M/S Sai Air Conditionong vs M/S Videocon International Ltd & ...
2012 Latest Caselaw 660 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                               Judgment Reserved on: 18.01.2012
                                Judgment Delivered on: 31.01.2012



+            CM(M) 80/2010 & CM No.18840/2011

M/S SAI AIR CONDITIONONG                              ..... Petitioner
                    Through:            Mr. Prag Chawla, Adv.

                    versus

M/S VIDEOCON INTERNATIONAL LTD & ANR. ..... Respondents
                  Through: Mr. M.L. Sharma, Adv.

             CM(M) 848/2010 & CM No.18831/2011

M/S SHRI SAI AIR CONDITIONING               ..... Petitioner
                    Through: Mr. Prag Chawla, Adv.

                    versus

M/S VIDEOCON INTERNATIONAL LTD & ANR ..... Respondents
                  Through: Mr. M.L. Sharma, Adv.


      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J.

1. Two orders have been impugned before this Court vide two

separate petitions; first order is dated 13.10.2009 and the second

order is dated 29.3.2010. Vide order dated 13.10.2009 the

application filed by the decree holder under Order VI Rule 17 of

the Code of Civil Procedure (hereinafter referred to as the Code)

(in the course of the execution proceedings) to bring on record

M/s Videocon Industries Ltd. as the judgment debtor had been

declined. Vide the second impugned order the application filed

by M/s Videocon Industries Ltd. seeking a direction from the

executing court not to issue warrants of attachment at the address

of M/s Videocon Industries Ltd. had been allowed. Both these

orders are the subject matter of the present two petitions.

2. The record shows that a suit had been filed by M/s Shri Sai

Air Conditioning against M/s Videocon International. This suit

was a suit for recovery which was decreed ex parte on 15.5.2007

as none had appeared on behalf of the defendant. An application

under Order IX Rule 13 of the Code had been filed on 02.7.2007

by M/s Videocon Industries seeking setting aside of this ex parte

decree dated 15.5.2007. Contention in this application was that

M/s Videocon International has since been amalgamated with M/s

Videocon Industries Ltd. w.e.f. 07.12.2005; M/s Videocon

International has lost its character as a separate company having

amalgamated in the M/s Videocon Industries Ltd. and as such no

suit could have been filed or was maintainable against M/s

Videocon International which was a non-existent company on the

date of the filing of the suit (suit filed in 2006); further the fact of

this amalgamation was well known to the plaintiff as a public

notice had been effected pursuant to which this scheme has been

sanctioned; contention being that no summons had been served

upon M/s Videocon Industries Ltd; ex parte decree had come to

the knowledge of M/s Videocon Industries only when the

Chairman of M/s Videocon International informed them which was

much later. The decree had been obtained by fraud. Accordingly

the prayer made in the application was that the said ex parte

decree dated 15.5.2007 be set aside.

3. The application under Order IX Rule 13 of the Code was

dismissed on 03.9.2007. Contention of the applicant therein that

M/s Videocon Industries Ltd. and M/s Videocon International Ltd.

are two separate entities was noted. Court was of the view that

M/s Videocon Industries has no locus standi to move the present

application as the ex parte decree had been passed against M/s

Videocon International Ltd. This application was dismissed on

03.9.2007; this order has since attained a finality. No appeal has

been filed against the said order.

4. Vehement arguments have been addressed on behalf of the

petitioner/plaintiff; his contention is that the factum of the

amalgamation of the two companies was brought to the

knowledge of the plaintiff only at the time when an application

under Order IX Rule 13 of the Code had been filed by M/s

Videocon Industries which was in 2007; this factum was never in

the knowledge of the plaintiff and as such the contention that the

decree has been obtained by the plaintiff against a non-existent

company is an illegality. Further contention being that it was in

these circumstances that the plaintiff/decree holder had moved an

application under Order 6 Rule 17 of the Code seeking

impleadment of M/s Videocon Industries as a necessary party but

this has been erroneously declined.

5. It is not in dispute that the ex parte decree had been

obtained against M/s Videocon International Ltd. and not M/s

Videocon Industries; even presuming that this came to be known

to the decree holder/plaintiff only on 02.7.2007 (when the

application under Order IX Rule 17 of the Code was filed), nothing

prevented the decree holder/plaintiff at that time to move an

appropriate application seeking impleadment of M/s Videocon

Industries Ltd; that was not done; the application under Order VI

Rule 17 of the Code has been filed only on 18.7.2009 after an

unexplainable delay; ex parte decree dated 15.5.2007 stood

confirmed on 02.9.2007 when the application under Order IX Rule

13 of the Code of M/s Videocon Industries had been dismissed.

Application filed under Order 6 Rule 17 of the Code on 18.07.2009

was highly belated; no explanation for the delay was also given.

6. The law is clear that once a company amalgamates with

another under a Scheme sanctioned by the court which in this

case was in the year 2005, the transferor company losses of its

existence; it becomes non-existent; it is a dead entity.

7. In MANU/DE/9011/2007 Bank Kreiss Ag. Vs. Mr. Ashok K.

Chauhan & Ors. decided on 23.10.2007 a Bench of this Court in

the context of a merger between two companies had noted that on

such a merger the transferor company losses its identity; in such a

case the transferee company could file an application under Order

22 Rule 10 of the Code which application would have to be filed

before the suit stood abated. In this case even as per the

petitioner the two companies i.e. M/s. Videocon International Ltd.

and M/s Videocon Industries stood merged on 07.12.2005; decree

had been passed in favour of the plaintiff and against M/s.

Videocon International Ltd. prior thereto i.e. on 15.05.2005. This

fact even as per the petitioner came to his knowledge on

02.03.2007 (when the application under Order 9 Rule 13 of the

Code was filed); appropriate application was not filed even at that

stage; application under Order 6 Rule 17 of the Code was filed

two years later i.e. on 18.07.2009 without any explanation for the

delay. In these circumstances the application under Order VI

Rule 17 of the Code seeking impleadment of M/s Videocon

Industries in the course of the execution proceedings was rightly

declined.

8. The judgments relied upon by the learned counsel for the

petitioner in this context reported as AIR 1964 Madras 236 C.T.A.

CT. Nachiappa Chettiar Vs. M.G.Ramaswami Pillai and 1992 3

AWC 1281 Someshwar Nath Bhargava Vs. Smt. Kusum Kumari are

misplaced. There is no dispute that an application under Order VI

Rule 17 of the Code can be preferred even at the state of

execution proceedings but the prayer has to be evaluated in the

factual context of its case. The amendments sought for in the

present proceedings were that M/s Videocon Industries Ltd. be

substituted for M/s Videocon International Ltd. against whom a

decree stood confirmed (by the dismissal of the application under

Order IX Rule 13 of the Code) on 03.9.2007; application for

amendment filed in the year 2009 by M/s. Videocon Industries

was even otherwise not the proper remedy as the parameters of

Order VI Rule 17 of the Code specify that an amendment is for the

purpose of determining real question in the dispute or

controversy which is existing between the parties; in this case

M/s Videocon Industries Ltd. was admittedly not a party. In this

scenario the application under Order VI Rule 17 of the Code was

rightly dismissed; the impugned order dated 13.10.2009 thus

calls for no interference.

9. The necessary corollary is that the second impugned order

dated 29.3.2010 also suffers from no infirmity. The decree was

against M/s Videocon International; the warrants of attachment

could not be addressed at the address of M/s Videocon Industries

Ltd. Thus this prayer of M/s Videocon Industries was rightly

allowed by the second impugned order.

10. Petitions are without any merits. Dismissed.

INDERMEET KAUR, J

JANUARY 31, 2012 nandan