1944 (11) TMI 10 - HC - Companies Law

Summary

Issues Involved:
1. Applicability of Section 199 of the Companies Act to determine court-fees.
2. Conflict between long-standing court practice and a recent Division Bench decision.
3. Interpretation of "order having the force of a decree" versus "order enforceable as a decree."

Issue-wise Detailed Analysis:

1. Applicability of Section 199 of the Companies Act to Determine Court-Fees:
The primary issue is whether an executable order made under the Companies Act qualifies as an "order having the force of a decree" within the meaning of Schedule 2, Article 11, of the Court-fees Act. The Full Bench was constituted to address this question due to a conflict between established court practice and a recent Division Bench decision (L.P.A. No. 116 of 1941).

Section 199 of the Companies Act states: "All orders made by a Court under this Act may be enforced in the same manner in which decrees of such Court made in any suit pending therein may be enforced." The Full Bench examined whether this provision implies that such orders have the same legal standing as decrees for the purpose of court-fees.

2. Conflict Between Long-Standing Court Practice and a Recent Division Bench Decision:
Historically, the court accepted appeals under Section 202 of the Companies Act with a fixed court-fee under Schedule 2, Article 11, of the Court-fees Act. However, in L.P.A. No. 116 of 1941, the Division Bench required an ad valorem court-fee, arguing that orders under Section 199 of the Companies Act have the force of decrees.

The Full Bench noted that the practice had not been specifically overruled by the Division Bench and found merit in resolving this apparent conflict. The Bench emphasized that the distinction between "force" and "mode of enforcement" was crucial and that Section 199 does not equate to orders having the force of decrees.

3. Interpretation of "Order Having the Force of a Decree" Versus "Order Enforceable as a Decree":
The Full Bench clarified that there is a significant difference between an order having the force of a decree and an order that may be enforced as a decree. The former stands as a decree by its own force, whereas the latter only becomes effective upon execution.

The judgment referred to the Murray Oxford Dictionary and previous legal interpretations to underscore this distinction. The court concluded that Section 199 of the Companies Act pertains to the mode of enforcement and does not confer the force of a decree on such orders.

Separate Judgments:
Sale, J.: Explained that Section 199 pertains to the procedure for enforcement and not the intrinsic nature of the order. The decision in L.P.A. No. 116 of 1941 was based on a misapprehension of the wording of Section 199. The correct interpretation is that orders under Section 199 do not have the force of a decree and should be liable to a fixed court-fee under Schedule 2, Article 11.

Khosla, J.: Agreed with the main judgment and the reasoning provided.

Marten, J.: Added that the long-standing practice might be erroneous and emphasized the need for future cases to determine whether an order intrinsically has the force of a decree to decide the appropriate court-fee.

Conclusion:
The Full Bench answered the reference in the negative, concluding that an executable order under Section 199 of the Companies Act does not have the force of a decree within the meaning of Schedule 2, Article 11, of the Court-fees Act. The case was remanded to the learned taxing Judge to determine the proper court-fee based on this interpretation.