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TMI Blog1935 (4) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... are other creditors whose claims exceed that of the petitioning creditor. The petition is founded upon the allegation that the company has stopped payment and has ceased to carry on business, and this is not disputed. From the affidavit made at a later stage of the hearing of this petition, it appears that a winding up petition was presented against the company in England on 29th January 1935, and an official liquidator was appointed. The actual winding up order was made on 11th February, 1935, that is five days after the presentation of the present petition to this Court. From the report made by the official liquidator in England it appears that there are heavy liabilities of the company and a heavy deficit, and that the unsecured creditors in England are not likely to get even half a shilling in a pound. The company has more than forty branches in India and used to carry on extensive business in Bombay, Karachi, Madras and other places in India. The main question which is raised is as regards the jurisdiction of this Court. The material sections are Ss. 270 and 271. Section 270 is in these terms: 270. For the purposes of this Part, the expression 'unregistered company' shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Acts or under the Companies Act, 1862 or under the Companies (Consolidation) Act, 1908, or under this Act; (3) a partnership, association or company which consists of less than eight members and is not a foreign partnership, association or company; (4) a limited partnership registered in England or Northern Ireland". As observed by Palmer in his Company Precedents, Vol. 2, Edn. 14, at p. 48, the definition of "unregistered company" in this Act differs from that contained in S. 267 of the Act of 1908, especially in providing that a partnership, association or company which consists of not less than eight members is not an unregistered company unless it is a foreign partnership, association or company. Sec. 270, Companies Act, is in the same terms as Sec. 267 of the English Act of 1908. Sec. 270, I think, consists of two parts. It begins by stating what will not be included in the expression "unregistered company," and the excepted bodies are: a Railway Company incorporated by Act of Parliament or by an Act of the Governor-General in Council, or a company registered under the Companies Act, 1866, or under any Act repealed thereby, or under the Companies Act, 1882, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partnership, association or a company consisting of more than seven persons, it must mean that they refer to bodies which are unincorporated bodies but carrying on business and having no corporate existence. It was clearly necessary to include such bodies within the expression "unregistered company." If this had not been done, a partnership or association of say nineteen persons carrying on a business other than banking, or of nine persons carrying on the business of banking (see S. 4), would be able to carry on its business without the creditors being entitled to have its affairs wound up under the Act, a relief to which they would be entitled if such bodies fell within the expression "unregistered company". In my opinion, therefore, "company" in this part of the section can only mean and must mean a body which has no corporate existence, not being registered under the Act. But a foreign company is a corporate body and a legal entity, and under the law it can sue and be sued here as such. The words "shall include" in the second part of the definition will not exclude a foreign company not registered under the Act, and such a company must fall within the expression "unregistered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new section, that is S. 337 of the Act of 1929. The facts of this case are not known nor the ratio decidendi. Mr. Jinnah also relies on an obiter dictum of Scrutton, L.J. at p. 658 in Russian Commercial and Industrial Bank v Comptoir d' Escomple de Mulhouse. In that case the principal question was whether a Russian Bank which had a branch in England and was carrying on business in England had ceased to exist by reason of certain decrees and orders passed by the Russian Republic, and it was held that the Russian Bank had ceased to exist. Scrutton, L. J., after dealing with this question, observed (p. 658): "I think it very doubtful whether the effect of the Russian legislation was not that if at the time of the winding up orders there was a company at all, it was an unregistered company with less than seven shareholders, which the English Court had no jurisdiction to wind up." The case went to the House of Lords, and on the question of the effect of the Russian legislation to which Scrutton, L.J. refers, it was reversed by the House of Lords in Russian Commercial and Industrial Bank v. Comptoir d' Escomple de Mulhouse. The relevancy of the winding up order in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's incorporation cannot make any difference to the jurisdiction of this Court. In such a case the order will sometimes be restricted and the sanction of the Court will be required if further proceedings are taken, and the liquidation here will be ancillary to the Court where the company is incorporated. But in spite of its desire to assist the foreign Court, the Court here will not give up the forensic rules which govern the conduct of its own liquidation: See In re English, Scottish and Australian Chartered Bank. As this question was raised somewhat half-heartedly in the argument and it was conceded that the affidavits filed were not sufficient to enable me to reach a conclusion, I stood the petition over at the request of counsel so as to enable the parties to present their respective cases. This they have now done. In my opinion the case made out before me is sufficiently strong to enable me to hold that it is expedient that the order for winding up should go, and this is fairly conceded by Mr. Vakeel on behalf of one of the opposing creditors. But I should like to summarise briefly the position appearing from the affidavits. In the first place there are certain alleged secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot wish to go into the various other points made in the affidavits in view of the fair attitude taken by the learned counsel on behalf of the opposing creditor, and I am satisfied that it is expedient and in the interests of all parties concerned that the winding up order should go. The question then remains as to the exact form in which the order should be made. As I have stated, the winding up here must be to a great extent ancillary to the work of liquidation which is carried on by virtue of the order made by the English Court. Mr. Desai on behalf of the petitioning creditor has referred to a case in In re Commercial Bank of South Australia which deals with this question, and following that precedent, I think the order in this case must be to some extent of the same character. The winding up order will, therefore, be made on the petition presented on 6th February 1935, and I appoint the Official Liquidator liquidator of this company and direct him not to act without the special directions of the Judge in Chambers except for the purpose of getting in Indian assets and setting the list of of creditors in India, and advertising the order and the appointment of the Official Liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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