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TMI Blog1940 (11) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... the supervision of the Court and it was supported by one dissentient director, Benarsi Das, represented by Mr. S.N. Bali. The learned Company Judge expressed the view that on liquidation of the assets of the Company the creditors would be paid in full and that even a substantial surplus may exist. Since the overriding consideration was the speedy payment of debts which, the learned Company Judge thought, was more likely to be effected by a winding up order under the supervision of the Court, he ordered the Company to be wound up by the Court. Against this order, an appeal has been presented by three of the directors who have pleaded that the voluntary liquidation should be allowed to continue. This appeal was at first opposed by the creditors of the Company as well as by the dissentient director, Benarsi Das, but adjournments were secured for compromise; and ultimately all the creditors who have appeared, have expressed themselves satisfied with the payments made by the voluntary liquidators and have agreed that the voluntary liquidation should continue. At the last bearing, a cheque for Rupees one thousand was paid before us in full settlement to Salim-ud-Din-Chiragh-ud-Din, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are there any rules of this Court governing such appeals other than the rules contained in Volume II, Chapter 1, of the High Court Rules and Orders. These are rules made by this Court under the powers conferred by section 246 of the Indian Companies Act, 1913, concerning the mode of proceedings to be had for winding up a company in the High Court, or in the Courts subordinate thereto. These rules are not specifically made applicable to appeals against winding up orders. Our attention has been invited to a Full Bench decision of this Court, Bharat Insurance Co. Ltd. v. Peoples Bank of Northern India Ltd. [1936] 6 Comp. Cas. 4; AIR 1936 Lah 322 , in which it was laid down that a company, under a winding-up order, is a necessary party. But this authority was dealing with the question of a petition for leave to appeal to the Privy Council against a winding-up order. It was then held by a majority of the Bench that an application for leave to appeal to the Privy Council from an order of winding-up of a company, is not a proceeding in winding-up as contemplated by the Rules and Orders of the High Court, but must comply with the provisions of the Rules and Orders of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our attention has been invited to an English authority cited as 24 Q.B.D. 313 ( In re Webber, Ex parte Webber ) . This was an appeal by a debtor against the receiving order and it was held by the Court of Appeal that notice of an appeal against a receiving order must in every case be served on the Official Receiver or, in other words, that the Official Receiver should be made a party. But it is clear that this authority was dealing with a rule of practice which was then introduced for the first time in the English Court of Appeal. The decision proceeded on the provisions of Order 58, Rule 2, of the Rules of the Supreme Court and on the rule of practice which had been laid down by the Divisional Court in England for such cases. No such rule of practice exists in this Court and this ruling is not, therefore, an authority for the proposition that the Official Liquidator is a necessary party in appeals against winding up orders. This authority ( In re Webber, Ex parte Webber ) was considered by Tek Chand, J., in Moti Ram Prem Chand v. Kewal Ram Dharam Chand [1928] AIR 1928 Lah 202 . After citing Order 58, Rule 2, of the Rules of the Supreme Court, and pointing out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady pointed out that although the company as such has not been impleaded as a party, the company is in fact substantially represented before us by its five directors shareholders, all of whom are parties to this appeal. The company, though in liquidation, still exists and it is clear therefore that any order that we pass on this appeal will certainly be binding on the company through its director-shareholders. It is, however, true that any order that we pass will not be binding on the Official Liquidator who is not a party, but in the circumstances of this case this fact is, in our view, immaterial. All that we are called upon to decide is whether the liquidation of the Company should proceed through the voluntary liquidators or under the control of the Court. If we accept the appeal and decide in favour of voluntary liquidation, the Official Liquidator has no further concern with the proceedings. If, however, we maintain the decision of the learned Company Judge, the Special Official Receiver as Official Liquidator would at once take custody of the assets of the company under section 178 of the Indian Companies Act, and would proceed to wind up the affairs of the Company under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the winding up of a company, contained in Chapter 1, Volume II, Rules and Orders of the High Court, should be made expressly applicable to appeals and that it should be provided therein that in the case of appeals against compulsory winding up orders, the Official Liquidator should be made a party. But for reasons already given we hold that this appeal, as framed, is competent and we proceed to deal with the case on the merits. So far as the merits are concerned, the matter has been compromised except in regard to the one recalcitrant director, Benarsi Das. The learned Company Judge in directing that the company should be compulsorily wound up had in view the speedy payment of the debts of the Company. He observed that there was no reason why the creditor-petitioners should be deprived of the right which has accrued to them of having the winding up in Court, and his decision was governed by the view expressed by the creditors that they were more likely to obtain speedy payment of their debts under a compulsory winding up, than from voluntary liquidators. We have already observed that the creditors are now all satisfied with the voluntary liquidation. From the point of vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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