1952 (1) TMI 7 - HC - Companies Law

Issues Involved:
1. Maintainability of the application under section 192 of the Travancore Companies' Act.
2. Competence of the petitioners to make the application.
3. Examination of the proposed arrangement for the continuance of the company.
4. Feasibility of holding a meeting of the members of the company.
5. Consideration of the company's assets and liabilities.
6. Applicability of section 153-C of the Indian Companies Act.
7. Costs and advocate's fee.
8. Application for a certificate under Article 133 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Maintainability of the application under section 192 of the Travancore Companies' Act:
The application was made under section 192 of the Travancore Companies' Act, corresponding to section 153 of the Indian Companies Act, for holding a meeting of the members of the company to consider an arrangement concerning the continuance of the company. The court overruled the objection regarding the maintainability, stating that the application is competent.

2. Competence of the petitioners to make the application:
The petitioners included members and creditors of the company. The court held that the application could be made by any member or creditor of the company, even if it is under liquidation. The inclusion of petitioners 15 to 17, who claimed to be creditors, was deemed unnecessary as the proposed arrangement did not affect their remedies or claims.

3. Examination of the proposed arrangement for the continuance of the company:
The court examined the proposed arrangement, which included the exclusion of the 12th petitioner from holding office and a change in voting power. The court found the remedy to be ineffective and shadowy, as it did not address the fundamental issue of the majority's tyranny over the minority. The court concluded that the proposed arrangement did not deserve to be considered by a meeting of the members.

4. Feasibility of holding a meeting of the members of the company:
The court noted that the register of shareholders was incomplete and not up to date, with disputes regarding 102 out of 192 shareholders. This made it infeasible to hold a meeting of the members of the company at that time.

5. Consideration of the company's assets and liabilities:
The court discussed the company's assets, including the licence for manufacturing salt, which was set to expire in six or seven years. The court suggested that selling the assets presently would be advantageous, as the company was profitable and a sale would secure a fair price. The court also noted various claims against the company, some admitted and others disputed, emphasizing the need for asset liquidation to address these liabilities.

6. Applicability of section 153-C of the Indian Companies Act:
The court clarified that section 153-C, introduced by Amending Act LII of 1961, applies to a stage before an order for winding up is passed and does not apply to a case where such an order has already been made. The court noted that the proposed arrangement should have been presented during the winding-up proceedings.

7. Costs and advocate's fee:
The court rejected the application for ordering a meeting of the members and awarded costs, fixing the advocate's fee at Rs. 200 each for the respondent and the liquidator's advocate, to be paid out of the assets in the hands of the liquidator.

8. Application for a certificate under Article 133 of the Constitution of India:
After the judgment, the petitioners applied for a certificate under Article 133 for leave to appeal to the Supreme Court. The court was not satisfied that this was a fit case for granting such a certificate and denied the application.

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