1954 (3) TMI 17 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction to wind up a foreign company dissolved under the laws of its home country.
2. The Crown's prerogative rights over the company's assets as bona vacantia.
3. The necessity of the company having carried on business in England to ground jurisdiction.
4. The merits of making a winding-up order for the benefit of foreign creditors.

Issue-Wise Detailed Analysis:

1. Jurisdiction to Wind Up a Foreign Company Dissolved Under the Laws of Its Home Country:
The court examined whether it had jurisdiction to wind up Azoff-Don Commercial Bank, a company established in 1871 under Russian law and dissolved by 1922 under Soviet law. The court referenced the Companies Act, 1948, particularly sections 399 and 400, which allow for the winding up of foreign companies. The court concluded that these sections do not limit the jurisdiction of the court based on the company's dissolution abroad. The court emphasized that the purpose of winding up is to collect and distribute the company's assets among its creditors, including the Crown.

2. The Crown's Prerogative Rights Over the Company's Assets as Bona Vacantia:
The Crown opposed the petition, arguing that the company's assets became vested in the Crown as bona vacantia upon its dissolution in Russia. The court examined whether the Companies Act, 1948, cut down the Crown's prerogative rights. The court cited Attorney-General v. De Keyser's Royal Hotel Ltd., which established that statutory provisions could abridge the Crown's prerogative by necessary implication. The court found that sections 353 and 354 of the Companies Act, 1948, effectively limited the Crown's prerogative, making the Crown's title to the company's assets defeasible upon the making of a winding-up order.

3. The Necessity of the Company Having Carried on Business in England to Ground Jurisdiction:
The Crown contended that the company must have carried on business in England to ground jurisdiction. The court referenced Banque des Marchands de Moscou (Koupetschesky) v. Kindersley, which held that the presence of assets and creditors in England is sufficient to ground jurisdiction, even if the company did not carry on business in England. The court concluded that it is not necessary to show that the dissolved corporation carried on business in England, provided there are assets and creditors within the jurisdiction.

4. The Merits of Making a Winding-Up Order for the Benefit of Foreign Creditors:
The Crown argued that the court should not make a winding-up order at the suit of foreign creditors and should leave the Crown to make ex gratia payments to English creditors. The court rejected this argument, stating that the object of a winding-up order is to ensure the distribution of assets among all creditors, regardless of nationality. The court emphasized that English law requires equal treatment of creditors, and it would be unfair to exclude foreign creditors whose debts are clearly established. Consequently, the court made the usual compulsory winding-up order.

Conclusion:
The court concluded that it had jurisdiction to wind up the foreign company despite its dissolution under Russian law, that the Crown's prerogative rights were limited by the Companies Act, 1948, and that the presence of assets and creditors in England was sufficient to ground jurisdiction. The court also rejected the Crown's argument to exclude foreign creditors, emphasizing the principle of equal treatment of creditors. The court thus ordered the compulsory winding up of the company.