Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1949 (4) TMI 15

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... managing director. The company commenced its business on 1st December, 1944, and the appellant continued as its managing director until 14th June, 1947. On that date, the company went into voluntary liquidation and the second respondent who was the president of the board of directors was appointed liquidator. There were some prior proceedings relating to the winding up of this company which have been referred to in the course of the arguments but which are not very material for the purpose of the disposal of this appeal. The present application was filed by one R. Narasimha Rao under Sections 216 and 235 of the Indian Companies Act, for an enquiry against the appellant and the second respondent, that is the ex-managing director and the liquidator with reference to certain charges of misfeasance, breach of trust, malfeasance and non-feasance, particulars of which were set out more fully in the affidavit filed in support of this application. The application was resisted by the appellant and the second respondent on the ground that as the company is under voluntary liquidation and was not wound up by an order of the court, misfeasance proceeding under section 235 of the Companies Act .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... it is in this group that section 235 of the Act occurs. These supplemental provisions, it would be seen from a perusal of the sections, apply to all cases of winding up unless there is something in the subject or context to exclude the applicability of a particular section. Section 235 begins by stating, "Where in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company etc." The learned advocate for the appellant wants the court to read after the word "where" and before the words "in the course of winding up of a company". the words "the court" and in that event the section would read as "where the court in the course of winding up a company". By so reading the learned advocate wants to restrict the applicability of the section to the only case of winding up of a company by an order of court. I am, however, unable to read into the section words which are not there. The expression "in the course of winding up a company" refers to all the three modes in which a company can be wound up, and therefore the course of winding up a company might have arisen by any of the modes indicated in section 155 of the Act. Th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ion 216 of the Act. In my view, therefore, the court has ample jurisdiction to entertain the present application and the appeal therefore should be dismissed with costs of the first respondent. Viswanatha Sastri, J. The facts of the case and the relevant statutory provisions have all been stated in the judgment of my learned brother just now delivered and it is unnecessary for me to refer to them again. Mr; N. Suryanarayana, the learned counsel for the respondent, took a preliminary objection that no appeal lay against the order of Bell, J. Section 202 of the Companies Act makes an order or decision given in the matter of the winding up of a company by the court appealable in the same manner and subject to the same conditions in and subject to which appeals may be had from any order or decision of the same court in cases within its ordinary jurisdiction. The argument of Mr. Suryanarayana is that, on a proper construction of this section, no appeal would lie from an order of a single Judge of this court made for the winding up of a company unless the order appealed from is a "judgment" within the meaning of clause 15 of the Letters Patent. The contention of the learned advocate .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... order which deprived the appellant of a substantial and important right, though it might not come strictly within the definition of "judgment" in clause 15 of the Letters Patent, was yet appealable. I am unable to reconcile the different parts of the judgment in this case. Either section 202 of the Companies Act incorporates the limitation on appealability contained in clause 15 of the Letters Patent or it does not. There is no tertium quid. If the view of the Calcutta High Court in Madan Gopal Daga's case ( supra ) is to be followed, then the question arises whether the order now under appeal which merely directs an enquiry into the conduct of the director and liquidator under section 235 of the Companies Act is a judgment within the meaning of clause 15 of the Letters Patent. Having regard to the exposition of the meaning of the word "judgment" contained in the decision of this Court in Tuljaram v. Alagappa Ckettiar [1910] I.L.E. 35 Mad. 1 , it would be difficult to hold that the order in question which docs not terminate or put an end to any proceeding before the learned judge of this court is a "judgment" and therefore appealable. I, however, find that in a decisio .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ther matter being, according to the learned advocate, ejusdem generis with the previously enumerated topics. Therefore, it is argued that the present application by a shareholder for the examination of the director and the liquidator on a misfeasance application is not maintainable. I cannot agree with this contention. Having regard to the specific mention in section 216 of such wholly and dissimilar topics as enforcing calls and staying of proceedings, it would be, in my opinion, a misapplication of the doctrine of ejusdem generis to hold that the words "any other matter" following the specified categories refer only to matters similar in their nature to the enumerated topics. The enumerated topics do not belong to the same genus. The circumstance that the general words follow two specified topics of a distinct and dissimilar nature in no way derogates from the general application of the general words in the section. No case has been cited to us in which it has been held that misfeasance proceedings could not be ordered against directors and liquidators in the course of a voluntary liquidation. The decision in Muzaffar Hussain v. Hakim Rai [1947] AIR 1947 Lah. 283 relied .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates