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TMI Blog1963 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... strar of Joink Stock Companies, Ramanathapuram, issued a notice to the directors why proceedings should not be taken against them for default in compliance, with the requirements of ections 76 and 131 of the Act. To this there was a reply on July 6, 1948, by the respondent and by another director of the company that as no business had been done by the company it might be struck off the register under section 247 of the Act. On January 4, 1949, a meeting of the general body of the company was, held at which it was resolved without any opposition to wind up the company. The respondent thereafter presented a petition under section 162 of the Act, O.P. No. 409 of 1949, for liquidation of the company on the ground that it was not possible to carry on business and that the general body had passed a resolution for winding up the concern. In the meantime acting on the memorandum of the directors dated July 6, 1948, the Registrar of Joint Stock Companies passed an order on July 19, 1949, striking off the company under section 247 of the Act. The appellants thereafter filed a statement in O.P. No. 409 of 1949 that as the company had been struck off and was no longer in existence the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sabapathi Press Co. Ltd. v. Sabapathi Rao. The further question for decision is, under what conditions he is entitled to present an application. Two of the earliest decisions on the subject are those of Romilly M. R. in In re Patent Artificial Stone Co. Ltd. and In re Lancashire Brick and Tile Co. Ltd. In the latter case the learned Master of the Rolls held that though a fully paid up shareholder was not disqualified from presenting a petition he must, to get an order, satisfy the court that there would be a surplus available for distribution among the shareholders. In In re Rica Gold Washing Co., it was held that "a fully paid up shareholder who presents a petition to wind up the company must both allege in his petition and show by evidence that there are assets of the company of such an amount that in the event of a winding up he would have a tangible share or surplus to receive." In In re Diamond Fuel Co., the position was thus stated by Thesiger L.J.: "I quite agree that when a fully paid up shareholder is seeking to wind up a company it is necessary for him to shew that there is likely to be some tangible surplus in the event of the company being wound up and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on which the English authorities held that a fully paid up shareholder was not entitled to maintain a petition for winding up unless there were surplus assets available for distribution, was that otherwise he had no interest in the winding up of the concern. As observed by Romilly M.R. in In re Pattnt Artificial Stone Co., "the petitioner personally has not such an interest as would entitle him to make such an application". vide also the observations of Jessel M.R. in In re Vron Colliery Co., already quoted. There is nothing, however, in the statute imposing any such limitation on the right of a contributory to present a petition for winding up. It was one evolved by the courts in the exercise of their equitable jurisdiction. But then the Legislature intervened and enacted that a winding up order should not be refused on the ground of want of assets. The, result was to abrogate what had been a rule of practice in the Courts of Chancery. No decision of the English court has been cited to us where the effect of the new provision has been considered. The decision in In re Kaslo-Slocan Mining and Financial Corporation Ltd., was no doubt subsequent to the enactment of the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory, nor is he under any obligation, as he at one time was, to satisfy the court that on a winding up there would be surplus assets." The question was considered quite recently by a Bench of the Calcutta High Court in Dayco Products Ltd. v. Kameswar Lal Sohani. In that case a petition for winding up by a fully paid up shareholder which was supported by creditors was treated virtually as a creditor's petition and ordered. On the question whether a petition was maintainable by a shareholder who does not allege and prove that there was surplus, Das Gupta J. observed that, "when a person asks for an order without any tangible interest in the result there is ordinarily good ground for thinking that the application is for ulterior purpose and not a bona fide application," and that, "the provision in law that a petition shall not be refused merely on the ground that there are no assets does not make it any the less necessary for the court to be vigilant, that the court s process is not abused." In other words want of assets would be an element in deciding whether the petition is bona fide P.N. Mukbrjee J. was of the opinion that the rule laid down by Jessel M. R. in In re Vrcn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged on behalf of the appellant is that the respondent was not entitled to maintain O.P. No. 45 of 1951 under section 247(6) of the Act. It will be remembered that it was on a memorandum dated July S, 1948, sent by the respondent and another director that the Registrar passed the order striking off the company on July 19, 1949. The contention of the appellants is that having invited the Registrar to pass the order in question the respondent cannot be heard to complain about it and that he is not a person aggrieved within the meaning of section 247(6). The decision in Harrup v. Bayley was relied on in support of this position. There the facts were that a meeting was convened of the ratepayers of a town far authorising certain expenses out of the town funds. One Harrup attended the meeting and took active part in the framing of the resolution which was ultimately passed. section 181 of the Town Improvement Act gave a right of appeal to ''any person or persons who may think himself, herself or themselves aggrieved" by any rate or order made under the Act-Under this provision Harrup filed an appeal against the resolution. An objection was taken that he was not a person aggrieved a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the matter we do not consider that this is a fit ease for interference with what is eminently a just order made by the learned Judge. The last contention of the appellants is that when once the company is struck off under section 247(5) that ceases to exist as a company thereafter and so there could in law be no petition to wind up what has no legal existence. The argument of the appellants on this question proceeded mainly on the difference in language between section 353(5) of the English Act and section 247(5) of the Indian Act. section 353(5) is as follows: "At the expiration of the time mentioned in the notice the Registrar may, unless, cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice there, of in the Gazette, and on the publication in the Gazette of this notice the company shall be dissolved: provided that ( a )the liability, if any, of every director, managing officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and ( b )nothing in this sub-section shall affect the power of the court to winding up a company the name of which has been s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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