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1941 (12) TMI 22 - HC - Companies Law

Issues Involved
1. Is the suit maintainable in this Court?
2. Is the decree in favor of Prahladdas Bhugwandas a nullity?
3. Is the assignment of the decree in favor of Kapoor inoperative or invalid in law?
4. Was the decree completely satisfied or adjusted before such assignment?
5. Is the substitution of Kapoor in execution proceedings invalid?
6. Is the plaintiff's claim barred by estoppel or principles analogous thereto?
7. Is the suit barred by limitation?
8. What relief, if any, is the plaintiff entitled to?

Issue-wise Detailed Analysis

1. Is the suit maintainable in this Court?
The Court held that the suit is maintainable, assuming there is a right to sue. The leave granted under clause 12, Letters Patent, to institute this suit should not be revoked. The Court has jurisdiction to entertain this suit, which seeks to set aside a decree of another Court. The presentation of the winding-up petition in this Court was part of the cause of action, justifying the jurisdiction.

2. Is the decree in favor of Prahladdas Bhugwandas a nullity?
The Court found that the decree in favor of Prahladdas Bhugwandas is not a nullity. The decree was passed in accordance with the rules of the Code of Civil Procedure prevailing in the Lahore Court, where the joint Hindu family trading firm could sue and be sued in the firm name. Therefore, the decree is valid and enforceable.

3. Is the assignment of the decree in favor of Kapoor inoperative or invalid in law?
The assignment in favor of defendant 1 (Kapoor) is operative and valid. There was no argument presented to the contrary, and thus, defendant 1 is entitled to enforce the decree assigned to him by defendant 2.

4. Was the decree completely satisfied or adjusted before such assignment?
The Court held that the decree was not satisfied or adjusted before the assignment. The plaintiff company failed to establish that the decree had been fully discharged. Payments made under the decree were only to the extent for which satisfaction was entered. The evidence provided by Mr. B.J. Madan was found to be unreliable and contradictory.

5. Is the substitution of Kapoor in execution proceedings invalid?
The substitution of defendant 1 (Kapoor) in execution proceedings was not argued as being invalid and the argument was abandoned. Therefore, no finding was necessary on this issue.

6. Is the plaintiff's claim barred by estoppel or principles analogous thereto?
While not conclusively holding, the Court was inclined to the view that the claim against defendant 1 is barred by the principles of estoppel. The plaintiff company was aware of the decree and had made payments under it. Defendant 1 took an assignment of the decree and paid consideration for it, thereby changing his position to his detriment.

7. Is the suit barred by limitation?
Given the conclusions reached on other issues, it was unnecessary for the Court to record any finding on the issue of limitation.

8. What relief, if any, is the plaintiff entitled to?
The Court concluded that the plaintiff is entitled to no relief. Consequently, the suit was dismissed with costs awarded to defendants 1 and 2. No order for costs was made against defendant 3, who did not appear or was not represented.

Conclusion
The suit was dismissed with costs awarded to defendants 1 and 2. The order staying the winding-up proceedings made on 4th March 1940 has now spent itself.

 

 

 

 

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