Dr. M.K. Sharma, J.

1. By this order I propose to dispose of the applications filed by the respondent praying for recalling and/or review of the orders dated 10.4.1997 and 2.12.1997 passed by this Court in the connected Company Petition, the application filed by the respondent under Section 5 of the Limitation Act praying for condonation of delay in filing the aforesaid application praying for recalling and reviewing of the orders and also the application filed by the respondent praying for, stay of the aforesaid orders passed by this Court.

2. The petitioner filed a petition in this Court under Section 433 read with Section 434 of the Companies Act praying for winding up of the respondent- company for their inability to pay the dues of the petitioner amounting to Rs. 6,89,870.76. It was stated in the petition that the aforesaid liability of the respondent-Company as due to the petitioner was admitted and that in spite of the aforesaid admission no payment was made which clearly established that the respondent company was unable to pay its debt.

3. Notice was issued on the aforesaid petition and the matter was listed before this Court for admission of the Company Petition. By order dated 2.11.1993 this Court held that the winding up petition is not maintainable and that the remedy available with the petitioner was to file a suit provided the same is within limitation. An appeal was preferred as against the aforesaid order passed by this Court which was registered as Company Appeal No. 32/1993. The Division Bench of this Court by order dated 29.11.1995 set aside the order passed by the Company Judge on 2.11.1993 and remitted the matter back to the Company Judge again for disposal of the same in accordance with law in the light of the observations made by the Division Bench. The Division Bench, while considering the matter observed that there was an admission of the respondent of liability of dues payable to the petitioner to the extent of Rs. 6,89,870.76 and that the Company Judge should have considered the issue of applicability of the provisions of Section 433 of the Companies Act. It further observed that the view taken by the learned Company Judge that entries in books are not evidence is not correct as there was material to fix liability and that the said material is contained in the admission made by the respondent in its reply dated 22.11.1991.

4. After remission by the Division Bench the matter was listed before this Court and on 10.4.1997 the Company Petition was listed for admission before the Company Judge. However, when the matter was called none appeared on behalf of the respondent and accordingly the Company Petition was taken up in the absence of the Counsel for the respondent. On consideration of the facts and circumstances of the case the Court was satisfied that a prima facie case has been made out by the petitioner that respondent is unable to pay the debt of the petitioner and in that view of the matter the petitioner was admitted and citation was directed to be published in Delhi Gazette as also in one issue each of the Statesman (English) and Dainik Veer Arjun (Hindi). In pursuance of the aforesaid order publication of citation was done in the said two newspapers as also in Delhi Gazette and the said citations have been placed on record. The citation was published in the Statesman on 5.5.1997, in Dainik Veer Arjun on 3.5.1997 and in Delhi Gazette on 8.5.1997. After publication of the aforesaid citation the matter was placed before this Court on the next date i.e. on 12.9.1997 when an Advocate was present representing the Counsel for the respondent and in his presence the matter was directed to be re-notified for arguments on 2.12.1997 for passing final order. In terms of the aforesaid order the case was again listed on 2.12.1997 when arguments advanced by Counsel for the petitioner were heard. Incidentally none appeared on behalf of the respondent on that date. By order dated 2.12.1997 the Company Judge being satisfied that the requirements of Sections 433, 434 and 439 were satisfied in the present case, the respondent-Company was directed to be wound up and Official Liquidator attached to this Court was appointed as Liquidator of the Company. The Liquidator was directed to take over into his custody and possession, the assets and records of the respondent company immediately and necessary communication was also directed to be sent to the Registrar of Companies and notice in the prescribed form of making the order was also directed to be published in the newspapers namely Statesman and Dainik Veer Arjun. In pursuance of the aforesaid order passed by this Court publication has been done in the Statesman and in Dainik Veer Arjun on 24.1.1998.

5. Now the respondent has filed the aforesaid applications praying for recalling of the aforesaid orders dated 10.4.1997 and 12.9.1997 along with an application for condonation of delay in filing the said application as also for passing necessary orders staying the operation of the aforesaid two orders.

6. I have heard Mr. Harish Uppal, learned Counsel appearing for the applicants/respondent, the learned Counsel appearing for the petitioner as also the Official Liquidator represented by Mr. S.K. Luthra, Advocate.

7. Mr. Uppal submitted before me that the application praying for recalling and/or review of the order has been filed by the respondent under the provisions of Order 9, Rule 13, CPC. He has submitted that for negligence and non-appearance of the Counsel the respondent cannot be blamed and that the respondent cannot be made to suffer because of laches on the part of his Advocate. It was stated that the respondent paid fee to its Counsel for representing it in the case and was not aware that he had been absenting from the case. Counsel further submitted that the delay in filing the aforesaid application has also been explained as the company was never aware of the order dated 10.4.1997 and became aware of the same only on pursuing the matter on receipt of the notices from the Registrar of Companies somewhere in the end of January, 1998. In support of his aforesaid submissions the learned Counsel for the respondent relied upon the decisions of this Court in Bank of India v. Mehta Brothers and Others, reported in AIR 1991 Del. 1994; N.K. Pvt. Ltd. v. Hotz Hotels Pvt. Ltd., reported in 1974 RLR 153 [LQ/DelHC/1973/285] and the decision of the Supreme Court in Rafiq and Another v. Munshi Lal and Another, reported in 1981(3) SCR 509. Relying on the ratio of the aforesaid decisions the learned Counsel submitted that an innocent litigant after doing everything in his power to effectively participate in the proceedings by entrusting the case to his advocate, should not be made to suffer for the inaction or deliberate omission of his agent.

8. I have also heard the learned Counsel appearing for the petitioner who has vehemently contested the aforesaid applications and urged that the orders passed by this Court admitting the Company Petition and thereafter winding up the Company do not call for any interference by this Court. He also relied upon the replies filed by the petitioner to the aforesaid applications.

9. The records of the case reveal that on 21.1.1997 the Company Judge directed the Company Petition to be listed on 10.4.1997 in the presence of Counsel for both the parties. On 10.4.1997 when the Company petition was admitted by a speaking and reasoned order the Counsel for the respondent remained absent. However, on the subsequent date i.e. on 12.9.1997 the Counsel for the respondent was represented by another Counsel before the Court in whose presence the next date was notified, fixing the company petition for arguments. On 2.12.1997 the petition was taken up for final arguments and the order for winding up of the respondent company was passed. Even if it is assumed that the respondent had no knowledge of the date fixed, i.e., 10.4.1997 it cannot be believed that the respondent had no knowledge of the citation published in the two newspapers and Delhi Gazette as stated above in the first week of May, 1997. Citation in terms of the order dated 10.4.1997 was published in two newspapers and also in Delhi Gazette indicating therein that the petition has already been admitted and the same has been set down for hearing on 12.12.1997. In view of the publication of the citation in the two national newspapers it could be reasonably and logically deduced that the respondent had knowledge about the order passed on 10,4.1997 and fixing the matter for 12.9.1997 when in fact the Counsel was present representing the Counsel for the respondent. The principles decided by the decisions relied upon by the Counsel appearing for the respondent are settled law and cannot be disputed. However, on consideration of the facts and circumstances of the case it is crystal clear that the respondent itself had definite knowledge of the dates fixed in the company petition at least for 12.9.1997 as also 2.12.1997. Even in terms of the order passed on2.12.1997 the citation was published in the Statesman and Dainik Veer Arjun on 24.1.1998. In spite of the aforesaid publication the respondent/applicant did not file its present applications till 27.2.1998. In my considered opinion therefore, there was not only negligence and laches on the part of the Counsel for the respondent/applicants in appearing in the case on 10.4.1997 and 2.12.1997 but also of the respondents who in spite of knowledge of the date for 2.12.1997 did not take any positive steps for its or its Counsels appearance in the case on the aforesaid date. On passing of the order dated 2.12.1997 the order dated 10.4.1997 legally got merged with the order dated 2.12.1997. I am, therefore, satisfied that there is negligence and/or wilful inaction on the part of the respondent/ applicants also in contesting the matter and, therefore, they are not entitled to any sympathetic consideration from this Court.

10. In spite of the aforesaid position since I heard the Counsel appearing for the petitioner as also the Counsel appearing for the respondents on the merits of the case including the issue as to whether any review of the two orders is called for in the present case, I, therefore, propose to deal with, adjudicate and decide the same as well.

11. In orders dated 10.4.1997 and 2.12.1997 reference has been made to the admission of the respondent to the extent of the amount claimed in the Company petition. The respondent-Company admitted its liability to the extent of the amount claimed in the petition. The aforesaid admission was made by the respondent in its reply dated 22.11.1991 which was signed by Shri Subhash Sahni, one of the Directors of the respondent-Company. The petitioner, in support of his contention that the respondent-Company had admitted its liability examined one Shri R.C. Meena, Senior Technical Assistant, Office of the Registrar of Companies. He has deposed that notice was issued on 17.9.1991 to the respondent-Company by the Registrar of Companies in pursuance of a complaint filed by the petitioner. He also deposed that in pursuance of the said notice a reply was sent by the respondent company dated 22.11.1991 which was signed by Shri Subhash Sahni, Director of the respondent company. A photo copy of the list of the creditors as admitted by the respondents was also proved by him and marked as Ex. X-1. The Ex. X-1 gives details of the balance-sheet of the respondent-Company as on 31.3.1990 and in the list of sundry creditors attached thereto the name of the petitioner-Company appears at page 3 wherein the amount of Rs. 6,89,870.76 was shown due and payable to the petitioner. The Division Bench of this Court in Appeal No. Co. A. 32/1993 have also held that there is an admission of liability by the respondents to the extent of Rs. 6,89,870.76 which is contained in the admission made by the respondents in its reply dated 22.11.1991. On consideration of the aforesaid materials this Court came to the conclusion that the respondent is indebted to the petitioner to the aforesaid extent of Rs. 6,89,870.76 and that the said company is unable to pay its debt.

12. Counsel appearing for the respondent, however, submitted before me that the Company petition filed by the petitioner is not maintainable as his application under Order 12 Rule 6 of the Code of Civil Procedure has been dismissed in Suit No. 475/1990. He submitted that in view of the aforesaid position the discretionary relief under the Companies Act could not have been granted to the petitioner, since the petitioner is not entitled to avail two alternative remedies at the same time. He further submitted that the claim was disputed claim and there was no admission as held by this Court. He further submitted that the claim of the petitioner as raised in the Company petition is also barred by limitation and, therefore, the aforesaid orders passed by this Court are not sustainable.

13. Learned Counsel appearing for the petitioner refuted all the allegations and submitted that there is no bar to maintain botha civil suit for recovery of debt and also filing a petition in the Company Court for winding up orders as the two remedies are distinct and separate. He further submitted that the claim made by the petitioner in the present petition is within the period of limitation as there was an acknowledgement of the debt in the balance-sheet and therefore, the present petition filed by the petitioner for enforcing a liability of the company acknowledged in the balance-sheet is indisputably within time. In support of his contention the learned Counsel relied upon the decisions in State Bank of India v. Hegde and Golay Ltd., reported in 1987(62) CC 239; Central Bank of India v. Sukhani Mining and Engg. Industries Pvt. Ltd. and Others, reported in 1977 (47) CC page 1, a decision of this Court in V.K. Jain v. M/s. Richa Laboratories Pvt. Ltd., reported in 50(1993) DLT 378. [LQ/DelHC/1993/266] It is now well settled law that the remedy of recovery of money through a civil suit is distinct from that of the remedy provided for winding up of a company for non-payment of its debt under Section 434 of the Companies Act. In the winding up proceedings the final order passed is to wind up the company which is not only beneficial for the petitioner but is also beneficial to all the shareholders, creditors or contributories of the companies. The purpose of filing a recovery suit and a winding up petition are separate and distinct and, therefore, even when a civil suit for recovery of a debt is filed there is no bar for the creditors to file a petition in the Company Court for winding up of the defaulting Company. Therefore, in my considered opinion the Company Petition filed by the petitioner is maintainable.

14. The respondent in its balance-sheet for the year ending 31.3.1990 has admitted that the petitioner is one of the sundry creditors of the respondent Company and its name is shown in the list of sundry creditors in the said balance-sheet. The respondent has also admitted its liability in its reply dated 22.11.1991 whereunder it has transmitted the said balance-sheet to the Registrar of Companies. The Division Bench of this Court has also in its order dated 29.11.1995 recorded that there is an admission of liability by the respondent to the extent of Rs. 6,89,870.76 and that the said liability was acknowledged by the respondent in its reply dated 22.11.1991. In view of the aforesaid acknowledgement of debt in the balance-sheet as also in the reply sent by the respondent through one of its Directors constituting acknowledgement in writing within the meaning of Section 18 of the Limitation Act, the petition presented by the petitioner on 14.5.1992 to enforce a liability of the Company acknowledged in the balance-sheet for the year ending 31.3.1990 is indisputably within time. Reference may also be made to a decision of this Court in Larsen & Toubro Ltd. v. Commercial Electrical Works and Others, reported in 67(1997) DLT 387 wherein this Court referred to the decision reported in ILR 33 Cal. 1033 wherein it was held that a statement of accounts like balance-sheet would constitute acknowledgement of liability. The decision relied upon by the Counsel for the respondent also have taken the same view with which I respectfully agree.

15. In view of the aforesaid position I hold that the claim of the petitioner as raised in the present petition is not barred by time and the same could have been adjudicated upon by this Court. In my considered opinion the fact that the application of the petitioner under Order 6 Rule 12, CPC in the suit was dismissed, cannot debar him from seeking winding up of the respondent-Company through a Company Petition on the basis of the aforesaid admission and acknowledgement of debt made by the respondent.

16. The respondent, after the conclusion of arguments and hearing on 1.5.1998, has filed an affidavit on 4.5.1998. Since the said affidavit has been filed after conclusion of arguments, I propose not to take notice of the aforesaid affidavit. Since the respondent was neither asked for nor was given any liberty to file any such affidavit during the course of arguments nor any order in respect of the same was recorded on 1.5.1998, the said affidavit, in my considered opinion, cannot be noticed.

17. On consideration of the entire facts and circumstances of the case I am satisfied that there was an acknowledgement of debt by the respondent which the respondent has failed to pay to the petitioner and, therefore, the orders passed by this Court admitting the Company petition to hearing and finally winding up the respondent-Company are valid and justified. No ground has been made out to either recall or review any of the aforesaid orders passed by this Court and, therefore, no interference is called for. The applications stand dismissed as such.

The case be now listed before the Honble Company Judge for further orders after obtaining orders of Honble the Chief Justice.