respondent/ Company i.e. M/s Anuradha Masala Udhyog Pvt. Ltd. Notices will be made returnable at an early date."

It further appears that a Counter Affidavit, sworn on 12th October 2003, in reply to the said Company Petition was filed on behalf of the Respondent-Company.

The Petitioner-Company filed its Rejoinder Affidavit, sworn on 22nd November, 2003 (Paper No. A-12), in reply to the said Counter Affidavit filed in the main Company Petition.

It further appears that on 31st March, 2004, the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9), shown at Serial No. 1 above, was filed on behalf of the Respondent-Company.

It is, inter-alia, stated in the said Company Application (Paper No.A-9) that the Affidavit, filed in support of the Company Petition, is no Affidavit in the eyes of law, inasmuch as, the mandatory requirements of Rule 21 and Form 3 of the Companies (Court) Rules, 1959 have not been complied with; and that since there is no Affidavit in support of the Company Petition, as required by Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition, in this Form, is not maintainable and is liable to be dismissed.

It is, inter-alia, prayed in the said Company Application (Paper No. A-9) that the present Company Petition be dismissed as not maintainable.

An Affidavit, sworn on 30th March 2004, was filed in support of the said Company Application (Paper No. A-9).

By the order dated 31st March 2004, the Court, inter-alia, granted time to the learned counsel for the Petitioner-Company for filing reply to the said Application.

The said order dated 31st March, 2004 passed on the said Application (Paper No. A-9) is as follows :

"The present application has been filed today on behalf of the respondent-company.

Registry is directed to give appropriate number to the application.

Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted one week's time for filing reply to the present application. The respondent-company may file its Rejoinder Affidavit within another week thereafter.

List this case on 20-4-2004."

It further appears that on 17th April, 2004, the Petitioner-Company filed its Reply (Paper No.A-11) in reply to the Company Application (Paper No. A-9). The said Reply, filed on behalf of the Petitioner-Company, was accompanied by an Affidavit, sworn on 13th April, 2004.

It further appears that on 17th April, 2004, the Petitioner-Company also filed the aforementioned Company Application No. 72405 of 2004 (Paper No.A-10), shown at Serial No. 2 above, under Rules 6, 9 and 21 of the Companies (Court) Rules, 1959 read with Section 151 Code of Civil Procedure.

It is, inter-alia, stated in the said Application (Paper No. A-10) that the Affidavit filed on behalf of the Petitioner-Company in support of the Company Petition substantially complied with the requirements of Form 3 of the Companies (Court) Rules, 1959, but in order to put the controversy to rest, the Petitioner-Company seeks leave of this Court to file an additional Affidavit of Santosh John, who is working as Assistant Manager (Administration) with the Petitioner-Company, in support of the said Company Petition verbatim as prescribed in Form 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959.

An Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as an Assistant Manager with the Petitioner-Company, was filed along with the said Company Application (Paper No. A-10) in support of the said Application (Paper No.A-10).

Further, an Affidavit, sworn on 13th April, 2004 by Santosh John, stating himself to be working as Assistant Manager (Administration) with the Petitioner-Company, was filed in Form No.3 as Annexure ''A' to the said Company Application (Paper No.A-10) and its supporting Affidavit.

It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file an Affidavit in the prescribed Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959 of Santosh John, Assistant Manager (Administration), which has been annexed as Annexure ''A' to the said Company Application (Paper No. A-10).

It further appears that on 10th May, 2004, a Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No. A-14), was filed on behalf of the Respondent-Company in reply to the aforesaid Reply (Paper No. A-11), filed on behalf of the Petitioner-Company.

Further, on 10th May, 2004, a Counter Affidavit, sworn on 30th April, 2004 (Paper No. A-13), was also filed on behalf of the Respondent-Company in reply to the aforesaid Company Application (Paper No.A-10), filed on behalf of the Petitioner-Company.

In the circumstances, the Court passed the following order on 10th May, 2004:

"Counter Affidavit has been filed today on behalf of the Respondent-Company in reply to Civil Misc. Application No. 72405 of 2004 (Paper No. A-10).

Sri Rajiv Nayan holding brief for Sri Deepak Sabarwal, learned counsel for the petitioner prays for and is granted two weeks' time for filing Rejoinder Affidavit to the said Counter Affidavit.

Rejoinder Affidavit has been filed today on behalf of the Respondent-Company against the reply filed on behalf of the petitioner (Paper No.A-11) in respect of Civil Misc. Application No. 73312 of 2004 (Paper No. A-9) filed on behalf of the Respondent-Company.

List this case on 9-7-2004"

On 9th July, 2004, a Rejoinder Affidavit, sworn on 8th July, 2004, was filed on behalf of the Petitioner-Company in reply to the aforesaid Counter Affidavit (Paper No.A-13), filed on behalf of the Respondent-Company.

I have heard Sri Anil Sharma, learned counsel for the Respondent-Company and Sri Deepak Sabarwal, learned counsel for the Petitioner-Company at length in respect of the aforesaid Company Application No.73312 of 2004 (Paper No. A-9) as also the aforesaid Company Application No. 72405 of 2004 (Paper No. A-10), and perused the record.

Sri Anil Sharma, learned counsel for the Respondent-Company has made the following submissions :

1-Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition, presented by a body corporate, shall be verified by an Affidavit made by a Director, Secretary or other Principal Officer of such body corporate. The said Rule 21, inter-alia, further provides that the said Affidavit shall be filed alongwith the Company Petition and shall be in Form No.3.

2. It is not disputed that the Affidavit in support of the present Company Petition has been given by Santosh John who is a Principal Officer of the Petitioner-Company. However, verification of various paragraphs of the Company Petition has not been done as per the requirements of paragraph 2 of the Affidavit given in Form No.3 of the Companies (Court) Rules, 1959.

It is pointed out that paragraph 2 of the Affidavit, given in Form No. 3 of the Companies (Court) Rules, 1959, makes it obligatory upon the deponent of the Affidavit to state as to which paragraphs of the Company Petition are true to his personal knowledge and which paragraphs of the Company Petition are based on information. This mandatory requirement has not been complied with in the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition.

Consequently, the said Affidavit filed in support of the present Company Petition is no Affidavit in the eyes of law. As there is no Affidavit in support of the present Company Petition as per the requirements of Rule 21 of the Companies (Court) Rules, 1959, the present Company Petition is not maintainable and is liable to be dismissed, as prayed for in the said Company Application (Paper No. A-9).

3. In a Winding up Petition, if the supporting Affidavit is not in Form No.3, then there is no Winding up Petition before the Court. This is because, the statement made in the Winding up Petition must be supported by an Affidavit in Form No. 3, as provided in Rule 21 of the Companies (Court) Rules, 1959.

4. The Petitioner-Company has taken contradictory stand in its Reply (Paper No. A-11). On the one hand, the Petitioner-Company maintains that the Affidavit filed in support of the present Company Petition substantially complied with all the requirements of Form No. 3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company sought permission /opportunity to file a fresh Affidavit in support of the present Company Petition in accordance with the relevant Rule and Form as per the provisions of the Companies (Court) Rules, 1959.

Reference is made to paragraphs 3 and 4 of the preliminary objections and paragraph 6 of the Reply on merits, as contained in the said Reply (Paper No. A-11) filed on behalf of the Petitioner-Company.

5. Section 441 of the Companies Act, 1956, inter-alia, provides that the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up. Therefore, the date of presentation of the Petition for the winding up, duly supported by an Affidavit, as required by the Companies (Court) Rules, 1959, is the material date.

As such, it is not open to the Petitioner-Company to file an Affidavit subsequent to the presentation of the Petition for the winding up. The Affidavit in proper Form must accompany the Petition for the winding up. Subsequently, the Petitioner-Company cannot be permitted to file an Affidavit in Form No. 3. Once, the Petition for the winding up is presented, then at no stage, the Petitioner-Company can be permitted to file an Affidavit in Form No. 3.

6. It is pointed out that the winding up order relates back to the date of presentation of Winding up Petition. In case, permission is granted to file an Affidavit in Form No.3 subsequent to the presentation of the Winding up Petition, then various difficulties/ complications would arise.

It is submitted that a proper Affidavit must accompany the Winding up Petition at the time of presentation of the Petition. In case, proper Affidavit is not filed with the Winding up Petition when presented, the Petition would be a defective Petition. Such a Petition would be no Petition in the eyes of law.

Now if the defect in the Winding up Petition is permitted to be removed subsequently by permitting the petitioner to file a fresh Affidavit then the Winding up Petition would be deemed to be presented on the date of removal of such defect.

This will result in various difficulties / complications. For example, the Company in question, may transfer its assets during the period between the date of presentation of the Winding up Petition and the date of filing of subsequent Affidavit, and may contend that such transfer cannot be assailed on the ground of fraud as there was no Winding up Petition pending in the eyes of law on the date of such transfer.

Similarly, during the period between the date of presentation of Winding up Petition and the date of filing of subsequent Affidavit, the debt on the basis of which the Winding up Petition has been filed, may become time-barred. Now the Winding up Petition cannot be filed on the basis of such time-barred debt. Permitting the petitioner to file subsequent Affidavit will result in the entertainment of the Winding up Petition on the basis of such time-barred debt.

It is also pointed out that under Section 447 of the Companies Act, 1956, the winding up order operates in favour of all the creditors and of all the contributories of the Company as if it had been made on the joint Petition of a creditor and of a contributory.

In case, permission is granted to file Affidavit subsequently, further complications would arise in view of the provisions of Section 447 of the Companies Act, 1956.

7. Sri Sharma has placed reliance on the following decisions:

(i)- In the matter of Gaya Textiles Private Ltd. etc. and Star Textile Engineering Works Ltd., AIR 1968 Calcutta 388 (Paragraphs 4, 5, 11 and 12).

(ii)- Mool Chand Wahi vs. National Paints Pvt. Ltd. & another, [1986] 60 Company Cases 198 (P. and H.), which was a decision by a learned Single Judge of the Punjab and Haryana High Court.

(iii)- Mool Chand Wahi vs. National Paints (Pvt.) Ltd. & another, [1986] 60 Company Cases 402 (P. and H.), wherein a Division Bench of the Punjab and Haryana High Court affirmed the aforesaid decision of the learned Single Judge in Mool Chand Wahi case (supra).

(iv)- Registrar of Companies, Punjab Vs. New Suraj Financiers and Chit Fund Co. (P) Ltd., [1996] 4 Company Law Journal 308 (P & H) :[1990] 69 Comp Cases 104 (P. & H.).

In reply, Sri Deepak Sabarwal, learned counsel for the Petitioner-Company has made the following submissions:

1. It is not disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit filed along with the Company Petition, was authorised to swear Affidavit on behalf of the Petitioner-Company.

The objection raised on behalf of the Respondent-Company is only in regard to the Form of the said Affidavit, namely, verification of the contents of the Company Petition as contained in paragraph 2 of the said Affidavit.

Reference in this regard is made to paragraph 9 of the Rejoinder Affidavit, sworn on 30th April, 2004 (Paper No.A-14), filed on behalf of the Respondent-Company.

In the said paragraph 9 of the Rejoinder Affidavit, it is, inter-alia, stated as follows ".......It is no where stated by the Respondent-Company that Sri Santosh John was not authorised."

2. Three questions arise for consideration in the present case:

(A) If the Affidavit in support of the Winding up Petition is not para-materia with the prescribed Form No.3, is the Winding up Petition liable to be dismissed ? In other words, whether strict compliance with Form No.3 is necessary or substantial compliance with Form No.3 would suffice ?

(B) Is the prescription in Form No.3 mandatory in nature ? In other words, whether non-compliance with Form No. 3 is an illegality, or is a mere irregularity ?

(C ) In case, the Affidavit filed in support of the Winding up Petition is found to be defective on account of non-compliance with Form No. 3, whether fresh opportunity should be given to rectify the defect ?

Answering the above questions, it is submitted :

(A)Substantial compliance, and not strict compliance, with Form No.3 is necessary.

(B)In case, there is any non-compliance with Form No. 3, the same is a mere irregularity.

(C)In case, the Affidavit is found to be defective on account of non-compliance with Form No.3, then opportunity should be given to rectify the defect.

Reliance in this regard is placed on the decision of the Apex Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., 1993 Supp. (3) Supreme Court Cases 565.

3. In view of the aforementioned Supreme Court decision in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd. case (supra), overruling the Division Bench decision of the Punjab and Haryana High Court, the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), relied upon by the learned counsel for the Respondent-Company, stood overruled.

Similar will be the fate of the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra) wherein the Division Bench decision of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) was relied upon.

Further, the decision of the Calcutta High Court in Gaya Textiles case (supra), relied upon by the learned counsel for the Respondent-Company, also stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) followed the said decision of the Calcutta High Court in Gaya Textiles case(supra).

Reference is further made to the decision of the learned Single Judge of the Punjab & Haryana High Court in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Limited, [1989] 65 Company Cases 546 (P. & H.) which was challenged before the Division Bench of the Punjab & Haryana High Court. Against the decision of the Division Bench of the Punjab & Haryana High Court, Appeal was filed before the Supreme Court which was decided by the Supreme Court by its aforementioned decision reported in 1993 Supp.(3) SCC 565.

It is pointed out that the learned Single Judge of the Punjab & Haryana High Court in his decision in Malhotra Steel Syndicate case (supra) expressed his doubt about the correctness of the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra).

4. The submissions made under heads (2) and (3) above are supported by the following decisions, wherein the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed :

(i)DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj.).

(ii)WELDING RODS PVT. LTD. Vs. INDO BORAX AND CHEMICALS LTD.,[2002] 108 Company Cases 747 (Guj.).

It is further submitted that the following decisions further support the submissions made under heads (2) and (3) above :

(1)MRS.ROMA DEB AND OTHERS Vs. R.C.SOOD & CO. PVT. LTD., [1990] 67 Company Cases 350 (Delhi).

(2)D & H SECHERON ELECTRODES (P) LTD. Vs. VOLTARE ELECTRODES (P) LTD., [1997] 89 Company Cases 592 (A.P.).

(3)SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.).

(4)EMA INDIA LIMITED Vs. TRACKPARTS OF INDIA LTD., [2001] 106 Company Cases 700 (All.).

(5)G.K.W. LTD. Vs. SHRIRAM BEARINGS LTD., [2002] 109 Company Cases 636 (Delhi).

(6)SAND PLAST (INDIA) LTD. Vs. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Raj.).

5. In view of the decisions referred to in head (4) above, it is evident that

(a) Defect in Affidavit is only an irregularity which may be cured at any stage.

(b) Opportunity to file proper Affidavit can be given subsequently.

(c) Such Affidavit filed subsequently relates back to the date of presentation of the Winding up Petition.

6. As regards the difficulties / complications mentioned by Sri Anil Sharma, learned counsel for the Respondent-Company on the basis of the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab & Haryana High Court in Mool Chand Wahi case (supra), it is submitted that the said decisions stood overruled in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

Further, the fresh Affidavit filed subsequently would relate back to the date of presentation of the Winding up Petition, and, therefore, the Winding up Petition would be deemed to have been validly presented on the date of its original presentation. As such, the difficulties / complications mentioned by Sri Anil Sharma would not arise.

In Rejoinder, Sri Anil Sharma, learned counsel for the Respondent-Company has reiterated the submissions made by him earlier.

Besides, Sri Sharma has made the following further submissions:

1- In the Supreme Court decision in Malhotra Steel Syndicate case (supra), there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

Therefore, the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

Reliance in this regard is placed on the following decisions :

(i)KRISHENA KUMAR Vs. UNION OF INDIA AND OTHERS, AIR 1990 Supreme Court 1782.

(ii)STATE OF U.P. & ANOTHER Vs. SYNTHETICS & CHEMICALS LTD. & ANOTHER, [1991] INSC 160; (1991) 4 SCC 139.

(iii)GOVERNMENT OF INDIA Vs. WORKMEN OF STATE TRADING CORPORATION & OTHERS, (1997) 11 SCC 641.

(iv)ISLAMIC ACADEMY OF EDUCATION & ANOTHER Vs. STATE OF KARNATAKA & OTHERS, 2003(6) Supreme Court Today 303 : A.I.R. 2003 SC 3724 : (2003) 6 SCC 697.

(v) STATE OF BIHAR Vs. KALIKA KUER @ KALIKA SINGH AND OTHERS, JT 2003 (4) SC 489 : AIR 2003 SC 2443.

2. A perusal of Form No.3 of the Companies (Court) Rules, 1959 shows that the Affidavit has to be in four parts :

A-Name and other details of the deponent.

B-Paragraph 1 of the Affidavit in regard to the designation and authorization of the deponent.

C-Paragraph 2 of the Affidavit containing verification of the paragraphs of the Company Petition.

D-Verification of the Affidavit.

In Malhotra Steel Syndicate case (supra), the defect was only in the verification clause of the Affidavit, i.e. Part ''D' above. The Supreme Court was of the opinion that the said defect was "slight defect or irregularity", and "the appellant should have been given an opportunity to rectify the same."

Therefore, it is only when there is "slight defect or irregularity" in the affidavit, that opportunity should be given to rectify the same.

It is submitted that in Malhotra Steel Syndicate case (supra), there was imperfect verification of the Affidavit (i.e. Part ''D' above), which was held to be "slight defect or irregularity".

On the other hand, in the present case, the defect is in the verification of the contents of the Company Petition as per the requirements of paragraph 2 of the Affidavit contained in Form No.3 (i.e. Part ''C' above).

There is no mention of the paragraphs of the Company Petition in paragraph 2 of the Affidavit, sworn on 6th September, 2002, filed in support of the present Company Petition. There is no mention as to which paragraphs of the Company Petition are true on personal knowledge and which paragraphs are based on information, received from the company records etc. Such defect in the Affidavit is a material defect.

Such defect in the Affidavit cannot be said to be a "slight defect or irregularity".

`Therefore, the Supreme Court decision in Malhotra Steel Syndicate case (supra) is not applicable to the present case.

In view of the submissions made by Sri Anil Sharma, learned counsel for the Respondent-Company, in rejoinder, in regard to the Supreme Court decision in Malhotra Steel Syndicate case (supra), Sri Deepak Sabarwal, learned counsel for the Petitioner-Company was given opportunity to make further submissions in regard to the said point raised by Sri Anil Sharma, learned counsel for the Respondent-Company.

Sri Sabarwal has made the following further submissions :

1- The judgment of the Supreme Court is binding on all Courts including the High Courts of the country in view of the provisions of Article 141 of the Constitution of India. It is not open to any High Court to say that since certain aspects were not considered in the Supreme Court judgment, so the judgment of the Supreme Court is not binding. If the Supreme Court proceeds to decide the case on one aspect, then it is not open to any High Court to say that the judgment of the Supreme Court is not binding, as other aspects were not considered by the Supreme Court. Even if certain aspects were not examined by the Supreme Court in its judgment, it cannot be said that the judgment of the Supreme Court is not binding.

It is submitted that in view of the above legal position, even if the submission of the learned counsel for the Respondent-Company that the Supreme Court in Malhotra Steel Syndicate case (supra) did not notice certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959, were to be accepted, still the said Supreme Court decision will not loose its binding force on this Court. It is not open to this Court to say that the said decision of the Supreme Court is not binding in view of the said submission made by the learned counsel for the Respondent-Company.

Reliance in this regard has been placed on the following decisions :

(i)UNION OF INDIA Vs. FIRM RAM GOPAL HUKUM CHAND & OTHERS, A.I.R. 1960 All. 672.

(ii)RAM MANOHAR LOHIA & OTHERS Vs. STATE OF UTTAR PRADESH AND OTHERS, A.I.R.1968 All. 100.

(iii)BALLABHADAS MATHURADAS LAKHANI & OTHERS Vs. MUNICIPAL COMMITTEE, MALKAPUR, A.I.R. 1970 Supreme Court 1002.

(iv)T. GOVINDARAJA MUDALIAR ETC. Vs. THE STATE OF TAMIL NADU & OTHERS, [1973] INSC 1; (1973) 1 SCC 336.

(v)AMBIKA PRASAD MISHRA Vs. STATE OF UTTAR PRADESH & OTHERS, A.I.R.1980 Supreme Court 1762.

(vi)ANIL KUMAR NEOTIA & OTHERS Vs. UNION OF INDIA & OTHERS, A.I.R. 1988 Supreme Court 1353.

(vii)SUGANTHI SURESH KUMAR Vs. JAGDEESHAN, (2002) 2 SCC 420.

2. The decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not per in-curium, as submitted by the learned counsel for the Respondent-Company.

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the Petition was not in proper Form and that the Petition could not be entertained.

Having noticed the facts of the case, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was some slight defect or irregularity in the Affidavit, "the appellant should have been given an opportunity to rectify the same".

It is submitted that the Supreme Court considered the facts of the case as emerging from the impugned judgment of the Division Bench of the Punjab and Haryana High Court, and concluded that the Affidavit filed in support of the Application for winding up could not be described as defective in any respect.

The Supreme Court has further laid down the law that even if there is defect in the Affidavit, filed in support of the Application for winding up, an opportunity should be given to rectify the same.

This is the ratio of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra). Even if certain relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 are not specifically mentioned in the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), it cannot be concluded that the said provisions were not considered by the Supreme Court while arriving at its decision as contained in the said judgment.

In any case, merely because the said provisions have not been specifically referred to in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), it will not take away the binding effect of the said decision nor can the decision be described as per in-curium.

It is submitted that mere non-mention of certain provisions in the decision of the Supreme Court will not take away its binding force, particularly when the said decision has been followed by certain High Courts.

3. The decisions relied upon by the learned counsel for the Respondent-Company in support of his plea of per in-curium, are distinguishable, and the same are not applicable to the facts and circumstances of the present case.

In reply to the above further submissions made by Sri Deepak Sabarwal, learned counsel for the Petitioner-Company, Sri Anil Sharma, learned counsel for the Respondent-Company reiterated his earlier submissions regarding the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per in-curium.

Sri Sharma has made the following further submissions :

(i)Reasoning of the learned Single Judge of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) and the reasoning of the Division Bench of the Punjab and Haryana High Court in Malhotra Steel Syndicate case (supra) have not been dealt with by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

(ii)Even if the Supreme Court judgment in Malhotra Steel Syndicate case (supra) has been followed by certain High Courts, the said fact will not debar the Respondent-Company from raising the plea that in view of the correct legal position, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per in-curium.

I have considered the submissions made by the learned counsel for the parties, and perused the record.

Two main questions which arise in the present case, are :

1-Whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective ?

2-If the said Affidavit filed in support of the Company Petition is held to be defective, should the petitioner be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company ?

Let us consider the afore-mentioned Question No.1, namely, as to whether the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, is defective.

In order to decide this question, it is necessary to refer to Rule 21 of the Companies (Court) Rules, 1959, as well as Form No.3 contained in Appendix I to the said Rules.

The said Rule 21 is as follows :

"R.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 the case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof, such affidavit shall be filed 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."

The said Form No. 3 is reproduced below :

Form No.3

[See rule 21]

[Heading as in Form No.1]

Company Petition No.............. of 19..

Affidavit verifying petition.

I, A.B., son of .....................aged ........residing at .......................

......................... do, solemnly affirm and say as follows :-

1. I am a director/secretary/............... of ............. Ltd., the petitioner in the above matter *(and am duly authorised by the said petitioner to make this affidavit on its behalf.)

[Note.--This paragraph is to be included in cases where the petitioner is the company.]

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.

*Note.- To be included when the affidavit is sworn to by any person other than a director, agent or secretary or other officer of the company.

__________________

It is true that the Companies (Court) Rules, 1959 are statutory in nature, and the Forms prescribed in Appendix I to the said Rules should be adopted having regard to the nature of proceedings. However, in my opinion, what is required is substantial compliance with the Forms prescribed in the said Appendix I to the said Rules. Literal compliance with the said Forms, in my view, cannot be insisted upon.

Whether there has been substantial compliance with the Forms prescribed under the said Rules will depend upon the facts and circumstances of each case and the nature of proceedings in question.

In this connection, it is pertinent to refer to Rule 17 of the Companies (Court) Rules, 1959, which is as follows :

"R.17. Forms.--The forms set forth in Appendix I, where applicable, shall be used with such variations as circumstances may require."

(Emphasis supplied)

Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that every Company Petition must be verified by an Affidavit made by the petitioner or by one of the petitioners, where there are more than one, and in the case, the Petition is presented by a body corporate, by a Director, Secretary or other Principal Officer thereof. Rule 21 further provides that such Affidavit shall be filed along with the Company Petition and shall be in Form No.3.

Proviso to Rule 21 lays down 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.

Therefore, in view of the said Rule 21, it is necessary that the Company Petition must be verified by an Affidavit, which is to be in Form No.3. The Affidavit is to be made by such person as is mentioned in the said Rule 21. The Affidavit is required to be filed along with the Company Petition.

Thus, the Affidavit verifying the Company Petition is required to be in Form No.3. However, as held above, what is required is substantial compliance with the said Form No.3, and not literal compliance. Whether there has been substantial compliance with Form No.3, will depend on the facts and circumstances of each case and the nature of proceedings in question.

The said conclusion is supported by the decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR Vs. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra).

It was laid down by the Bombay High Court as follows (at page 681 of the said Company Cases) :

"................................................... ........................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly, even when there is some breach or omission, whether it can be fatal to the petition."

It was further held as under (at page 682 of the said Company Cases):

".................................................. This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition."

Thus, in Suvran Rajaram Bandekar case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen whether it can be fatal to the Petition.

The said decision of the Bombay High Court in SUVARN RAJARAM BANDEKAR case (supra) was followed by the Gujarat High Court in DLF INDUSTRIES LTD. Vs. ESSAR STEEL LTD., [2001] 103 Company Cases 467 (Guj) (at pages 471- 472).

Keeping in view the above legal position, let us consider the present case.

As noted above, the present Company Petition is a Petition, inter-alia, praying for winding up the Respondent-Company. An Affidavit, sworn on 6th September, 2002 by Santosh John, has been filed in support of the Company Petition.

The question is as to whether the said Affidavit filed in support of the Company Petition substantially complied with the requirements of Form No.3 prescribed in Appendix I to the Companies (Court) Rules, 1959.

In order to consider this question, it is necessary to reproduce the relevant portion of the said Affidavit of Santosh John, which is as follows :

"IN THE MATTER OF :-

M/s Paharpur Cooling Towers Ltd. ... Petitioner

Versus

M/s Anuradha Masala, Udhyog Pvt. Ltd. ...... Respondent

AFFIDAVIT

I, Santosh John, S/o Sh. C.V. Yohannan, Age about 29 years, working as an Officer with the plaintiff Company, do hereby solemnly affirm and declare as under:

1.That I am working as an Officer in the aforesaid company and as such am well conversant with the facts of the present case and able to depose about the same.

2.That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433 (e) read with Section 434 (1) (a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief.

Sd.

DEPONENT

VERIFICATION

Verified at New Delhi on this 6 day of Sept, 2002 that the contents of para 1 and 2 of the above affidavit are true and correct to my knowledge. No part of it is incorrect and nothing material has been concealed therefrom."

As is evident from the submissions made by the learned counsel for the parties, it is not disputed by the Respondent-Company that Santosh John, who has sworn the said Affidavit in support of the Company Petition, is an authorized person.

The dispute is in regard to paragraph 2 of the said Affidavit wherein the contents of the Company Petition have been verified.

Paragraph 2 of the Affidavit given in Form No.3, contained in Appendix I to the Companies (Court) Rules, 1959, inter-alia, requires that it should be stated that "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."

Therefore, in view of paragraph 2 of the Affidavit given in Form No.3, the verification of the Company Petition must be done by specifying paragraphs of the Company Petition. There should be specification as to which paragraphs of the Company Petition are true to the knowledge of the deponent and as to which paragraphs of the Company Petition are based on information.

In the present case, paragraph 2 of the Affidavit, sworn on 6th September, 2002 by Santosh John, filed in support of the Company Petition, reads as follows :

"That I have understood the contents of the accompanying application on behalf of the petitioner under Section 433(e) read with Section 434 (1)(a) & Section 439 of the Companies Act, 1956 and state that the same are true and correct to my knowledge and belief."

Therefore, in paragraph 2 of the said Affidavit, sworn by Santosh John, there is no mention of paragraph numbers of the Company Petition. There is no specification of paragraph numbers, which are true to the knowledge of the said Santosh John, nor is there any specification of paragraph numbers, which are based on information.

There is merely general verification of the contents of the Company Petition without any mention of even paragraph numbers of the Company Petition. Further, the contents of the Company Petition have been stated to be "true and correct to my knowledge and belief". There is no separate specification of the paragraph numbers which are true to the knowledge of the said Santosh John and the paragraph numbers, which are based on information.

In my opinion, such verification of the contents of the Company Petition cannot be said to be substantial compliance of the requirements of the Affidavit as prescribed in Form No.3 contained in Appendix I to the Companies (Court) Rules, 1959.

The said Affidavit of Santosh John filed in support of the Company Petition, therefore, does not substantially comply with the requirements of Form No.3 given in Appendix I to the Companies (Court) Rules, 1959. The said Affidavit of Santosh John is evidently a defective Affidavit.

The said conclusion is supported by various judicial decisions.

In PADMABATI DASI Vs. RASIK LAL DHAR, (1910) I.L.R. 37 Cal. 259, a Division Bench of the Calcutta High Court consisting of Jenkins, C.J. and Woodroffe J. held as under (at page 261 of the said I.L.R.) :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order XIX, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it would be safe to act on the deponent's belief."

(Emphasis supplied)

The above observations of the Calcutta High Court were endorsed by their Lordships of the Supreme Court in State of Bombay Vs. Purushottam Jog Naik[1952] INSC 35; , A.I.R. 1952 SC 317.

Their Lordships of the Supreme Court observed as follows (paragraph 16 of the said A.I.R.) :

"(16) We wish, however, to observe that the verification of the affidavits produced here is defective. The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally. The verification however states that everything was true to the best of his information and belief. We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit. Verification should invariably be modelled on the lines of Order 19, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not. And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed. We draw attention to the remarks of Jenkins C.J. and Woodroffe J. in PADMABATI DASI v. RASIK LAL DHAR, 37 Cal 259 and endorse the learned Judges' observations."

(Emphasis supplied)

In Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406, it was held as under (paragraphs 16 and 17 of the said A.I.R.) :

"(16) Order19, Rule 3 (1) of the Code of Civil Procedure requires :

"Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated"

In no affidavit has the petitioner said which part was based on information and which on belief. Nowhere he has divulged the source of his information or the grounds of his belief. Where the matter deposed to is not based on personal knowledge but on information, the sources of information ought to be clearly disclosed. The petitioner's several affidavits infringe the provisions of Order 19, Rule 3, when they should have been strictly observed. Such affidavits being violative of the requirements of the mandatory provisions of law, deserve to be ignored. The words that the contents of the affidavit "are true and correct to the best of my knowledge and belief" carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless."

"(17) In Padmabati Dasi v. Rasik Lal Dhar (1910) ILR 37 Cal. 259, Jenkins C.J. and Woodroffe J. observed :

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, Rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to Judge whether it would be safe to act on the deponent's belief."

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is a catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Naein Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy, AIR 1956 Cal 496 and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101"

(Emphasis supplied)

In view of the above legal position, it is evident that the said Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition is a defective Affidavit.

As the said Affidavit filed in support of the Company Petition has been held to be defective, let us now consider Question No.2, namely, as to whether the petitioner should be given opportunity to rectify the said defect by accepting the Affidavit, sworn by Santosh John on 13th April, 2004, filed in Form No.3 as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Before proceeding to consider this question, it is necessary to consider the submission made by the learned counsel for the Respondent-Company that the Petitioner-Company has taken contradictory stand. It is submitted that on the one hand, the Petitioner-Company maintains that the Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition substantially complied with all the requirements of Form No.3 in accordance with Rule 21 of the Companies (Court) Rules, 1959, and on the other hand, the Petitioner-Company has sought permission / opportunity to file a fresh Affidavit in Form No.3, being the Affidavit, sworn by Santosh John on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

Having considered the said submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

It is open to the Petitioner-Company to take alternative pleas.

The First Plea of the Petitioner-Company is that the Affidavit, sworn by Santosh John on 6th September, 2002, filed in support of the Company Petition, was not defective, as there was substantial compliance with the requirements of Form No.3.

The Second Plea of the Petitioner-Company, in the alternative, is that if the said Affidavit, sworn on 6th September, 2002, filed in support of the Company Petition, is held to be defective, then the Petitioner-Company be permitted to bring on record the said fresh Affidavit, sworn on 13th April, 2004, filed as Annexure ''A' to the Company Application (Paper No. A-10) and its supporting Affidavit, filed on behalf of the Petitioner-Company.

In my opinion, it is open to the Petitioner-Company to take alternative pleas, as mentioned above. There is no question of any contradictory stand being taken by the Petitioner-Company, as submitted by the learned counsel for the Respondent-Company.

Coming now to the aforementioned Question No.2, it is necessary to examine the legal position as emerging from various decisions cited by the learned counsel for the parties.

In Gaya Textiles case, AIR 1968 Cal 388 (supra), the Winding up Petition was not verified by an Affidavit but by a declaration made before a Notary Public at Bombay on December 24, 1965.

The Calcutta High Court held that the verification was defective. It was further held that leave to re-verification of the Winding up Petition could not be granted as the same would lead to various complications, as mentioned in the decision.

The relevant portion of the said decision of the Calcutta High Court is reproduced below (paragraphs 6, 11 and 12 of the said AIR) :

"(6) Learned counsel for the petitioner however, contended that the defect in the verification of the petition was a mere irregularity which should be overlooked, and leave should be granted to the petitioner to re-verify the petition according to the rules. In support of this contention, learned counsel for the petitioner firstly relied upon a decision of the Allahabad High Court reported in AIR 1925 All 79 in which it was held that a plaint was not void merely because it did not contain the verification clause as required by the Code and that the omission to verify was a mere irregularity which could be cured even at a later stage and such a plaint therefore, should be deemed to be presented on the date of actual presentation and not on the date of its verification. It was also held that merely on the ground of such defect the plaint could not be treated as altogether invalid. This case, to my mind, has no application as I am not concerned with a defective verification of a plant, but with the verification of a winding up petition to which entirely different considerations apply. Besides, it cannot be overlooked that allegations in the plaint can be acted upon only upon proof of the same by evidence or upon admission by the defendant. The allegations in a petition, on the other hand, are to be treated by the Court as evidence without any further proof.

(11) Had this not been a petition for winding up a Company, I would have already accepted the contentions of the learned counsel for the petitioner. But it cannot be overlooked that the present petition is a petition for winding up of a Company and a winding up order relates back to the date of the presentation of the winding up petition. If on the date when the petition was presented there was no proper verification according to law, then there was no petition at all on which the Court could issue directions for advertisement. Secondly, if leave is granted to cure the verification today, then a proper petition for winding up of the Company would come into existence as from today, and in that event the question of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when the Court grants the Company leave to re-verify the petition would also create a good deal of confusion. Since a winding up order relates back to the date of presentation of the winding up petition, all dealings by the Company with its assets would be subject to the rules relating to fraudulent preference and transactions are liable to be set-aside on the ground that the Company had unlawfully dealt with its assets in order to deprive its creditors. But if leave is granted to the petitioner to cure the defect in the verification by allowing re-verification of the petition according to the rules today, it would be open to the Company to contend, if a winding up order is made, that the rules relating to fraudulent preference or unlawful dealing with the assets from the date of presentation of the winding up petition would not apply, as a petition properly verified according to law came into existence only on the date on which leave was granted to the petitioner to re-verify the petition.

(12). There is, however, another matter to be considered in connection with the defective verification of a winding up petition. In the event of dealings by the Company with its assets between the date of presentation of the winding up petition and the date when a valid petition comes into existence after re-verification of the same, third parties may acquire rights in the Company's assets, which, it will be difficult to assail or set aside. For these reasons, verification of a winding up petition must strictly comply with the rules for verification of the same. The petition with which I am concerned in this application being a petition for winding up of a Company the principles discussed in the several decisions cited by the learned counsel for the petitioner are not attracted and do not assist the petitioner. Counsel for the petitioner admitted, and I think rightly, that the verification was defective and the Court could not make an order for winding up on this petition, and it was for that reason that he asked for leave to re-verify the petition. That being the position, in my opinion, re-verification of a winding up petition cannot be allowed, particularly because in this case the verification appears to have been done before a notary public, who under the rules is not an officer before whom a petition could be verified under the rules of this Court as also under the Companies (Court) Rules, 1959. For the reasons mentioned above, the Court cannot proceed to make an order on the present petition nor can the Court give leave to the petitioner to re-verify the petition in conformity with the rules. In the circumstances, this application is dismissed with costs. Certified for counsel."

(Emphasis supplied)

In Mool Chand Wahi case, [1986] 60 Company Cases 198 (P & H) (supra), the Winding up Petition was accompanied by an Affidavit. In the verification clause of the Affidavit, paragraphs 1 to 14 of the Affidavit were shown to have been "true and correct to the best of the deponent's knowledge and belief". There was no delineation as to which paragraphs of the Affidavit were correct to the best of his knowledge and which paragraphs of the Affidavit were correct to the best of his belief.

The learned Single Judge of the Punjab and Haryana High Court referred to the provisions of Rules 11 (a), 18 and 21 of the Companies (Court) Rules, 1959 and the provisions of Order 19, Rule 3 of the Code of Civil Procedure as also the decision of the Punjab & Haryana High Court in Bhupinder Singh Vs. State of Haryana and others, A.I.R. 1968 Punjab & Haryana 406 (supra).

It was concluded that the verification of the Affidavit, filed in support of the Company Petition, was not proper, and as such, the Winding up Petition was liable to be dismissed on the ground that it was not accompanied by a proper Affidavit.

The learned Single Judge of the Punjab and Haryana High Court pointed out that in case a properly sworn Affidavit was allowed to be filed subsequently, the same would lead to a great deal of confusion regarding the rights of the third parties. Reliance was placed on the decision of the Calcutta High Court in Gaya Textiles case (supra).

The relevant portions of the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) are reproduced below (at pages 201, 202 and 203 of the said Company Cases) :

"I have duly considered the argument of the learned counsel. Rule 11 (a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned at Serial No. 15 in the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Paragraph 2 of the Form reads as follows :

"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."

Rule 18 says that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code or by the rules and practice of the court. Order 19, rule 3 of the Code of Civil Procedure says that affidavits shall be confined to such facts as the deponent is able to prove from his own knowledge except on interlocutory applications, on which statements of his belief may be admitted. From the aforesaid rules, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form. It is well settled that if an affidavit is not in due form, no value can be attached to it. In the above view, I am fortified by the observations in Bhupinder Singh's case, AIR 1968 P & H 406, wherein Tek Chand J., after noticing Order 19, rule 3(1) of the Code, observed as follows (p.410) :

"The words that the contents of the affidavit '' are true and correct to the best of my knowledge and belief' carry no sanctity, and such a verification cannot be accepted. It has been held over and over again that affidavits must be either affirmed as true to knowledge, or from information received provided the source of information is disclosed, or as to what the deponent believes to be true provided that the grounds for such belief were stated. Such affidavits where the verification lacks the essential requirements, are valueless".

In Padmabati Dasi v. Rasik Lal Dhar [1910] ILR 37 Cal 259, Jenkins C.J. and Woodroffee J. observed :

''We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order 19, rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.'

This enunciation of the principle was endorsed by the Supreme Court in State of Bombay v. Purushottam Jog Naik, [1952] INSC 35; AIR 1952 SC 317. There is catena of decided cases supporting this proposition and among others, reference may be made to Durga Das v. Nalin Chandra Nandan, AIR 1934 Cal 694, Bisakha Rani Ghose v. Satish Chandra Roy Singha, AIR 1956 Cal 496, and Dipendra Nath Sarkar v. State of Bihar, AIR 1962 Pat 101."

The learned Judge, in view of the fact that the verification of the affidavit was not proper, ignored the affidavit filed by the petitioner in that case. In a petition for winding-up, it is mandatory to file an affidavit along with the petition. The purpose of the affidavit is that the allegations in the affidavit read with the petition are treated as substantive evidence. In case the petition is not accompanied by an affidavit, in view of the rules mentioned above, it is no petition in the eye of law and consequently it is liable to be dismissed on this ground alone. The main reason is that the petition for winding-up, if accepted, relates back to the date of its presentation. In case a properly sworn affidavit is allowed to be filed subsequently, the question will arise as to whether the winding-up petition would relate back to the date of presentation of the petition or the affidavit and in many cases a great deal of confusion regarding the rights of the third parties would crop up. In that regard, the following observations in Gaya Textiles P. Ltd., In re, AIR 1968 Cal 388, be read with advantage (pp.390, 391):

..............................................................."

(Emphasis supplied)

Having laid down the above proposition, the learned Single Judge of the Punjab & Haryana High Court dismissed the Winding up Petition on the ground that it was not accompanied by a proper Affidavit.

Against the said decision of the learned Single Judge of the Punjab & Haryana High Court, Company Appeal under Section 483 of the Companies Act, 1956 was filed before the said High Court.

A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal by its decision reported in Mool Chand Wahi Vs. National Paints (Pvt.) Ltd. and another, [1986] 60 Company Cases 402 (P & H) (supra) .

The Division Bench of the Punjab & Haryana High Court rejected the submission made on behalf of the Petitioner-Appellant that he should have been allowed to file a fresh Affidavit in support of the Company Petition, and upheld the said decision of the learned Single Judge of the Punjab & Haryana High Court. The Division Bench of the Punjab & Haryana High Court held as under (at Pages 403- 404 of the said Company Cases) :

"........................................................ The Company Petition was accompanied by an affidavit dated February 20, 1980, which was not in proper form. In its verification clause, paras 1 to 14 of the affidavit were mentioned to have been true and correct to the best of the deponent's knowledge and belief. The appellant in accordance with law was required to specify which paragraphs of the affidavit were correct to the best of his knowledge and which were correct to his belief. Rule 11(a) of the Companies (Court) Rules, 1959 (hereinafter called "the Rules"), defines "petitions". A petition under section 439 of the Act for winding up of a company is mentioned in sub-rule (15) of the said rule. Rule 21 prescribes that every petition shall be verified by an affidavit made by the petitioner and such affidavit shall be filed along with the petition and shall be in form No.3, which, in turn, prescribes that the petitioner shall mention the paragraphs of the petition which are true to his knowledge and the paragraphs which are based on information and he believes them to be true. Rule 18 lays down that every affidavit shall be signed by the deponent and sworn to in the manner prescribed by the Code of Civil Procedure (hereinafter called "the Code") or by the rules and practice of the court. Order XIX, rule 3 of the Code lays down the matters to which the affidavit shall be confined. Mr. Ratta also admits that where a petition for winding up is not supported by an affidavit, the same is liable to be dismissed.

He, however, submits that the verification of an affidavit is a matter of form and he should have been allowed to file a fresh affidavit and the petition should not have been dismissed for want of proper verification of the affidavit. He placed reliance on Manohar Narayan Joshi v. Ramu Mhatang Patel, AIR 1973 Bom.105.

We do not find any force in this contention. Going through the judgment of the learned Single Judge, we find that the law on the point has been elaborately discussed and as a result an imperative conclusion has been reached that the petition has had to be dismissed as it was not accompanied by a proper affidavit. An affidavit which is not in due form is of no value. An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. The learned Single Judge rightly rejected the appellant's prayer to file a fresh affidavit properly sworn in for the reason that if the amendment of a petition for winding up is allowed, it relates back to the date of its presentation. It would lead to a great deal of confusion if the appellant is allowed to swear in and supply a fresh affidavit at a late stage because rights of third parties would crop up.

Manohar Narayan Joshi's case, AIR 1973 Bom 105, was rightly distinguished by the learned Single Judge as it adjudicated on the question whether or not a petitioner in an election petition under the Representation of the People Act should be allowed to amend the affidavit accompanying it. An affidavit in support of an election petition is not intended to be treated as evidence of the facts stated therein because it is ultimately to be decided on the evidence recorded by the High Court."

(Emphasis supplied)

In Malhotra Steel Syndicate case, [1989] 65 Company Cases 546 (P. & H.) (supra), a learned Single Judge of the Punjab and Haryana High Court was dealing with the submission made by the learned counsel for the Respondent-Company that the Affidavit filed in support of the Winding up Petition was not in conformity with Rule 21 of the Companies (Court) Rules, 1959 and Form No.3 contained in Appendix I to the said Rules.

The learned counsel for the Respondent-Company placed reliance on the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra).

The learned Single Judge in Malhotra Steel Syndicate case (supra), expressed doubts about the correctness of the observations made by the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), but declined to refer the matter to a Larger Bench as the learned Single Judge was not satisfied on the merits of the Winding up Petition.

On merits of the case in Malhotra Steel Syndicate case (supra), the learned Single Judge was of the view that in view of the material placed before the Court, it was prima-facie established that the debt was bona fide disputed by the Respondent-Company. Therefore, the learned Single Judge dismissed the Winding up Petition and relegated the Petitioner-Company to a civil Suit.

The relevant portions of the decision of the learned Single Judge in Malhotra Steel Syndicate case (supra) are reproduced below (at pages 550 - 552 of the said Company Cases) :

"Mr. Bhagirath Dass, who appeared for the respondent, submitted that the affidavit filed in support of the petition is not in conformity with rule 21 of the Companies (Court) Rules, 1959. Rule 21 enjoins that every petition shall be verified by an affidavit and such affidavit shall be filed along with the petition and shall be in Form No.3. Form No.3 provides that the statement made in various paragraphs of the petition has either to be verified as true to knowledge or on information received or on information which is believed to be true. Since the affidavit filed in support of the petition is not in conformity with Rule 21 of the Companies (Court) Rules, the petition is liable to be rejected on this score alone. Learned counsel relied upon a Division Bench decision of this court in Mool Cihand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 198. Before the Bench, learned counsel for the Petitioner Company conceded that where a petition for winding up is not accompanied by an affidavit, the same is liable to be dismissed. On the basis of that concession, the Bench held that an affidavit, which is not in due form, is of no value and the company petition, which is to be accompanied by the affidavit, will be no petition in the eyes of law.

Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not "evidence" within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my lord the Chief Justice for referring the case to a larger Bench for reconsideration of the judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (Private) Ltd. [1986] 60 Comp Cas. 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case.

In Amalgamated Commercial Traders (P.) Ltd. v. Krishnaswami (A.C.K.) [1965] 35 Comp Cas 456, 463, 464 (SC), the Supreme Court quoted with approval the following passage from Buckley on the Companies Acts, 13th edition, page 451) : "It is well settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under certain circumstances may be stigmatized as a scandalous abuse of the process of the court. At one time, petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. The modern practice has been to dismiss such petitions. But, of course, if the debt is not disputed on some substantial ground, the court may decide it on the petition and make the order................If the debt was bona fide disputed, as we hold it was, there cannot be ''neglect to pay' within section 434(1)(a) of the Companies Act. If there is no neglect, the deeming provision does not come into play and the ground of winding-up, namely, that the company is unable to pay its debts is not substantiated".

This passage has been quoted with approval in the subsequent decisions of the apex court. The law has been succinctly stated in this paragraph and if the company court comes to the conclusion that the debt is bona fide disputed by the company, against whom the winding up petition has been filed, the petitioner has to be relegated to a civil suit and a winding up petition will not be the appropriate remedy.

The respondent-company has placed material before this court and it prima facie establishes that the debt is bona fide disputed.

The duplicate copy of the bill, which is placed on record by the respondent company evidencing receipt of the goods in dispute, does not bear the signatures of Mr. K.S. Rupal who purports to have signed the original bill dated August 7, 1984. The original bill placed on record by the petitioner bears the signature of Mr. K.S. Rupal. The photocopy of the cheque issued to cover price of the goods, which was dishonoured, is signed only by Shri S.S. Sandu, executive director of the company. The respondent company has denied that Shri S.S. Sandhu was authorised to issue the cheque for and on behalf of the company.

The petitioner filed a rejoinder to the written statement and in Para No.4 thereof took the plea that hundreds of cheques issued prior to and subsequent to the date of the issuance of the cheque to the petitioner on August 7, 1984, were signed by Sri S.S. Sandhu and were honoured by the bankers. The verification of the rejoinder reveals that the facts mentioned in Para No.4 of the replication are true and correct to the best of knowledge of the deponent derived from the record and information received and believed to be correct. It is not stated as to from which source the petitioner-company acquired the knowledge that Shri S.S. Sandhu was competent to issue the cheque for and on behalf of the company. It was imperative for the petitioner to specifically disclose the source of information which was believed by him to be correct. Even if the plea was correct, the petitioner could obtain a certificate from the banker who had honoured the cheques issued for and on behalf of the respondent company by Shri S.S. Sandhu. No such document has been placed on record. The receipt of goods is denied by the respondent and no material has been placed before this court to vouchsafe the assertions of the petitioner that the goods had been supplied.

The petitioner has to prove the allegations made by it in the petition by leading positive evidence and this could be done only in a civil suit. The respondent company has prima facie established that the debt is bona fide disputed by it".

(Emphasis supplied)

It further appears that against the said decision of the learned Single Judge in Malhotra Steel Syndicate case (supra), a Company Appeal was filed. A Division Bench of the Punjab & Haryana High Court dismissed the said Company Appeal on the short ground that the Affidavit filed in support of the Winding up Petition was not in proper form and that the Winding up Petition could not be entertained.

Against the said decision of the Punjab and Haryana High Court, Special Leave Petition, being S.L.P. (Civil) No. 19170 of 1991, was filed before the Supreme Court, and the said Special Leave Petition gave rise to Civil Appeal No. 2587 of 1992.

The said Civil Appeal was decided by the Supreme Court by its decision reported in Malhotra Steel Syndicate V. Punjab Chemi Plants Ltd., 1993 Supp. (3) SCC 565 (supra).

The relevant portion of the said decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is quoted below:

"1. Leave granted.

2.We have heard both the counsel. We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding-up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

3. We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991.

4. In the result, the Company appeal will stand revived before the Division Bench for disposal on merits.

5. The appeal is allowed accordingly. There will be no order as to costs."

(Emphasis supplied)

It may be mentioned that pursuant to the remand by the Supreme Court by its aforementioned decision in Malhotra Steel Syndicate case (supra), a Division Bench of the Punjab & Haryana High Court considered the Company Appeal on merits, and dismissed the same by its decision reported in Malhotra Steel Syndicate Vs. Punjab Chemi-Plants Ltd., [1996] 85 Company Cases 586 (Punjab & Haryana).

A perusal of the decision of the Supreme Court in Malhotra Steel Syndicate Bank case (supra) shows that the following principles, amongst others, may be deduced from the said decision :

(1)While considering the validity of the Form and Verification of the Affidavit filed in support of the Company Petition, a proper and liberal construction should be adopted. In other words, what is required is that the Affidavit has substantially complied with the Form and Verification as provided in the Companies (Court) Rules, 1959.

(2)Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity.

(3)In case there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same.

Hence, in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra), if an Affidavit filed in support of the Winding up Petition suffers from any defect or irregularity, opportunity should be given to rectify the same. Therefore, in such a situation, the Petitioner-Company may be permitted to file a fresh Affidavit in support of the Winding up Petition.

The above legal principles deduced from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), are the law declared by the Supreme Court, and are binding on all the Courts in the country in view of Article 141 of the Constitution of India.

Therefore, with deep respect for the learned Judges, I am of the opinion that the decision of the Calcutta High Court in Gaya Textiles case (supra) and the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) as well as the decision of the Division Bench of the Punjab & Haryana High Court in Mool Chand Wahi case (supra) in-so-far as, the said decisions have laid down that in case verification of the Winding up Petition by Affidavit filed in support of the Winding up Petition, is defective, the Winding up Petition is liable to be dismissed, and no opportunity to re-verify the Winding up Petition by filing fresh Affidavit can be given, are no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

For the same reason, the decision of the learned Single Judge of the Punjab and Haryana High Court in Registrar of Companies case (supra), wherein the Division Bench decision of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), was relied upon, is also no longer good law in view of the Supreme Court decision in Malhotra Steel Syndicate case (supra).

As regards the complications pointed out by the Calcutta High Court in its decision in Gaya Textiles case (supra) and by the learned Single Judge of the Punjab and Haryana High Court in his decision in Mool Chand Wahi case (supra), I am of the opinion that in case, the Affidavit, filed in support of the Winding up Petition, is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

In view of this, various complications pointed out in the said decision of the Calcutta High Court and the said decision of the learned Single Judge of the Punjab and Haryana High Court, would not arise.

As regards the submission made by the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) should be confined only to "slight defect or irregularity", I find myself unable to accept the said submission. The expression "slight defect or irregularity" occuring in the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is in the context of the facts of the said case. However, the ratio of the said decision is that if the Affidavit filed in support of the Winding up Petition is defective, the same is merely an irregularity, and can be cured by giving opportunity to the Petitioner to rectify the same.

Keeping in view the above legal position, let us consider the facts of the present case. As noted above, an Affidavit, sworn by Santosh John on 6th September, 2002, was filed in support of the Company Petition. The said Affidavit, as held in Question No.1 above, is defective.

Another affidavit, sworn by Santosh John on 13th April, 2004, was filed in Form No.3 as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit. It is, inter-alia, prayed in the said Company Application (Paper No. A-10) that this Court may grant leave to the Petitioner-Company to file the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit.

As the Affidavit, sworn on 6th September, 2002, originally filed in support of the Company Petition, has been held to be defective, I am of the opinion that the prayer made in the said Company Application (Paper No. A-10) on behalf of the Petitioner-Company be granted, and the Petitioner-Company be permitted to bring on record the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure "A" to the said Company Application (Paper No. A-10) and its supporting Affidavit, and the said Affidavit, sworn on 13th April, 2004, be read as being the Affidavit in support of the Company Petition.

It is relevant to note that the said Supreme Court decision in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Private Limited case (supra), by the Andhra Pradesh High Court in D & H Secheron Electrodes case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In DLF Industries Ltd. case (supra), the Winding up Petition was supported by an Affidavit affirmed in Delhi before a Notary on July 7, 1997.

An objection was raised by the Respondent-Company that the Affidavit filed in support of the Winding up Petition was defective. It was submitted that the person affirming the Affidavit did not state that he was a Principal Officer of the Company. The Affidavit did not refer to ''this' particular Petition as being affirmed and also that it was not in Form No.3 as required by Rules 18 and 21 of the Companies (Court) Rules, 1959.

In view of the said objection raised by the Respondent-Company, the petitioner filed another Affidavit affirming this very Petition, which was affirmed on October 23, 1997 before a Notary in Faridabad. This Affidavit stated that the deponent was the Managing Director of the Petitioner-Company. He was shown the Petition and he affirmed that paragraphs 1 to 10 were true to his knowledge and the statements made in paragraphs 11 and 12 were based on his information which he believed to be true.

The Gujarat High Court held that the First Affidavit itself could not be said to be in any way materially defective requiring the rejection of the Winding up Petition. That apart, assuming that there was any defect in the First Affidavit, the same was cured in the Second Affidavit. Such a course of action was permissible.

The Gujarat High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), and concluded that the Winding up Petition could not be rejected on the ground of the Affidavit filed in support of the Winding up Petition being defective.

Relevant portion of the said decision of the Gujarat High Court in DLF Industries case (supra) is quoted below (at pages 471, 472 and 473 of the said Company Cases) :

"Mr. Nanavati, learned counsel for the respondent, submits that this affidavit is affirmed in Delhi before a notary on July 7, 1997. The petition is not mentioned to be the one annexed at Annexure A thereto. Paragraph No. 2 of the affidavit states that the petitioner has filed the petition "this day" whereas the petition has come to be filed on July 8, 1997. Mr. Nanavati, therefore, submits that it is difficult to say that this affidavit is affirmed with respect to this very petition. Mr. Nanavati has principally relied upon the judgment of the Punjab High Court, first of all of a single Judge in the case of Mool Chand Wahi v. National Paints P. Ltd.[1986] 60 Comp Cas 198 (P & H) which is confirmed by the Division Bench of that court in Mool Chand Wahi. v. National Paints P. Ltd. [1986] 60 Comp. Cas 402. In that judgment the single Judge as well as the Division Bench have held that from Rules 11, 18 and 21 of the Companies (Court) Rules, 1959, it is evident that the petition for winding up is required to be accompanied by an affidavit in due form and if it is not so, no value can be attached to it. The judgment holds that the affidavit is to be filed so that the contents of the petition are treated as evidence and in the absence of the affidavit being in the exact form, that cannot be permitted. The judgment also holds that a subsequent correction of the affidavit is not permissible.

As against that, Mr. Seth, learned counsel for the petitioner, relied upon the judgment of a single Judge of the Bombay High Court (G.D. Kamat, J. as he then was) in Bandekar (S.R.) v. Rajaram Bandekar [1997] 88 Comp Cas 673 (Bom) where the learned Judge held that the importance of verification is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered." (page 682).

In view of the objection raised by the respondent, the petitioner filed another affidavit affirming this very petition, which is affirmed by one Shri Ranjit Singh Cheema on October 23, 1997, before a notary in Faridabad. This affidavit states that the deponent is the managing director of the petitioner-company. He is shown the petition and he has affirmed that paragraphs Nos. 1 to 10 are true to his knowledge and the statements made in paragraphs 11 and 12 are based on his information which he believed to be true.

Now, if we look to the first affidavit, referred to above, the deponent has disclosed his high position in the company. He has also made a statement on oath with respect to the contents of the petition and its annexures as required by law. In my view, the first affidavit itself cannot be said to be in any way materially defective requiring the rejection of the petition.

The observations of Kamat J. quoted above aptly apply in the present case. That apart, assuming that there is any defect in the first affidavit, the same is cured in the second affidavit. Such a course of action is permitted by a Division Bench of the Bombay High Court in the case of Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 (Bom), which is binding precedent for this court. Now, on this aspect, the Hon'ble Supreme Court has indicated as to what approach should be adopted in such a controversy in the case of Malhotra Steel Syndicate v. Punjab Chemi-plants Ltd. [1993] 3 SCC (Supp) 565. It is a short order but it indicates what approach the court should have. It reads as follows :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit the appellant should have been given an opportunity to rectify the same." (Underlining supplied).

In this view of the matter, as far as the first submission of Mr. Nanavati is concerned, it is difficult to accept the same and the petition cannot be rejected solely on this ground. I have examined this submission in spite of the fact that this plea has not specifically been taken in the reply. In fact, it is the petitioner who has contended that Shri K.M. Patel who has affirmed the reply for the respondent is not the principal officer and therefore his reply may not be looked into. As far as this aspect is concerned, another affidavit has subsequently been filed by the respondent placing on record that Shri K.M. Patel is a senior officer of the respondent-company authorised to swear the affidavit in reply. Hence I am not prepared to accept this objection to the affidavit of Shri Patel also."

(Emphasis supplied)

In Welding Rods Private Ltd. case (supra), the original verification read as under :

"Affidavit I, S.L. Jain, authorised signatory of the petitioner-company, do hereby solemnly affirm and State on oath that what is stated in the foregoing petition is true to my knowledge, information and belief and I believe the same to be true.

Solemnly affirmed at Mumbai on this 10th day of July, 2000.

For Indo Borax and Chemicals Ltd.

(Sd. ) Deponent."

A preliminary objection was raised that the affidavit filed in support of the Winding up Petition was not an Affidavit in the eyes of law or in accordance with Rule 21 of the Companies (Court) Rules, 1959.

The learned Single Judge of the Gujarat High Court came to the conclusion that the irregularity in the verification of the Affidavit and want of signature below the Petition and above the verification were irregularities which were required to be permitted to be cured. The learned Single Judge accordingly afforded an opportunity to the Petitioner-Company to sign the Petition and remove all technical objections within a period of 15 days from the date of the order. The Petitioner-Company availed of the said opportunity by filing the Affidavit as per Form No. 3.

Against the decision of the learned Single Judge rejecting the above preliminary objection as well as other preliminary objections raised on behalf of the respondent, a Company Appeal was filed.

A Division Bench of the Gujarat High Court dismissed the said Company Appeal.

As regards the preliminary objection regarding the defect in the verification of the Affidavit, the Division Bench of the Gujarat High Court held that there was no infirmity in the order of the learned Single Judge permitting the Petitioner-Company to rectify the defect in the verification of the Affidavit filed with the Company Petition.

It was further held by the Division Bench that the effect of permitting such rectification was, inter-alia, to relate it back to the original date of filing of the Winding up Petition.

It was further held by the Division Bench that in view of the pronouncement of the Supreme Court in Malhotra Steel Syndicate case (supra), the decisions of the learned Single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi case (supra) must be treated as having been impliedly overruled.

The Division Bench, however, emphasised that the Court would not permit the rectification of the defect in a Winding up Petition just as a matter of course, but would take into account all the relevant circumstances including the conduct of the parties.

Relevant portion of the said decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra) is quoted below (at pages 767, 768 and 769 of the said Company cases) :

"We find considerable substance in the contention of Mr. Vakil for the petitioning-creditor. The preponderance of judicial authority is that the defect in the form of verification or affidavit is only a technical irregularity and that an opportunity should be given to the concerned party to cure such defect. The inherent powers of the court saved by Rule 9 of the Companies (Court) Rules, can certainly be invoked in such cases. Rule 9 reads as under :

"9. Inherent powers of court.-Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court."

In Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1989] 65 Comp Cas 546 (P & H), Justice Majithia referred to the Division Bench judgment of the Punjab and Haryana High Court in Mool Chand Wahi v. National Paints P. Ltd. [1986] 60 Comp Cas 402 and made the following observations (page 550 of 65 Comp Cas):

"Sitting singly, I am bound by this judgment, although, I have got serious doubts about the correctness of the observations made in the judgment that the petition is liable to be rejected on the sole ground that the affidavit accompanying the petition is not verified according to law. It was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with Rule 21 of the Companies (Court) Rules, and an irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. Affidavits are not ''evidence' within the meaning of section 3 of the Evidence Act and can be used as evidence only if, for sufficient reasons, the court passes an order under Order 19, Rule 1 or 2 of the Code of Civil Procedure. Reference can be made to Smt. Sudha Devi v. M.P. Narayanan [1988] 3 SCC 366. I had thought of making a request to my Lord the Chief Justice for referring the case to a larger Bench for reconsideration of the Judgment rendered by the Division Bench in Mool Chand Wahi v. National Paints (P) Ltd. [1986] 60 Comp Cas 402 (P & H). However, in view of my decision on the merits of the controversy, I do not think it proper to make such a request. This matter will be gone into in another appropriate case."

The aforesaid decision was ultimately carried before the Supreme Court and in the decision reported in Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] 3 (Suppl.) SCC 565, the Supreme Court passed the following order :

"We have looked at the form and verification of the affidavit filed before the High Court in support of the application for winding up. We are satisfied that the verification, on a proper and liberal construction, does contain an averment to the effect that the statements made in the affidavit are true and correct to the knowledge of the appellant. We do not think that the affidavit can be described as defective in any respect. But that apart, we are of the opinion that even if there is some slight defect or irregularity in the filing of the affidavit, the appellant should have been given an opportunity to rectify the same.

We are, therefore, of the opinion that the Division Bench was in error in dismissing the appeal on the short ground that the affidavit filed in support of the petition was not in proper form and that the petition could not be entertained. We, therefore, set aside the order of the Division Bench dated August 21, 1991." (emphasis supplied)

With this pronouncement, the decisions of the learned single Judge as well as the Division Bench of the Punjab and Haryana High Court in Mool Chand Wahi's case [1986] 60 Comp Cas 402 must be treated as having been impliedly overruled.

Following the aforesaid Supreme Court decision, this court has also held in DLF Industries Ltd.'s case [1999] 2 Comp LJ 310 (Guj); [2001] 103 Comp Cas 467 that the importance of verification in an affidavit in Form No.3 under Rule 21 of the Companies (Court) Rules, 1959, is to test the genuineness and authenticity of the allegations and also to make the deponent responsible therefor. In essence, the verification is required to enable the court to find out whether it will be safe to act on such affidavit. "Pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered."

In Mrs. Roma Deb v. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Cas 350, speaking for the Delhi High Court Hon'ble Mr. Justice D.P. Wadhwa (as His Lordship then was) also expressed the same view that the court can, in its inherent powers, allow the petitioners to present an affidavit in support of the petition in terms of the prescribed rules and forms, if the affidavit originally filed with the petition does not conform to them. Of course, this the court would do in the ends of justice ; and if the circumstances of the case require.

...............................................

.......................................................

As regards the contention of Mr. Ashwin Lalbhai that even if a fresh affidavit with proper verification in accordance with Rule 3 was permissible, the winding up petition can be said to have been instituted on the date on which such fresh affidavit is filed, we are unable to accept this contention for the reasons which were also commended by the Delhi High Court in the aforesaid case of Mrs. Roma Deb vs. R.C. Sood & Co. Pvt. Ltd. [1987] 2 Comp LJ 174 (Delhi) ; [1990] 67 Comp Case 350 wherein Hon'ble Mr. Justice D.P. Wadhwa observed that the 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 of filing, this can be permitted in the ends of justice; and the court will see if any prejudice is being caused to the other party which may be compensated by costs or otherwise. A balance has to be struck between two warning 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 cannot be rectified. The court is not helpless in a case where the affidavit verifying the petition is not in the prescribed form. 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 could be cured at any stage of the suit. The court will not, however, permit the rectification of the defect in a winding up petition just as a matter of course ; but would take into account all the relevant circumstances including the conduct of the parties.

(Emphasis supplied)

In the instant case, we do not find any infirmity in the order of the learned Company Judge permitting the petitioning-creditor to rectify the defect in the verification on affidavit filed with the company petition. The effect of permitting such rectification is, inter-alia, to relate it back to the original date of filing of the winding up petition and this has been permitted in the interests of justice. No prejudice is caused to the appellant-company by such permission granted by the learned Company Judge."

(Emphasis supplied)

I am in respectful agreement with the above decision of the Division Bench of the Gujarat High Court in Welding Rods Private Ltd. case (supra).

In D & H SECHERON ELECTRODES (P.) LTD. VS. VOLTARE ELECTRODES (P.) LTD., [1997] 89 Company Cases 592 (Andhra Pradesh) (supra), the Affidavit filed in support of the Winding up Petition was verified by a C.K. Padmanabhan, who was neither a Director nor a Principal Officer of the Petitioner-Company, but was Administrative Officer of the Petitioner-Company. A preliminary objection was raised that the Company Petition was not maintainable under the proviso to Rule 21 of the Companies (Court) Rules, 1959, as it was not filed by a validly constituted attorney. In view of the preliminary objection, the Petitioner filed an application seeking leave of the Court under the proviso to Rule 21 to permit C.K. Padmanabhan to make and file the Affidavit in the Winding up Petition. Along with the Affidavit, he filed true copy of the resolution passed by the Board of Directors authorizing C.K. Padmanabhan to sign and file the Winding up Petition against the Respondent-Company and to sign necessary papers as may be required for this purpose.

The Andhra Pradesh High Court held that no doubt, the Petition, as filed, was defective in the absence of obtaining leave of the Court to accept the Affidavit of Padmanabhan, but the same was rectified by filing the Affidavit accompanied by a true copy of the resolution of the Board. The Andhra Pradesh High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

The relevant portion of the judgment of the Andhra High Court is reproduced below (at pages 595, 596 and 597 of the said Company Cases) :

" .................... During the hearing of the arguments, the respondent-company raised a preliminary objection that the company petition is not maintainable under the proviso to rule 21 of the Companies (Court) Rules, 1959 (for short "the Rules"), as it is not filed by a validly constituted attorney and that Sri C.K. Padmanabhan, who verified the petition, is not authorized to file the company petition. As it is a pure question of law, I permitted the respondent-company to raise this plea even at that late stage. Thereupon the petitioner filed Company Application No. 153 of 1995, seeking leave of the court to permit Sri C.K. Padmanabhan, to sign the affidavit and to file this winding up petition. Hence, the third question for consideration is, whether the company petition filed by Sri C.K. Padmanabhan, on behalf of the respondent-company, is maintainable under rule 21 of the Rules.

Taking the third point first, under rule 21, where any petition is presented by a body corporate, the affidavit must be verified by a director, secretary or other principal officer thereof, provided that the judge or Registrar may, for sufficient reason, grant leave to any other person duly authorised by the company to make and file the affidavit, Admittedly, in this case, Sri C.K. Padmanabhan, who filed the company petition is neither a director nor a principal officer of the petitioner-company. He is the administrative officer and is described as a duly constituted attorney. In fact, the office ought not to have numbered it, but posted the same for orders of the court. Thus, it is clear that the company petition as filed in 1988 is not in accordance with rule 21. Realising this defect the petitioner filed Company Application No. 153 of 1995 seeking leave of the court under the proviso to rule 21 to permit Mr. C.K. Padmanabhan to make and file the affidavit in the company petition. Along with the affidavit, he filed a true copy of the resolution passed by the board of directors at its meeting at Indore, on September 6, 1988, authorizing Sri C.K. Padmanabhan to sign and file the winding up petition against the respondent-company and to sign necessary papers as may be required for this purpose. It was also stated in the resolution that Sri C.K. Padmanabhan might be given power of attorney by the company. It is not clear whether any power of attorney has been issued. No copy has been filed by the petitioner. Mr. Y. Ratnakar, learned counsel for the petitioner, contends that in view of this resolution of the board authorizing Sri C.K. Padmanabhan, both to sign and file the company petition, leave may be granted by the court regularizing the affidavit filed by Sri C.K. Padmanabhan. Mr. S. Ravi, learned counsel for the respondent, opposed this, contending that the petitioner has not filed the original resolution of the board or the power of attorney, if any, issued in favour of Sri C.K. Padmanabhan, and relied on the decisions in Mohan Lal Mithal v. Universal Wires Ltd., [1983] 53 Comp Cas 36 (Cal) and Nibro Ltd. v. National Insurance Co. Ltd., AIR 1991 Delhi 25 ; [1991] 70 Comp Cas 388.

Mohan Lal Mithal v. Universal Wires Ltd. [1983] 53 Comp Cas 36-(Cal) was a case of filing of an application under sections 397 and 398 of the Act on behalf of a company holding shares in another company and the letter of consent annexed to the petition was not backed by a resolution of the board of directors but was signed by the secretary of the company who claimed that he was directed to do so by a director of the company. It may be seen here that under rule 88 of the Rules in the case of petitions filed under Section 397, the letter of consent signed by the members authorizing the petitioner to present the petition on their behalf, must be annexed to the petition. Interpreting this rule, the single judge of the Calcutta High Court held that as the letter of consent was not backed by the resolution of the board of directors, but was only signed by the secretary of the company, the petition was not maintainable. This decision does not help the respondent-company, as we are concerned here with rule 21.

The next decision is Nibro Ltd. v. National Insurance Co. Ltd.[1991] 70 Comp Cas 388 (Delhi) in which a suit was filed by a director without the necessary resolution in that behalf by the board. The contention of the company was that under Order 29, rule 1 of the Civil Procedure Code, in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any other director or other principal officer of the corporation who is able to depose to the facts of the case. The Delhi High Court rejected the contention of the company and held that the suit is not maintainable under section 291 of the Act read with sections 14, 26 and 28 and Schedule I, Table A. The court held that Order 29, rule 1 of the Civil Procedure Code does not authorise the person mentioned therein to institute suits on behalf of the corporation but only authorises them to sign and verify the pleadings on behalf of the corporation. This decision is also not applicable to the facts of the case.

In Mehta Steel Syndicate [1993] 3 SCC 565 (sic), an objection was taken that the affidavit filed in support of the winding up petition is defective. The High Court had dismissed the petition on that ground. The Supreme Court held that there was no defect and even assuming that there was defect or irregularity, the party must be given opportunity to rectify the same. In the instant case, no doubt, the petition as filed was defective in the absence of obtaining leave of this court to accept the affidavit of Padmanabhan. But the same has been rectified now by filing the affidavit accompanied by a true copy of the resolution of the board. The proviso to rule 21 does not require any power of attorney to be filed. There is no reason to doubt the true copy of the resolution of the board and to throw out the company petition on the technical ground, that too, after seven years after filing the same. I accordingly, overrule the objection raised by the respondent and allow Company Application No. 153 of 1995."

(Emphasis supplied)

In G.K.W. Limited Vs. Shriram Bearings Ltd., [2002] 109 Company Cases 636 (Delhi) (supra), an objection was raised that the Affidavit filed in support of the Winding up Petition was not in accordance with Rule 21 of the Companies (Court) Rule, 1959, and Form No. 3. The Delhi High Court held that the Affidavit was not in accordance with the provisions of Rule 21 of the Companies (Court) Rules, 1959, and Form No. 3. It was further held that a defective verification was only an irregularity in the procedure and would not be a ground for rejecting the Winding up Petition. The defect could be cured at any stage. Opportunity should be given to the petitioner to file a proper Affidavit in accordance with the Rule and the Form prescribed therein.

The Delhi High Court placed reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) as also on the decision of the Delhi High Court in Mrs. Roma Deb case (supra). The Delhi High Court observed as under (at pages 639 and 640 of the said Company Cases ):

"A combined reading of Form No.3 and rule 21 makes it clear that the person verifying the affidavit has to disclose whether he is director or secretary of the company or an authorised person empowered to sign the affidavit. He has also to indicate which of the paragraphs are true on the basis of information received and believed by him. A perusal of the affidavit filed with this petition by Shri Avinash Chawla shows that he was only an assistant manager of the petitioner-company. He nowhere disclosed how he was competent to verify this affidavit. The mere assertion that he was fully authorised by the petitioner-company to sign and verify the affidavit is not enough to conclude that the affidavit has been signed and verified by a duly authorised person nor can it be said to be in accordance with Form No.3. Mr. Chawla has deposed in the affidavit that he was well acquainted with the facts and circumstances of the case. A reading of para 2 of the affidavit shows that he has not disclosed which of the paragraphs are based on information, derived by him and which were of his personal knowledge. On the contrary a reading of para. No. 2 of the affidavit shows Mr. Chawla verified the facts of the petition on his personal knowledge :

"Para 2. That I have read the accompanying petition and that the facts stated therein are correct and true to my knowledge."

A reading of the petition as a whole shows that all the paragraphs could not be based on his personal knowledge. Some paras. deal with legal submissions, those could not be based on personal knowledge. Similarly, the capital and status of the respondent-company has to be based on knowledge and information derived. For some of the paras of the petition he must have derived the information from official record, therefore, could not have been verified on the basis of his knowledge. Such an affidavit, prima facie, cannot be called in accordance with the provisions of rule 21 and Form No.3.

The question to answer is whether due to such a defective affidavit, the petition is liable to be dismissed? The answer is in the negative. A similar point came up for interpretation before this court in the case of Roma Deb v. R.C. Soad and Co. (P) Ltd. [1987] 2 Comp LJ 174 : [1990] 67 Comp Cas 350. This court, after analyzing rule 21 and other provisions of the Act and Form No.3, came to the conclusion that if the affidavit originally filed with the petition was not as per rule 21 and Form No.3, still the court could in its inherent powers allow the petitioner to present a fresh affidavit in support of his petition in terms of the prescribed rule and form. In that case also the affidavit in support of the petition was found to be defective, inasmuch as it had not been properly verified as required under the rules. It was observed that the court cannot be helpless in a case where the affidavits verifying the petition is not in the prescribed form. A defective verification is only an irregularity in the procedure but will not be a ground for rejecting the petition. That the defect could be cured at any stage of the suit. To the same effect are the observations of the Supreme Court in the case of Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1993] Suppl. 3 SCC 565. In that case also the affidavit filed in support of the winding up application was found to be defective. The apex court found that the verification did not contain the averments which were required under the rules. Still the apex court held that even if there was slight defect or irregularity in the affidavit the applicant ought to have been given opportunity to rectify the same. The order of the Division Bench dismissing the appeal on the ground of defective affidavit was set aside. Opportunity was given to that petitioner to rectify the defect in the affidavit.

Taking support from the above decisions, it can be said that though there is a defect in the affidavit accompanying the winding up petition still the petition cannot be thrown out. Opportunity has to be afforded to the petitioner to file a proper affidavit in accordance with the rule and the form prescribed therein. Order accordingly," The petitioner is given opportunity to file a fresh affidavit within two weeks from today."

(Emphasis supplied)

The learned counsel for the Respondent-Company, however, submits that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam. It is submitted that there is no reference to the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959. The relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 were evidently not placed before the Supreme Court.

The learned counsel for the Respondent-Company further submits that the Respondent-Company can raise the plea of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) being per incuriam even if the said decision of the Supreme Court has been followed in the above decisions of various High Courts.

In order to appreciate the submissions made by the learned counsel for the Respondent-Company, it is necessary to notice certain decisions, which explain the doctrine of per incuriam and the doctrine of sub-silentio.

In A.R. Antulay Vs. R.S. Nayak and another, A.I.R. 1988 Supreme Court 1531, (1988) 2 SCC 602, their Lordships of the Supreme Court ( majority view) opined as follows (paragraphs 44, 45, 49, 50 and 57 of the said AIR) :

"44. It appears that when this Court gave the aforesaid directions on 16th February, 1984, for the disposal of the case against the appellant by the High Court, the directions were given oblivious of the relevant provisions of law and the decision in Anwar Ali Sarkar's case (AIR 1952 SC75)(supra). See Halsbury's Laws of England, 4th Edn., Vol. 26 page 297, para 578 and page 300, the relevant notes 8, 11 and 15; Dias on Jurisprudence, 5th Edn., pages 128 and 130; Young v. Bristol Aeroplane Co. Ltd., (1944) 2 All ER 293 at P. 300. Also see the observations of Lord Goddard in Moore v. Hewitt (1947) 2 All ER 270 at p. 272-A) and Penny V. Nicholas, (1950) 2 All ER 89, 92A. "Per incuriam" are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account to be demonstrably wrong. See Morelle v. Wakeling, [1955] EWCA Civ 1; (1955) 1 All ER 708, 718F. Also see State of Orissa v. Titaghur Paper Mills Co. Ltd., [1985] INSC 43; (1985) 3 SCR 26 : [1985] INSC 43; (AIR 1985 SC 1293). We are of the opinion that in view of the clear provisions of section 7(2) of the Criminal Law Amendment Act, 1952 and Articles 14 and 21 of the Constitution, these directions were legally wrong.

45. The principle that the size of the Bench - whether it is comprised of two or three or more Judges - does not matter, was enunciated in Young v. Bristol Aeroplance Co. Ltd. (supra) and followed by Justice Chinnappa Reddy in Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, [1984] INSC 208; (1985) 2 SCR 8 : [1984] INSC 208; (AIR 1985 SC 231) where it has been held that a Division Bench of three Judges should not overrule a Division Bench of two Judges, has not been followed by our Courts. According to well-settled law and various decisions of this Court, it is also well-settled that a Full Bench or a Constitution Bench decision as in Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) was binding on the Constitution Bench because it was a Bench of 7 Judges.

46.The principle in England that the size of the Bench does not matter, is clearly brought out in the decision of Evershed M.R. in the case of Morelle v. Wakeling, [1955] EWCA Civ 1; (1955 (1) All ER 708) (supra). The law laid down by this Court is somewhat different. There is a hierarchy within the Court itself here, where larger Benches overrule smaller Benches. See the observations of this Court in Mattulal v. Radhe Lal, [1974] INSC 103; (1975) 1 SCR 127 : [1974] INSC 103; (AIR 1974 SC 1596), Union of India v. K.S. Subramanian [1976] INSC 163; (1977) 1 SCR 87 at p. 92 : [1976] INSC 163; (AIR 1976 SC 2433 at p. 2437) and State of U.P. v. Ram Chandra Trivedi, [1976] INSC 207; (1977) 1 SCR 462 at p. 473 : [1976] INSC 207; (AIR 1976 SC 2547 at p. 2555). This is the practice followed by this Court and now it is a crystallized rule of law. See in this connection, as mentioned hereinbefore, the observations of the State of Orissa v. Titaghur Paper Mills (AIR 1985 SC 1293) (supra) and also Union of India v. Godfrey Philips India Ltd., 1985 Suppl (3) SCR 123 at p. 145 : [1985] INSC 219; (AIR 1986 SC 806 at p, 815).

49................................................................It is true that Shri Jethmalani has shown us the prayers made before the High Court which are at page 121 of the paper-book. He argued that since the transfers have been made under section 407, the procedure would be that given in section 407 (8) of the Code. These directions, Shri Jethmalani sought to urge before us, have been given in the presence of the parties and the clarificatory order of April 5, 1985 which was made in the presence of the appellant and his Counsel as well as the Counsel of the State Government of Maharashtra, expressly recorded that no such submission was made in connection with the prayer for grant of clarification............................

50.According to Shri Jethmalani, the doctrine of per incuriam has no application in the same proceedings. We are unable to accept this contention........................."

57. Shri Jethmalani urged that the directions given on 16th February, 1984, were not per incuriam. We are unable to accept this submission. It was manifest to the Bench that exclusive jurisdiction created under Section 7(1) of the 1952 Act read with section 6 of the said Act, when brought to the notice of this Court, precluded the exercise of the power under section 407 of the Code. There was no argument, no submission and no decision on this aspect at all. There was no prayer in the appeal which was pending before this Court for such directions. Furthermore, in giving such directions, this Court did not advert to or consider the effect of Anwar Ali Sarkar's case [1952] INSC 1; (AIR 1952 SC 75) (supra) which was a binding precedent. A mistake on the part of the Court shall not cause prejudice to any one. ................................."

(Emphasis supplied)

In Municipal Corporation of Delhi V. Gurnam Kaur, [1988] INSC 271; AIR 1989 SC 38, their Lordships of the Supreme Court explained the meaning of per incuriam and sub-silentio as follows (paragraphs 11 & 12 of the said AIR):

"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn., explains the concept of sub silentio at p. 153 in these words:

"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio."

12. In Gerard V. Worth of Paris Ltd. (K), (1936) 2 All ER 905 the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority."

(Emphasis supplied)

In State of U.P. and another Vs. Synthetics and Chemicals Ltd. and another[1991] INSC 160; , (1991) 4 SCC 139 (supra), their Lordships of the Supreme Court held as under (paras 40 and 41 of the said SCC) :

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. [Young v. Bristol Aeroplane Co. Ltd., (1944) 1 K.B. 718 :(1944) 2 All ER 293]. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, (1962) 2 SCR 558 : [1961] INSC 200; AIR 1962 SC 83), this Court while pointing out the procedure to be followed when conflicting decisions are placed before a bench extracted a passage from Halsbury's laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.

41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law ? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, 677 : (1941) 2 All ER 11, the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry, [1967] INSC 35; AIR 1967 SC 1480 : [1967] INSC 35; (1967) 2 SCR 650, it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

(Emphasis supplied)

In Government of Andhra Pradesh and another Vs. B. Satyanarayan Rao (dead) by L. Rs. and others, A.I.R. 2000 Supreme Court 1729, their Lordships of the Supreme Court held as under (paragraph 8 of the said AIR):

"8. Learned counsel for the respondent attempted to convince us that the decision in the case of State of A.P. Vs. V. Sadanandam, (AIR 1989 SC 2060 : 1989 Lab IC 2024)(supra) has to be ignored on the principle of per incuriam as certain relevant provisions of the Rules were not considered in the said case, and in any case this case requires to be referred to a larger Bench of three Judges. Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue. This is not the case here. In State of A. P. Vs. V. Sadanandam (supra) the controversy was exactly the same as it is here and this Court after considering paragraph 5 of the Presidential Order of 1975 held that the Government has power to fill a vacancy in a zone by transfer. We, therefore, find that rule of per incuriam cannot be invoked in the present case. Moreover, a case cannot be referred to a larger Bench on mere asking of a party. A decision by two Judges has a binding effect on another co-ordinate Bench of two Judges, unless it is demonstrated that the said decision by any subsequent change in law or decision ceases to laying down a correct law. We, therefore, reject the arguments of learned counsel for the respondents."

(Emphasis supplied)

In Arnit Das Vs. State of Bihar, AIR 2000 SC 2264, their Lordships of the Supreme Court held as under (paragraph 20 of the said AIR) :

"20. A decision not expressed, not accompanied by reasons and not proceeding on conscious consideration of an issue can not be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not ratio decidendi. This is the rule of sub-silentio, in the technical sense when a particular point of law was not consciously determined. (See State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, Para 41)."

(Emphasis supplied)

In M/s A-One Granites vs. State of U.P. and others, AIR 2001 Supreme Court 1203, their Lordships of the Supreme Court laid down as under (paragraphs 10, 11 and 12 of the said AIR) :

"10. The first question which falls for consideration of this Court is as to whether the question regarding applicability of Rule 72 of the Rules in relation to the present lease is concluded by the earlier decision of this Court rendered in Prem Nath Sharma v. State of U.P. , (1997) 4 SCC 552 : (1997 AIR SCW 2121 : AIR 1997 SC 2252 : 1997 All LJ 1201). From a bare perusal of the said judgment of this Court it would be clear that the question as to whether Rule 72 was applicable or not was never canvassed before this Court and the only question which was considered was whether there was violation of the said rule.

11. This question was considered by the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment. Following the said decision, this Court in the case of Municipal Corporation of Delhi v. Gurnam Kaur, [1988] INSC 271; (1989) 1 SCC 101 : [1988] INSC 271; (AIR 1989 SC 38) observed thus (at p. 43 of AIR) :

"In Gerard v. Worth of Paris Ltd.(K), (1936) 2 All ER 905 (C A), the only point argued was on the question of priority of the claimant's debt, and on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancester Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not held thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed."

In State of U.P. v. Synthetics and Chemicals Ltd., [1991] INSC 160; (1991) 4 SCC 139, reiterating the same view, this Court laid down that such a decision cannot be deemed to be a law declared to have binding effect as is contemplated by Article 141 of the Constitution of India and observed thus :

"A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141."

In the case of Arnit Das v. State of Bihar, 2000 (5) SCC 488 : (2000 AIR SCW 2037 : AIR 2000 SC 2264 : 2000 Cri LJ 2971), while examining the binding effect of such a decision, this Court observed thus (para 20) :

"A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined."

12. Thus we have no difficulty in holding that as the question regarding applicability of Rule 72 of the Rules having not been even referred to, much less considered by this Court in the earlier appeals, it cannot be said that the point is concluded by the same and no longer res integra and accordingly this Court is called upon to decide the same."

(Emphasis supplied)

In Nirmal Jeet Kaur v. State of M.P. and another, (2004) 7 SCC 558, their Lordships of the Supreme Court opined as under (paragraphs 20 and 21 of the said SCC) :

"20. In Salauddin case [1995] INSC 820; (AIR 1996 SC 1042) also this Court observed that the regular court has to be moved for bail. Obviously, an application under Section 439 of the Code must be in a manner in accordance with law and the accused seeking remedy under Section 439 must ensure that it would be lawful for the court to deal with the application. Unless the applicant is in custody his making application only under Section 439 of the Code will not confer jurisdiction on the court to which the application is made. The view regarding extension of time to "move" the higher court as culled out from the decision in K.L. Verma case [(1998) 9 SCC 348] shall have to be treated as having been rendered per incuriam, as no reference was made to the prescription in Section 439 requiring the accused to be in custody. In State v. Ratan Lal Arora [(2004) 4 SCC 590] it was held that where in a case the decision has been rendered without reference to statutory bars, the same cannot have any precedential value and shall have to be treated as having been rendered per incuriam. The present case stands at par, if not, on a better footing. The provisions of Section 439 do not appear to have been taken note of.

21. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. [(1944) 2 All E R 293] is avoided and ignored if it is rendered "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India (in short "the Constitution") which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139). To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

In Babu Parasu Kaikadi (dead) by L.Rs. Vs. Babu (dead) by L.Rs., AIR 2004 Supreme Court 754, their Lordships of the Supreme Court held as under (paragraphs 15, 16, 17 and 18 of the said AIR) :

"15. Having given our anxious thought, we are of the opinion that for the reasons stated hereinbefore, the decision of this Court in Dhondiram Tatoba Kadam (supra), having not noticed the earlier binding precedent of the co-ordinate Bench and having not considered the mandatory provisions as contained in Sections 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent.

16. In Halsbury Laws of England, 4th Edition Volume 26 it is

stated :

"A decision is given per incurima when the Court has acted in ignorance of a previous decision of its own or of a Court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow or when it has acted in ignorance of a House of Lords decision, in which case it must follow that decision; or when the decision is given in ignorance of the terms of a statute or rule having statutory force."

In State of U.P. and another v. Synthetics and Chemicals Ltd. and another, reported in [1991] INSC 160; 1991 (4) SCC 139, this Court observed :

"Incuria" literally means ''carelessness'. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ''quotable in law' is avoided and ignored if it is rendered, ''in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.) Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law."

17. In Govt. of Andhra Pradesh and another v. B. Satyanarayana Rao (Dead) by L. Rs. (2000(4) SCC 262), it has been held as follows :

"Rule of per incuriam can be applied where a Court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any statute while deciding that issue."

18. Furthermore, this Court, while rendering judgment in Dhondiram Tatoba Kadam (supra), was bound by its earlier decision of Co-ordinate Bench in Ramchandra Keshav Adke (supra). We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the bar and also without reference to the mandatory provisions of the Act."

(Emphasis supplied)

In N. Bhargavan Pillai (dead) by L. Rs. and another Vs. State of Kerala, AIR 2004 Supreme Court 2317, their Lordships of the Supreme Court held as under (paragraph 14 of the said AIR) :

"14 Coming to the plea relating to benefits under the Probation Act, it is to be noted that Section 18 of the said Act clearly rules out application of the Probation Act to a case covered under Section 5(2) of the Act. Therefore, there is no substance in the accused-appellant's plea relating to grant of benefit under the Probation Act. The decision in Bore Gowda's case (supra) does not even indicate that Section 18 of the Probation Act was taken note of. In view of the specific statutory bar the view, if any, expressed without analyzing the statutory provision cannot in our view be treated as a binding precedent and at the most is to be considered as having been rendered per incuriam. Looked at from any angle, the appeal is sans merit and deserves dismissal which we direct."

(Emphasis supplied)

In Central Board of Dawoodi Bohra Community and another Vs. State of Maharashtra and another, AIR 2005 Supreme Court 752, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7 The Constitution Bench in the case of Chandra Prakash and Ors. Vs. State of U.P. & Anr.-(2002) 4 SCC 234. took into consideration the law laid down in Parija's case and also referred to the decision in Union of India and Anr. V. Raghubir Singh (dead) by L. Rs. etc. relied on by Ms. Indra Jaising, the learned Senior Counsel and then reiterated the view taken in Parija's case. Per incuriam means of decision rendered by ignorance of a previous binding decision such as a decision of its own or of a Court of co-ordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct but cannot be said to be per incuriam. It is true that Raghubir Singh's case was not referred to in any case other than Chandra Prakash & Ors.' case but in Chandra Prakash & Ors. case. Raghubir Singh's case and Parija's case both have been referred to and considered and then Parija's case followed. So the view of the law taken in series of cases to which Parija's case belongs cannot be said to be per incuriam."

(Emphasis supplied)

In Sunita Devi Vs. State of Bihar and another, AIR 2005 Supreme Court 498, their Lordships of the Supreme Court laid down as under (paragraph 20 of the said AIR) :

"20. "Incuria" literally means "carelessness". In practice per incuriam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The "quotable in law", as held in Young v. Bristol Aeroplane Co. Ltd. (1944) 2 All ER 293, is avoided and ignored if it is rendered, "in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India, 1950 (in short the ''Constitution') which embodies the doctrine of precedents as a matter of law. The above position was highlighted in State of U.P. and another v. Synthetics and Chemicals Ltd. and another [1991] INSC 160; (1991) 4 SCC 139. To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience."

(Emphasis supplied)

From a perusal of the above decisions of the Supreme Court, it is evident that the doctrine of per incurium applies where the point involved in a case is decided but the decision on the point is given in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. In such circumstances, the decision is treated as per incurium.

The doctrine of sub-silentio applies where the case involves various points, and the decision is given on one or some of the points while the remaining points are not considered and are not decided. Therefore, the decision is silent on such remaining points. In such circumstances, the decision is said to pass sub-silentio on such remaining points.

In short, the doctrine of per incurium applies where the point in question is decided by the Court in ignorance of a binding decision to the contrary or a relevant statutory provision to the contrary. On the other hand, the doctrine of sub-silentio applies where the point in question is not considered and decided by the Court.

In either of the two situations, the decision on the point in question is not binding.

Coming now to the present case, the doctrine of sub-silentio does not apply to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Malhotra Steel Syndicate case, the points involved were as to whether substantial compliance with Form No.3 is necessary, as to whether any non-compliance with Form No.3 is an illegality or is a mere irregularity, and as to whether fresh opportunity to rectify the defect in the affidavit should be given.

The said decision of the Supreme Court is not silent on the above points involved in the case before the Supreme Court. Therefore, the said decision cannot be said to pass sub-silentio on the said points.

The question then arises as to whether the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incurium.

From a perusal of the decisions of the Supreme Court referred to above, it will be noticed that for a decision to be rendered per incuriam, it is necessary that the following requirements should be fulfilled :

1- The decision has been given in "ignorance or forget-fulness" of some authority binding on the Court concerned or of some relevant statutory provision.

2- The said binding authority or the said statutory provision is contrary to or inconsistent with the decision of the Court concerned.

Therefore, merely because some binding authority or some statutory provision has been ignored in the decision of the Court concerned, will not render the decision per incuriam.

It is further necessary that the binding authority or the statutory provision should be inconsistent with or contrary to the decision of the Court concerned.

Further, the doctrine of per incuriam applies where the decision has been given in "ignorance or forget-fulness" of some binding authority or a relevant statutory provision. Merely because a binding authority or a relevant statutory provision has not been referred to in the decision, it will not render the decision per incuriam provided that such binding authority or statutory provision is not inconsistent with or contrary to the decision of the Court concerned.

Reference in this regard may be made to the following decisions.

In M/s Gupta Sugar Works Vs. State of U.P. and others, AIR 1987 Supreme Court 2351, their Lordships of the Supreme Court opined as follows (paragraph 12 of the said AIR) :

"12. It is true that there is no express reference to Panipat [1972] INSC 272; (AIR 1973 SC 537) and Anakapalle [1972] INSC 271; (AIR 1973 SC 734) in the judgment in New India Sugar Works. But the judgment need not be a digest of cases. It need not be written like a thesis. The decision in New India Sugar Works (AIR 1981 SC 998) may be brief, but not less predictable on the principles of Panipat and Anakapalle. There this Court found the levy price reasonable even from the point of view of the industry. This Court took into consideration the liberty reserved to manufacturers to sell freely 50 % of the sugar manufactured and also 100% of the produce by 2nd and 3rd processes. This Court was of opinion that by such a free sale the industry could get reasonable return. We agree with this conclusion and see no reason for reconsideration."

(Emphasis supplied)

In V. Sudeer, etc. Vs. Bar Council of India and another, AIR 1999 Supreme Court 1167, their Lordships of the Supreme Court held as under (paragraph 26 of the said AIR) :

"26........................................................... However, the question is whether Section 49 (1) (ah) confers such a power on the Bar Council of India. So far as this question is concerned, it has stood answered against the respondent Bar Council of India by a three Judge Bench Judgment of this Court reported in Indian Council of Legal Aid & Advice case (1995 AIR SCW 473 (supra). A. M. Ahmadi, CJI, speaking for the three Judge Bench, had to consider in the said decision, the question whether the Bar Council of India could frame a rule restricting the enrolment of advocates to the State roll to only those who had not completed 45 years of age. Holding such rule to be ultra vires the powers of the Bar Council of India under the Act, it was held that such a rule could not be sustained under Section 49 (1)(ah) as the said provision dealt with a situation after enrolment of advocates and could not take in its sweep any situation prior to their enrolment. Shri Rao, learned senior counsel for the respondent Bar Council of India, tried to salvage the situation by submitting that the said decision was pari incuriam on the ground that Section 24(3)(b) was not noticed. We have already held that Section 24 (3)(d) is the provision which permits the Bar Council of India by exercise of rule making power to make otherwise ineligible person eligible for enrolment and does not act in the reverse direction to make otherwise eligible persons ineligible. Once that conclusion is reached, Section 24(3)(d) becomes totally irrelevant for deciding the question whether the rule impugned before the three Judge Bench in that case could have been sustained by the Bar Council of India by taking resort to Section 24(3)(d). Non-consideration of such irrelevant provision, therefore, cannot make the ratio of the decision in the aforesaid case pari incurium. The second ground on which Shri Rao tried to submit that the said decision was pari incurium was by inviting our attention to a Constitution Bench Judgment of this Court in In re : Lily Isabel Thomas case [1964] INSC 5; (AIR 1964 SC 855) (supra). Now it must be kept in view that the said decision was rendered in connection with an entirely different statutory scheme. Section 52 of the Act, as noted earlier, saves power of the Supreme Court to make Rules under Article 145 of the Constitution of India for determining persons who are eligible to practise before the Supreme Court. Thus, the constitutional power of the Supreme Court for regulating the working of advocates in the Supreme Court who were otherwise entitled to practise in any Court in India under the Act could be validly exercised. When we turn to the constitutional power of the Supreme Court under Article 145, we find clearly mentioned therein that subject to the provisions of any law made by the Parliament, the Supreme Court may from time to time, with the approval; of the President, make rules for regulating generally the practice and procedure of the Court including rules as to the persons practising before the Court. As Section 52 of the Act has expressly saved the powers of the Supreme Court under Article 145 for determining the persons who shall be entitled to practise and plead before the Supreme Court, Article 145 could operate on its own without any fetter being imposed by any statutory law enacted by the Parliament. Accordingly, in the light of Article 145, a question arose before the Constitution Bench in the aforesaid case, whether the Supreme Court was competent to enact a rule in connection with advocates practicing before it, who could act as an advocate on record subject to their passing examination as laid down under the rules. The term ''persons practicing before the Court' as laid down by Article 145 (1)(a) in connection with such rule making power was interpreted to take in its sweep not only persons actually practising but even entitled to practise before the Supreme Court. In this connection, the phraseology found in the Union List in the 7th Schedule of the Constitution in Entry 77, namely persons entitled to practise before the Supreme Court was held to be in pari materia with the phrase ''persons practicing before the Court' as found in Article 145 (1)(a). In the light of the aforesaid wide sweep of Article 145 (1)(a), expressly saved by Section 52 of the Act it was held that the rule laying down examination to be undergone by practicing advocates before the Supreme Court before they could act as advocates on record was within the rule making power of the Supreme Court. It is difficult to appreciate how the aforesaid decision of the Constitution Bench rendered in the light of an entirely different constitutional scheme can be of any assistance to the Bar Council of India in the present case. For sustaining the rule making power of the Bar Council of India, the express provisions of Section 7 and Section 24 (3)(d) read with Section 49 (1)(ah) would be the only relevant provisions which were considered by this Court in a three Judge Bench judgment Indian Council of Legal Aid & Advice case (1995 AIR SCW 473) (supra). The ratio of the Constitution Bench judgment rendered in connection with an entirely different question posed for decision In the light of the relevant provisions of the constitutional scheme dealing with the rule making power of the Supreme Court under Article 145, therefore, cannot be said to be laying down anything contrary to what the three Judge Bench Judgment laid down in connection with this very statutory scheme which squarely arises for consideration in the present case. Hence, even the second ground canvassed by learned senior counsel, Shri Rao for the Bar Council of India, for whittling down the binding effect of the aforesaid three Judge Bench judgment of this Court, cannot be sustained".

(Emphasis supplied)

In Director of Settlements, A.P. and others Vs. M.R. Apparao and another, AIR 2002 Supreme Court 1598, their Lordships of the Supreme Court laid down as under (paragraph 7 of the said AIR) :

"7. So far as the first question is concerned. Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ''declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle under-lying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An ''obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be dented that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR 1970 SC 1002 and AIR 1973 SC 794). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court, which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324). We have to answer the first question bearing in mind the aforesaid guiding principles. We may refer to some of the decisions cited by Mr. Rao in elaborating his arguments contending that the judgment of this Court dated 6th February, 1986 cannot be held to be a law declared by the Court within the ambit of Article 141 of the Constitution. Mr. Rao relied upon the judgment of this Court in the case of Pandit M.S. M. Sharma v. Shri Sri Krishna Sinha and others, 1959 Suppl (1) SCR 806, wherein the power and privilege of the State Legislature and the fundamental right of freedom of speech and expression including the freedom of the press was the subject matter of consideration. In the aforesaid judgment it has been observed by the Court that the decision in Gunupati Keshavram Reddy v. Nafisul Hasan, AIR 1954 SC 636, relied upon by the counsel for the petitioner which entirely proceeded on a concession of the counsel cannot be regarded as a considered opinion on the subject. There is no dispute with the aforesaid proposition of law."

(Emphasis supplied)

In State of Bihar Vs. Kalika Kuer @ Kalika Singh and others, AIR 2003 Supreme Court 2443: JT 2003 (4) SC 489 (supra), their Lordships of the Supreme Court held as under (paragraph 9 of the said AIR) :

"9. In Fuerst Day Lawson Ltd. v. Shivaraj V. Patil (2001) 6 SCC 356, this Court observed :

"A prior decision of the Supreme Court on identical facts and law binds the Court on the same points of law in a latter case. In exceptional instances, where obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, the principle of per incuriam may apply. Unless it is a glaring case of obtrusive omission, it is not desirable to depend on the principle of judgment "per incuriam". It has to be shown that some part of the decision was based on a reasoning which was demonstrably wrong, for applying the principle of per incuriam."

(Emphasis Supplied)

Keeping in view the above legal position, let us consider the submission of the learned counsel for the Respondent-Company that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is per incuriam.

In the present case, Rule 21 of the Companies (Court) Rules, 1959, inter-alia, requires that the Affidavit verifying the petition shall be in Form No. 3.

The Companies (Court) Rules, 1959 do not contain any provision prohibiting the Court from permitting a proper Affidavit to be filed. In fact, Rule 17 of the said Rules lays down that the Forms set forth in Appendix I, where applicable, shall be used "with such variations as circumstances may require".

Moreover, Rule 9 of the Companies (Court) Rules, 1959 lays down that nothing in the said Rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

As there is no rule prohibiting the Court from permitting a proper Affidavit to be filed, it cannot be said that any statutory provision was ignored by the Supreme Court in Malhotra Steel Syndicate case (supra).

Further, there was no decision binding on the Supreme Court in this regard. The decisions on the question under consideration, which have been relied upon by the learned counsel for the Respondent-Company, were those given by the High Courts.

Therefore, it cannot be said that any binding decision was ignored by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra).

Hence, it is evident that neither any statutory provision nor any binding decision contrary to or inconsistent with the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) was ignored by the Supreme Court while giving the said decision.

Moreover, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) shows that the Supreme Court considered the Division Bench decision of the Punjab and Haryana High Court which had dismissed the Appeal on the short ground that the Affidavit filed in support of the petition was not in proper Form and that the petition could not be entertained.

Having regard to the facts of the case, as evidently incorporated in the Division Bench decision of the Punjab and Haryana High Court, the Supreme Court examined the Form and Verification of the Affidavit filed before the High Court in support of the Application for winding-up.

The Supreme Court concluded that on a proper and liberal construction, the Affidavit filed in support of the application for winding up could not be described as defective in any respect.

The Supreme Court further laid down that even if there was any defect or irregularity in the Affidavit, opportunity should have been given to rectify the same.

Thus, a perusal of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) clearly shows that the Supreme Court was conscious of the requirements of the Companies (Court) Rules, 1959, and keeping in view the same, it gave its decision in Malhotra Steel Syndicate case (supra). Merely because the provisions of the Companies (Court) Rules, 1959 have not been specifically referred to in the decision in Malhotra Steel Syndicate case (supra), the same cannot be construed to mean that the said decision was given in ignorance of the provisions of the said Rules.

Thus, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be said to be per incuriam, as submitted by the learned counsel for the Respondent-Company.

The learned counsel for the Respondent-Company has also submitted that the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) is not a binding precedent under Article 141 of the Constitution of India, as the Supreme Court did not consider the relevant provisions, and no ratio can be culled out from the said decision.

Reliance in this regard has been placed on the following decisions :

1-Krishena Kumar Vs. Union of India and others, AIR 1990 Supreme Court 1782 (supra).

2-Government of India Vs. Workman of State Trading Corporation & others (1997) 11 SCC 641 (supra).

3-Islamic Academy of Education and another Vs. State of Karnataka and others, 2003 (6) Supreme Court Today 303 = (2003) 6 Supreme Court Cases 697==AIR 2003 SC 3724 (supra).

Having considered the submissions made by the learned counsel for the Respondent-Company, I find myself unable to accept the same.

Various principles, which follow from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), have already been noted in the earlier part of this judgment. Therefore, it is not correct to suggest that no ratio can be culled out from the said decision.

As regards the decisions relied upon by the learned counsel for the Respondent-Company in this regard, let us first take up Krishena Kumar case, AIR 1990 Supreme Court 1782 (supra).

In this case, their Lordships of the Supreme Court laid down as under (paragraphs 17, 18 and 19 of the said AIR ):

"17. The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara's case and how far that would be applicable to the case of the P.F. retirees.

18. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required." This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees (1882 (7) AC 259) and Lord Halsbury in Quinn v. Leathem (1901) AC 495 (502). Sir Frederick Pollock has also said : "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."

19. In other words, the enunciation of the reason or principle upon which a question before a Court has been decided is alone as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol.26, para 573 :

"The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to be bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi."

(Emphasis supplied)

This decision thus lays down that the underlying principle, that is, the general / abstract reasons or the general /abstract grounds upon which the decision is based ( as distinguished from the concrete /specific peculiarities of the particular case) form the ratio decidendi. If the ratio decidendi is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it.

Applying the above propositions to the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the underlying principles, that is, the general/ abstract reasons or the general /abstract grounds upon which the said decision is based, have already been noted in the earlier part of this judgment, and the same form the ratio decidendi of the said decision in Malhotra Steel Syndidate case (supra).

In Government of India case, (1997) 11 SCC 641 (supra), the Madras High Court had relied upon a decision of the Supreme Court in G. Govinda Rajulu Vs. A.P. State Construction Corporation Ltd., 1986 Suppl SCC 651.

The Supreme Court in Government of India case (supra) held that the decision in G. Govinda Rajulu case "is virtually a non-speaking order which does not set out the facts and the circumstances in which the direction came to be issued against the Government. It is not clear as to what was the connection between the respondent-Corporation and the State Government...................it does not set out the facts or the reason for the conclusion or direction given. It can, therefore, not be treated as a binding precedent."

(Emphasis supplied)

The above propositions laid down in Government of India case (supra) have no application to the decision in Malhotra Steel Syndicate case (supra).

The decision in Malhotra Steel Syndicate case cannot be described as non-speaking order. The said decision refers to the material facts and circumstances necessary for deciding the case. It gives reasons for the conclusions drawn and the directions given in the decision.

In Islamic Academy of Education and another Vs. State of Karnataka and others, (2003) 6 Supreme Court Cases 697 (supra), their Lordships of the Supreme Court laid down as under (Paragraphs 139, 140, 141, 142, 143, 144, 145, and 146 of the said SCC) :

"139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj, (2001) 2 SCC 721).

140. In Padma Sundara Rao v. State of T.N., (2002) 3 SCC 533, it is stated (SCC p. 540, paragraph 9):

"There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial ulterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board, [1972] UKHL 1; (1972) 1 All ER 749 (HL) (Sub nom British Railways Board v. Herrington), Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases."

(See also Haryana Financial Corpn. V. Jagdamba Oil Mills,(2002) 3 SCC 496)

141. In General Electric Co. v. Renusagar Power Co., [1987] INSC 207; (1987) 4 SCC 137, it was held : (SCC p. 157, paragraph 20)

"As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words ''adjudication of the merits of the controversy in the suit' were used by this Court in State of U.P. v. Janki Saran Kailash Chandra, AIR 1973 SC 2071, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided."

142. In Rajeswar Prasad Misra v. State of W.B., [1965] INSC 130; AIR 1965 SC 1887 (sic) it was held :

"Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments. It is also well known that ratio of a decision is the reasons assigned therein."

(See also Amar Nath Om Prakash v. State of Punjab, (1985)1 SCC 345 and Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573.)

143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, wherefor, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.

144. In Keshav Chandra Joshi v. Union of India, 1992 Suppl (1) SCC 272, this Court when faced with difficulties where specific guidelines had been laid down for determination of seniority in Direct Recruit Class II Engg. Officers' Assn. V. State of Maharashtra, (1990) 2 SCC 715, held that the conclusions have to be read along with the discussions and the reasons given in the body of the judgment.

145. It is further trite that a decision is an authority for what it decides and not what can be logically deduced therefrom. (See Union of India v. Chajju Ram, (2003) 5 SCC 568.)

146. The judgment of this Court in T.M.A. Pai Foundation, (2002) 8 SCC 481, will, therefore, have to be construed or to be interpreted on the aforementioned principles. The Court cannot read some sentences from here and there to find out the intent and purport of the decision by not only considering what has been said therein but the text and context in which it was said. For the said purpose the Court may also consider the constitutional or relevant statutory provisions vis-à-vis its earlier decisions on which reliance has been placed."

(Emphasis supplied)

This decision, thus, lays down that the ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal.

This decision also lays down that a decision is an authority for what it decides and not what can be logically deduced therefrom.

Applying the above tests to the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra), a reading of the said judgment in its entirety shows that the said judgment is based on the principles and reasons enumerated in the earlier part of this judgment. The said principles and reasons, therefore, constitute the ratio decidendi of the judgment of the Supreme Court in Malhotra Steel Syndicate case (supra).

The question may be examined from another angle also, as submitted by the learned counsel for the Petitioner-Company.

Article 141 of the Constitution of India lays down as under :

"141. Law declared by Supreme Court to be binding on all Courts.--The law declared by the Supreme Court shall be binding on all Courts within the territory of India."

In view of Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts including the High Courts of the country.

Therefore, the decisions of the Supreme Court are binding on all Courts including the High Courts of the country.

It is not open to any High Court to by-pass the binding nature of the decision of the Supreme Court on the ground that certain aspects were not considered in the decision of the Supreme Court. Even if certain aspects were not specifically examined by the Supreme Court in its decision or certain statutory provisions were not specifically referred to by the Supreme Court in its decision, the same cannot take away the binding nature of the decision of the Supreme Court.

In view of the above legal position, it is evident that even if the submissions made by the learned counsel for the Respondent-Company that the relevant provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 have not been specifically referred to by the Supreme Court in its decision in Malhotra Steel Syndicate case (supra), were to be accepted, still, the said decision of the Supreme Court will not lose its binding force on this Court.

The above legal position is apparent from the various decisions relied upon by the learned counsel for the Petitioner-Company.

In Union of India Vs. Firm Ram Gopal Hukum Chand and others, AIR 1960 Allahabad 672, a learned Single Judge of this Court held as under (paragraphs 25, 26, 27, 28 and 34 of the said AIR) :

"25. Two questions arise in this connection. First, under what circumstances will a legal principle enunciated by the Supreme Court amount to a declaration of law under Art. 141, and secondly, does this Article apply only to express declaration of law or also to those which are clearly implied ? It is necessary to examine the scope and purpose of Art. 141.

26. In the various authorities cited before me, it has been overlooked--if I may say so with deep respect---that the doctrine of the supremacy of any declaration of law by the Supreme Court has been made a part of the constitutional law of the re-public. It therefore rests on a much loftier pedestal than judicial conventions under which every inferior court is bound to follow the previous decisions of a Superior Court.

If the object had been merely to guarantee the binding force of the decisions of the Supreme Court as the highest court of the republic, no special provisions in the Constitution was required. The founders were not inserting a superfluous or redundant article in the Constitution. Many of them were eminent lawyers and jurists, and well acquainted with judicial practice and principles according to which the decisions of the Supreme Court have the same binding force as those of the House of Lords in England even without Art. 141.

27. But they were not content with the mere binding force of the decisions of the Supreme Court. The language of Art. 141 shows that the Founders intended to extend its scope beyond the actual decisions of the Supreme Court to every declaration of law made by it. This is clear from a comparison of the language of the Article with that of Sec. 212 of the Government of India Act, 1935, which gave a binding force to the decisions of the old Federal Court.

That Section provided that "the law declared by the Federal Court and by any judgment of the Privy Council shall, so far as applicable, be binding on and shall be followed by all Courts in British India". But Art. 141 of our Constitution provides that "the law declared by the Supreme Court shall be binding on all courts within the territory of India". The word "judgment" is not used, and the qualifying words "as far as applicable" have been deleted.

The omission is significant and negatives any suggestion that the Founders had in mind the principle of ratio decidendi or the binding effect of decisions, but nothing more. I am inclined to the view that Art. 141 has the effect, in addition to investing the decisions of the Supreme Court with a binding force, of creating a constitutional organ whose declaration of law pronounced ex cathedra shall be binding on all courts in the republic.

Under this article it is not necessary that a pronouncement of the Supreme Court should be part of the ratio decidendi of any judgment. An obiter dictum or a mere enunciation of a principle of law would amount to a declaration of law under Art. 141, and the manner and circumstances of its pronouncement are immaterial, provided it is made by the Supreme Court ex cathedra.

28. It was argued by Mr. Sapru that the extension of Article 141 to obiter dicta or observations which do not form part of the ratio decidendi of a judicial decision would tie up the discretion of the High Courts even in matters not decided by the Supreme Court, and it could not have been the intention of the Founding fathers to fetter the powers of the High Court to this extent. There is a short answer to this argument.

There is not the slightest ground for fearing if I may venture to say with profound respect - that the highest court of the Republic is likely to make an unrestricted use of its powers under Article 141 and flood the realm with unnecessary declarations of law. On the contrary, the Supreme Court have already taken the strict view that no principle of law should be proclaimed by it unless required for the decision of a matter in dispute before the Court.

In Central Bank of India v. Their Workmen, [1959] INSC 82; AIR 1960 SC 12, a Bench of five judges of the Supreme Court observed that it was not necessary for the Court to decide hypothetical questions which may arise in any future reference and that the Court does not give speculative opinions in the exercise of its appellate powers. Again, in Basheshar Nath v. Commr. of Income-tax, [1958] INSC 117; AIR 1959 SC 149, Das, C.J. and Kapur, J. took the view that the Supreme Court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it.

Thus the judges of the Supreme Court are, if I may say so again with profound respect, conscious that any pronouncement of law by the Court acquires "potency" under Art. 141 and that therefore such declarations should be made only when necessary. But this is a matter concerning the self-discipline of the Supreme Court which does not affect the Constitutional doctrine that any declaration of law, howsoever made, by the Supreme Court, is binding on all courts in India.

34. For these reasons I am of the opinion that Art. 141 extends to every declaration of law made by the Supreme Court even if it is obiter or not the foundation of its decision in a dispute before it. I am fortified in this view by several opinions of various High Courts, though my reasons are different. K.P. Doctor v. State of Bombay, (S) AIR 1955 Bom 220 (FB), Surajmal v. State of M.P., AIR 1958 Madh Pra 103 (FB), Sharda Prasad v. Accountant General, (S) AIR 1955 All 496. I am further of the opinion that a declaration of law may be expressed or may be indicated by clear implication.

I am also of the opinion that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law. Any re-consideration can only be done by the Supreme Court itself. Meanwhile the High Court must follow it, though it may respectfully draw the attention of the Supreme Court for consideration on a future occasion.

In fact, it may be not only the privilege but the duty of the High Court to assist the Supreme Court in its task of clearing up the litter of conflicting decisions and introducing tidiness and uniformity of legal principles over as large a field as possible by bringing it to its notice any matter requiring re-consideration --- I say ''duty' because the number of cases agitated before the High Courts all over India is much larger than those which eventually reach the Supreme Court."

(Emphasis supplied)

Thus, this decision has laid down that a High Court cannot circumvent a declaration of law made by the Supreme Court on the ground that it amounts to a casual observation or that a particular point was not considered or raised before that Court, and re-consider the principle of law.

In Ram Manohar Lohia and others Vs. State of U.P. and others, AIR 1968 Allahabad 100, this Court held as under (paragraphs 12 and 13 of the said AIR) :

"12. It is no doubt true that in Babulal Parate's case[1961] INSC 10; , AIR 1961 SC 884 it does not appear to have been contended on behalf of the petitioners that the power conferred by Section 144 Cr. P.C. is not in the interests of things specified in clauses (2) and (3) of Article 19 of the Constitution and the section is, therefore, ultra vires, irrespective of the fact whether the restrictions it imposes are reasonable or not. But it is not possible on that basis to contend that the Supreme Court did not consider the constitutionality of the section from that point of view also. The question of the reasonableness of restrictions could arise only when the power to impose restrictions was found to be present and, therefore, the contention that the Supreme Court did not consider whether such a power really existed is unacceptable. Para 16 of the report of the judgment in that case clearly indicates that their Lordships considered the question whether the activities with regard to which the Magistrate is entitled under Section 144 Cr. P.C. to place restraint are such that their prevention would be in the interests of public order and held that they are such activities. If any doubt is still left about the scope and effect of this decision it should be dispelled by the final conclusion reached by their Lordships. That conclusion has been stated in para 34 of the report and is as follows :-

"We have, therefore, reached the conclusion that the order of the District Magistrate is not unconstitutional either because section 144 is itself violative of fundamental rights recognized in Article 19 or on the ground that it is vague and places unreasonable restrictions on those fundamental rights."

The opinion expressed in the case by their Lordships, therefore, is that section 144 Cr. P.C. does not violate Article 19 of the Constitution, and it necessarily means that such parts of the section as may have the effect of placing restrictions on the rights guaranteed under Article 19(1) (a) and (b) are respectively protected by clauses (2) and (3) of Article 19. This being the law declared by the Supreme Court it is binding on this Court under Article 141 of the Constitution and even the first ground on which the validity of section 144 has been challenged on behalf of the petitioners must accordingly be rejected.

13. The contention that such observations of the Supreme Court in the above case as cover matters beyond the reasonableness of the restrictions placed on certain fundamental rights by section 144 Cr. P. C. are obiter and, therefore, of no binding effect is wholly misconceived. A declaration of law made by the Supreme Court is not a mere precedent and the necessity of the declaration is not a condition of its binding effect. Even if such a declaration is in the nature of an obiter Article 141 of the Constitution makes it binding on all courts. But quite apart from this, it is obvious that the question whether clauses (2) and (3) of Article 19 at all permit the imposition of restrictions is logically prior to the question of the reasonableness of the restrictions, and no part of the observations of their Lordships relating to the constitutionality of section 144 Cr. P.C. was, therefore incidental or unnecessary for the decision of the case and no part of the observations can be regarded as obiter. It is a matter of no consequence that the constitutionality of section 144 Cr. P.C. was challenged in that case only on the narrow ground of the reasonableness of the restrictions placed by it and not also on the wider ground of the total absence of the power to place restrictions. A declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it. And this would be specially so when the law declared is in regard to the constitutionality of a statute or a rule, and in such a case the binding effect of the declaration cannot be measured by or limited to the points raised on behalf of the parties or to which express reference is made in the judgment. In this connection I may refer to the following cases."

(Emphasis supplied)

Thus, this decision has laid down that a declaration of law made by the Supreme Court remains a binding declaration, irrespective of the fact whether all the pros and cons of the matter to which it relates were put forward and argued before it.

In Ballabhdas Mathuradas Lakhani and others Vs. Municipal Committee, Malkapur, AIR 1970 Supreme Court 1002 (supra), their Lordships of the Supreme Court observed as under (paragraph 4 of the said AIR) :

"4. The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, 1965-3 SCR 499 = [1965] INSC 81; (AIR 1966 SC 249). That case arose under the C.P. & Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66 (1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a taxpayer. This Court held that levy of tax on cotton ginned by the taxpayer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court".

(Emphasis supplied)

Thus, this decision has laid down that a decision of the Supreme Court is binding on the High Court and the High Court cannot ignore it on the ground that relevant provisions were not brought to the notice of the Supreme Court.

In T. GOVINDARAJA MUDALIAR ETC. ETC. Vs. THE STATE OF TAMIL NADU AND OTHERS, [1973] INSC 1; (1973) 1 SCC 336 (supra), their Lordships of the Supreme Court opined as under (paragraphs 10 and 11 of the said SCC) :

"10. The argument of the appellants in that prior to the decision in Rustom Cavasjee Cooper's case (supra), it was not possible to challenge Chapter IV-A of the Act as violation of Article 19(1)(f) owing to the decision of this Court that Article 19(1)(f) could not be invoked when a case fell within Article 31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Article 19(1)(g), and clause (f) of that article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji Munji's case (supra), and other decisions which followed it were based mainly on an examination of the inter-relationship between Article 19(1)(f) and Article 31(2). There is no question of any acquisition or requisition in Chapter IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case (supra), after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Article 19(1)(f). It was, therefore, open to those effected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Article 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument. In this connection we may refer to the observations of this court in Mohd. Ayub Khan v. Commissioner of Police, Madras and another, (1965) 2 SCR 884=AIR 1965 SC 1623, according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawati and Others v. The State of Punjab and Others, 1963 (2) SCR 774 = [1962] INSC 182; AIR 1963 SC 151, a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Article 31 (2) but it would be still open to challenge under Article 19(1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :

"The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided."

11. It is common ground in the present cases that the validity of Chapter IV-A of the Act has been upheld on all previous occasions. Merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) was not expressly considered or a decision given thereon will not take away the binding effect of those decisions on us."

(Emphasis supplied)

This decision has thus laid down that if the Supreme Court gave its decision in regard to a question, and the decision has been followed in other cases then binding effect of the decision of the Supreme Court cannot be taken away on the ground that certain aspects pertaining to the said question were not brought to the notice of the Supreme Court.

As noted above, the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) has been followed by the Gujarat High Court in DLF Industries case (supra) and in Welding Rods Pvt. Ltd. case (supra), by the Andhra Pradesh High Court in D & H SECHERON ELECTRODES (P.) LTD. case (supra), and by the Delhi High Court in G.K.W. Ltd. case (supra).

In Ambika Prasad Mishra Vs. State of U.P. and others, AIR 1980 Supreme Court 1762 (supra), their Lordships of the Supreme Court held as under (paragraphs 5 and 6 of the said AIR) :

"5. .......................It is significant that even apart from the many decisions upholding Art. 31A, Golak Nath's case [1967] INSC 45; (1967) 2 SCR 762 : [1967] INSC 45; (AIR 1967 SC 1643) decided by a Bench of 11 Judges, while holding that the Constitution (First Amendment) Act exceeded the constituent power still categorically declared that the said amendment and a few other like amendments would be held good based on the doctrine of prospective overruling. The result, for our purpose, is that even Golak Nath's case has held Art. 31A valid. The note struck by later cases reversing Golak Nath does not militate against the vires of Art. 31A. Suffice it to say that in the Kesavananda Bharti's case, 1973 Supp SCR 1 : (AIR 1973 SC 1461) Art. 31A was challenged as beyond the amendatory power of Parliament and, therefore, invalid. But, after listening to the marathon erudition from eminent counsel, a 13 Judge Bench of this Court upheld the vires of Article 31A in unequivocal terms. That decision binds, on the simple score of stare decisis and the constitutional ground of Art. 141. Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. In this view, other submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to re-open what was laid down for the guidance of the nation as a solemn proposition by the epic fundamental rights case. From Kameshwear Singh, AIR 1952 SC 252 and Golak Nath (1967) through Kesavananda (1973) and Kannan Devan[1972] INSC 125; , (1973) 1 SCR 356 : [1972] INSC 125; (AIR 1972 SC 2301) to Gwalior Rayons[1973] INSC 167; , (1974) 1 SCR 671 : (AIR SC 2734) and after Art. 31A has stood judicial scrutiny although, as stated earlier, we do not base the conclusion on Article 31A. Even so, it is fundamental that the nation's Constitution is not kept in constant uncertainty by judicial review every season because it paralyses, by perennial suspense, all legislative and administrative action on vital issues deterred by the brooding threat of forensic blow-up. This, if permitted, may well be a kind of judicial destabilization of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake-up. It is surely wrong to prove Justice Roberts of the United States Supreme Court right when he said :Lonnie E. Smith v. S.E. Allwright, [1944] USSC 108; (1944) 321 US 649, 669 and 670--

"The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same class as a restricted railroad ticket good for this day and train only..............................................

It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

.............It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of our institutions."

6.It is wise to reminder that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned" (Salmond 'Jurisprudence' p. 215 (11th edition). And none of these misfortunes can be imputed to Bharti's case (AIR 1973 SC 1461) (supra )......"

(Emphasis supplied)

This decision has, therefore, laid down that the binding effect of a decision cannot be taken away or undone on the ground of every new discovery or argumentative novelty. The decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned.

In Anil Kumar Neotia and others Vs. Union of India and others, AIR 1988 Supreme Court 1353 (supra), their Lordships of the Supreme Court held as under (paragraph 18 of the said AIR) :

"18. In that view of the matter this question is no longer open for agitation by the petitioners. It is no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged. See in this connection the observations of this Court in T. Govindraja Mudaliar v. State of Tami Nadu [1973] INSC 1; (1973) 3 SCR 222 : [1973] INSC 1; (AIR 1973 SC 974), where this Court at pp. 229 and 230 of the report (SCR) : (at p. 978 of AIR) observed as follows :

"The argument of the appellants is that prior to the decision in Rustom Cavasjee Cooper's case [1970] INSC 18; (AIR 1970 SC 564) it was not possible to challenge Chapter IV-A of the Act owing to the decision of this Court that Art. 19(1)(f) could not be invoked when a case fell within Art.31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV-A proceeded on an examination of the argument whether there was infringement of Art. 19(1)(g), and Cl. (f) of that Article could not possibly be invoked. We are unable to hold that there is much substance in this argument. Bhanji, Munji and other decisions which followed it were based mainly on an examination of the inter-relationship between Art. 19(1)(f) and Art. 31(2). There is no question of any acquisition or requisition in Chap. IV-A of the Act. The relevant decision for the purpose of these cases was only the one given in Kochuni's case [1960] INSC 101; (AIR 1960 SC 1080) after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by Art. 19 (1)(f). It was, therefore, open to those affected by the provisions of Chapter IV-A to have agitated before this Court the question which is being raised now based on the guarantee embodied in Art. 19(1)(f) which was never done. It is apparently too late in the day now to pursue this line of argument, in this connection we may refer to the observations of this Court in Mohd. Ayub Khan v. Commr. of Police Madras, (1965) 2 SCR 884 : [1965] INSC 21; (AIR 1965 SC 1623) according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re-examination of the question since the decision had been followed in other cases. In Smt. Somawanti v. State of Punjab, (1963) 2 SCR 774 : [1962] INSC 182; (AIR 1963 SC 151) a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Art. 31 (2) but it would be still open to challenge under Art. 19 (1)(f), had been examined or considered. Therefore, the decision of the Court was invited in the light of that argument. This contention, however, was repelled by the following observations at page 794 :-

'The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided.' "

(Emphasis supplied)

Thus, it has been laid down in the above case that the binding effect of the decision of the Supreme Court deciding a particular question cannot be co-laterally challenged on the ground that certain points / aspects in regard to the said question were not urged before the Supreme Court. In case, a particular question has been decided by the Supreme Court in its decision then the binding effect of such a decision cannot be undone on the ground that a particular argument pertaining to the question under consideration was not considered in the said decision.

In Suganthi Suresh Kumar Vs. Jagdeeshan, (2002) 2 SCC 420 (supra), their Lordships of the Supreme Court held as under (paragraphs 9, 10 and 11 of the said SCC) :

"9. It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, [1988] INSC 120; (1988) 2 SCC 587 : [1988] INSC 120; AIR 1988 SC 1353, that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.

11. When this Court pronounced in Hari Singh v. Sukhbir Singh, [1988] INSC 242; (1988) 4 SCC 551 : [1988] INSC 242; AIR 1988 SC 2127, that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger Bench of this Court. Hence learned Single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge in Rajendran v. Jose, (2001) 3 KLT 431. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline the Single Judge of the High Court has incorrectly reversed it."

(Emphasis supplied)

The above case has thus laid down that it is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. The High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

In view of the propositions laid down in the above cases, it is evident that the binding effect of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra) cannot be taken away on the ground that certain aspects were not considered in the said decision of the Supreme Court or certain relevant provisions of the Companies Act, 1956 and / or the Companies (Court) Rules, 1959 were not considered by the Supreme Court in the said decision. The questions to be considered by the Supreme Court in Malhotra Steel Syndicate case (supra) have already been indicated above. The Supreme Court gave its decision on the said questions. The decision of the Supreme Court is binding on this Court, not-with-standing the contention of the learned counsel for the Respondent-Company that certain aspects or certain relevant provisions in regard to the said questions were not considered in the decision of the Supreme Court.

The matter may be considered from yet another angle.

Even a-part from the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position, in my opinion, still remains the same, namely, (1) The Affidavit filed in support of the Company Petition should substantially comply with the form and verification as provided in the Companies (Court) Rules, 1959; (2) Even if there is any defect in the Affidavit filed in support of the Company Petition, the same is merely an irregularity; (3) In case, there is any defect in the Affidavit filed in support of the Company Petition, opportunity should be given to the Petitioner-Company to rectify the same; (4) In case, the Affidavit, filed in support of the Winding up Petition is defective, and opportunity is given to the Petitioner-Company to file a fresh Affidavit, then such Affidavit relates back to the date of filing of the Winding up Petition.

It is true that in view of sub-section (2) of Section 441 of the Companies Act, 1956, which is relevant in the present case, the winding up of a Company by the Court shall be deemed to commence at the time of the presentation of the Petition for the winding up.

In view of this provision, it is evident that the winding up order passed by the Court relates back to the time of the presentation of the Petition for the winding up.

However, the above provision will not create any complication even if opportunity is given to the Petitioner-Company to file a fresh Affidavit, in case, the Affidavit, filed in support of the Winding up Petition, is found to be defective. The fresh Affidavit will relate back to the date of filing of the Petition. Therefore, the Winding up Petition will be deemed to have been validly presented on the date on which it was originally presented.

In view of this, as noted in the earlier part of the judgment, various complications pointed out in the decision of the Calcutta High Court in Gaya Textiles case (supra) and in the decision of the learned Single Judge of the Punjab and Haryana High Court in Mool Chand Wahi case (supra), would not arise.

The above legal position is supported by various decisions, which have been given without placing reliance on the decision of the Supreme Court in Malhotra Steel Syndicate case (supra).

In Mrs. Roma Deb and others Vs. R.C. Sood & Co. Pvt. Ltd., [1990] 67 Company Cases 350 (Delhi) (supra), the Delhi High Court held as follows (at pages 355 and 356 of the said Company Cases) :

"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, the court would do this 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. v. Ishwarbhai Somabhai Patel [1959] 29 Comp Cas 133 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" as 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 21 and Form No.3 merely stipulated an affidavit verifying the petition. I think Mr. Chopra is right in this submission of his.

It was not disputed that the court could permit amendment of the petition. As noted above, in the present case, the 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 for the original petitioner and in that case would permit such amendments of the petition as might be necessary. Under rule 102, the amended petition shall be treated as a 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 of 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 a 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 the 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 a 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, it 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 except that I would say that in case of a winding up petition, the 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 do not think there is any bar coming in my way in permitting the petitioners to file a proper affidavit verifying the petition."

(Emphasis supplied)

Thus, in MRS. ROMA DEB case (supra), the Delhi High Court has held that a defective affidavit verifying the petition for winding up cannot be treated as fatal to the petition. The principle governing the verification of a plaint, namely, that a defect in verification is only an irregularity in procedure which can be cured at any stage of the suit, can be imported for verification of a petition for winding up. However, the Court would not permit the rectification of the defect in the verification of a petition for winding up just as a matter of course, but would take into account all the relevant circumstances, including the conduct of the parties.

Where an amendment of the petition for winding up is permitted to be made for any reason, the amended petition relates back to the date of filing of the original petition. If amendment of the petition can be allowed, there is no reason as to why a defective affidavit verifying the petition could not be rectified. In the ends of justice and if the circumstances of the case so require, it is open to the Court, in its inherent powers, to allow the petitioner to present an affidavit in support of the petition in terms of Rule 21 and Form No. 3 of the Companies (Court) Rules, 1959, if the affidavit originally filed with the petition did not conform to Form No. 3.

In SUVARN RAJARAM BANDEKAR VS. RAJARAM BANDEKAR (SIRIGAO) MINES PVT. LTD., [1997] 88 Company Cases 673 (Bom.) (supra), the Bombay High Court laid down as under (at pages 681 and 682 ) :

"...........................................................................

It is true that regard being had to the rules they are undoubtedly statutory and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be ordinarily brushed aside, but then what is required to be seen is whether the petition substantially complies with the requirements and, secondly even when there is some breach or omission, whether it can be fatal to the petition.

....................................................................................

This being the position, I do not think that the application of the company can be granted on the technical grounds of strict non-compliance with the rules or form. The Calcutta High Court in Darjeeling Commercial Co. Ltd. v. Pandam Tea Co. Ltd. [1983] 54 Comp Cas 814, has correctly taken the view with due respect to the learned court that pedantic and strict adherence to the mere forms cannot be a principle on which company law has to be administered. When substantial compliance is there, more particularly when facts are clearly and substantially admitted, it can never be the basis for rejection of a petition......."

(Emphasis supplied)

Thus, in SUVARN RAJARAM BANDEKAR case (supra), the Bombay High Court has held that the Rules relating to the Affidavit and the Verification should be substantially complied with. Further, even when there is some breach or omission in complying with the Rules, it should be seen as to whether it can be fatal to the Winding up Petition.

In EMA INDIA LIMITED VS. TRACKPARTS OF INDIA LIMITED, [2001] 106 Company Cases 700 (Allahabad) (supra), a preliminary objection was raised that the Winding up Petition was not maintainable as it was contrary to Rule 21 of the Companies (Court) Rules, 1959 and Sri S.K. Nigam, who had verified the Winding up Petition, was neither a Director, Secretary or Principal Officer of the Petitioner-Company and, therefore, not competent to file the Winding up Petition. This Court rejected the preliminary objection and held as follows (at Pages 704 and 705 of the said Company Cases.):

" ............................................................

Learned counsel for the respondent-company has raised a preliminary objection regarding the maintainability of the petition on the ground that the same was not in accordance with rule 21 of the Companies (Court) Rules as Sri S.K. Nigam, who has filed the present petition on behalf of the petitioner was not competent to file the same as he is neither a director, secretary or the principal officer of the company. Along with the rejoinder affidavit, the petitioner has filed a copy of the resolution by which Sri P.K. Bhargava, the managing director of the petitioner was authorised to execute a power of attorney in favour of Sri S.K. Nigam, assistant general manager (import and export) for the purposes of filing the present company petition and to do all such acts and things as was necessary. The power of attorney executed by Sri P.K. Bhargava in favour of Sri S.K. Nigam is also on the record. Having considered the said documents and the submissions made by the parties, I am unable to hold that the present winding up petition has been filed by a person who was not authorised to do so or there has been any violation of the provisions of rule 21 of the Companies (Court) Rules. The preliminary objection, therefore, raised by learned counsel for the respondent is not tenable.

......................................................."

This decision relied upon by the learned counsel for the Petitioner-Company, is not relevant in the present case as it has not been disputed by the Respondent-Company that Santosh John, who has sworn the Affidavit in support of the Company Petition, is an authorised person.

In SAND PLAST (INDIA) LTD. V. I.T.C. BHADRACHALAM FINANCE AND INVESTMENT LTD., [2002] 111 Company Cases 471 (Rajasthan), an objection was raised that the Affidavit filed in respect of the Winding up Petition was not in conformity with the provisions of the Companies Act, 1956 and the Rules made thereunder.

A Division Bench of the Rajasthan High Court laid down as under (at pages 483 and 484 of the said Rajasthan High Court):

" .........................................Likewise, rule 21, which provides for affidavit verifying a petition states that every petition shall be verified by an affidavit made by the petitioner and in case the petition is presented by a body corporate, by a director, secretary or other principal officer thereof ; such affidavit shall be filed along with the petition and shall be in Form No.3. Whereas, in rule 18, which deals with affidavits and also prescribes procedure as to how the affidavit shall be drawn up. There is no form prescribed for the affidavits to be filed under the rules. Rule 21, which is undoubtedly statutory in nature and the forms are to be adopted wherever they are applicable. The rules relating to the affidavit and the verification cannot be brushed aside. In our opinion, the affidavit filed in the present case, complies with the requirement of rule 21. In this case, the person who filed the affidavit in the winding up petition has disclosed the source of information on the basis of which he verified that the contents of the affidavit are believed to be true.

Rule 21 requires every petition for winding up of a company to be accompanied by an affidavit verifying the petition in Form No. 3. In our view, the defect if any, in the verification is only an irregularity in procedure, which can be cured at any stage of the proceedings. It is not an incurable defect as contended by Mr. Paras Kuhad. Even if there is a defect, an amendment of the petition and the affidavit can be permitted to be filed. The court, in our opinion, can in the ends of justice and in its inherent power allow the petitioner or a party to a proceeding to present an affidavit in support of the petition in terms of rule 21 and Form No.3. This power can be exercised if the affidavit originally filed with the petition did not conform to Form No.3. In our opinion, the affidavit filed with the company petition strictly conforms to rule 21 and the form prescribed, namely, Form No. 3. On the other hand, an affidavit filed under rule 18 shall be drawn up in the first person and shall state the full name, age, occupation, etc. An affidavit which is not in the prescribed form is of no value and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law and, therefore, it is liable to be rejected. Where an affidavit is filed under rule 18, the provisions of Order 19, rule 3 must be strictly observed and an affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief and the grounds of belief must be stated with sufficient particularity to enable the court to judge whether it would be safe to act on the deponent's belief.

In our opinion, rule 18 is of no application. The reliance sought to be placed by the appellant-company on rule 18 is misconceived since it deals with the affidavit in general, whereas, rule 21 deals with the requirement of an affidavit, i.e., to be filed in support of a substantive petition as in the instant case. In view of the fact that the affidavit sworn to by Shri Vivek Mazumdar verifying the winding up petition is in the prescribed form, the objections raised by the appellant are unsustainable."

(Emphasis supplied)

The Division Bench of the Rajasthan High Court further observed as under (at pages 488 and 489 of the said Company Cases) :

"Mr. Kuhad cited the case of Mool Chand Wahi's case [1986] 60 Comp Cas 198, wherein the Punjab and Haryana High Court held that the petition for winding up is required to be accompanied by an affidavit in due form and that if an affidavit is not in due form, no value can be attached to it. The Punjab and Haryana High Court was considering rules 11 (a), 18, 21 and Form No. 3 in that case.

In the appeal preferred, the Division Bench of the same High Court held that under rules 11(a), 18, 21 of the rules, a petition for winding up is required to be accompanied by an affidavit in a proper form and an affidavit which is not in due form is not valid. This judgment is reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H).

Learned counsel then relied on the case of Malhotra Steel Syndicate's case [1989] 65 Comp Cas 546 of the Punjab and Haryana High Court, Majithia J. has doubted the principles laid down in the aforementioned decisions. In para 9, the learned single judge has observed that, sitting singly, he is bound by the judgment reported in Mool Chand Wahi's case [1986] 60 Comp Cas 402 (P & H) and that he has got serious doubts about the correctness made in the judgment. The petition is liable to be rejected on the sole ground that the affidavit accompanying petition is not verified according to law. According to the learned Judge, it was a mere irregularity and the company court could direct the petitioner to file a fresh affidavit in conformity with rule 21 of the rules and irregularity could be cured but not an illegality. Imperfect verification of the affidavit is only an irregularity and not an illegality of a type which will entail dismissal of the company petition. With respect to the learned judges of the Punjab and Haryuana High Court who rendered judgments reported in Mool Chand Wahi's case [1986] 60 Comp Cas 198 and Mool Chand Weahi's case [1986] 60 Comp Cas 402, we are unable to agree or subscribe with the proposition of law laid down by the said court. We have already held that an affidavit accompanying petition would not require compliance with rule 18 of the rules and rule 21 is the relevant rule and Form No.3 is the relevant from and no more. Another decision of the Punjab and Haryana High Court reported in Registrar of Companies, Punjab v. New Suraj Financers and Chit Fund Co. Pvt. Ltd. [1990] 69 Comp Cas 104, was cited. A learned single judge of the Punjab and Haryana High Court held (headnote):

"An affidavit which supports a company petition is treated as substantive evidence and where there is no affidavit in accordance with law accompanying the petition, it is no petition in the eye of law. Amendment of a petition for winding up, if allowed, relates back to the date of presentation of the petition. It would lead to a great deal of confusion if the petitioner were allowed to swear and supply a fresh affidavit at a later stage because rights of third parties would crop up.

Held, on the facts, that since the blanks indicating the numbers of the paragraphs in the affidavit filed in support of the petition had been left blank, it was not in accordance with law and the verification of the petition also could not be treated as being in accordance with law. The petition therefore, had to be dismissed."

For the reasons above mentioned, we are unable to agree with the proposition of law laid down by the learned single judge of the Punjab and Haryana High Court in this case."

(Emphasis supplied)

It will thus be seen that the Rajasthan High Court dissented from the view taken by the Punjab & Haryana High Court in various cases including Mool Chand Wahi case (supra) and Registrar of Companies, Punjab case (supra).

In view of the above, it is evident that independently of the decision of the Supreme Court in Malhotra Steel Syndicate case (supra), the legal position is the same as mentioned above.

In view of the aforesaid discussion, I am of the opinion that the aforementioned Company Application No. 72405 of 2004 (Paper No. A-10), filed on behalf of the Petitioner-Company, deserves to be allowed, and the same is, accordingly, allowed.

The prayer made in the said Application is granted. The Petitioner-Company is permitted to bring on record, the said Affidavit, sworn by Santosh John on 13th April, 2004, annexed as Annexure 'A' to the said Company Application (Paper No. A-10) and its supporting Affidavit, and it is directed that the said Affidavit, sworn on 13th April, 2004, will be read as being the Affidavit in support of the Company Petition.

In consequence of the above order, allowing the said Company Application (Paper No. A-10), the aforementioned Company Application No. 73312 of 2004 (Paper No. A-9) (filed on behalf of the Respondent-Company) is liable to be dismissed, and the same is, accordingly, dismissed.

Dt. 07-12-2007/ak

Company Petition No. 46 of 2002/Resd.