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TMI Blog1955 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government of Madras by various orders under the provisions of the Indian Tramways Act, 1886. On 11th April, 1953, the receiver appointed by the trustees for the mortgagee debenture holders of the company took possession of its undertaking and all its assets and thereafter the company ceased to carry on its business. The Government thereupon by notification dated the 29th September, 1953, declared the powers of the company conferred on it by the Indian Tramways Act and by orders and rules made under the Act as to the construction, maintenance and use of the tramways to be at an end. The two grounds alleged to justify a winding up were (1) the company had ceased to carry on business, and (2) the company was unable to pay its debts. The petitioner prayed that the company may be wound up by the court as an unregistered company under the provisions of the Indian Companies Act. The attorney who filed the petition on behalf of the company filed an affidavit stating that he was the duly constituted attorney of the company authorised to file the petition for winding up. Two of the creditors of the company supported the application by affidavits. Notice of the petition was given to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibutory but not at the instance of the company itself. Part IX of the Indian Companies Act deals with the winding up of unregistered companies. It is not disputed that the petitioner will fall within the meaning of an "unregistered company". Section 271(1) in so far as it is material for this appeal runs as follows: 271(1): Subject to the provisions of this Part, any unregistered company may be wound up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with the following exceptions and additions: ( i )an unregistered company shall, for the purpose of determining the court having jurisdiction in the matter of the winding up, be deemed to be registered in the State where its principal place of business is situate or, if it has a principal place of business situate in more than one State, then in each State, where it has a principal place of business; and the principal place of business situate in that State in which proceedings are being instituted shall, for all the purposes of the winding up, be deemed to be the registered office of the company; ( ii )no unregistered company shall be wound up under this Act v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate-General, were intended for the benefit of the creditors in India, principally Indian nationals, and not to enable a foreign company to escape from liability in case the assets within India were unable to meet its liabilities. Whether the assumption of the learned Advocate-General is correct or not I do not wish to say in this appeal. I will only say that such a situation might well arise even when a company incorporated under the Indian Companies Act has large assets outside India. It was not denied by the learned Advocate-General that section 166 will apply to the winding up of unregistered companies as well. Under that section an application to the court for the winding up of a company can be presented either by the company or by any creditor or contributory. There is nothing in section 271 or any other provision of Part IX which excepts this provision of section 166 in the case of an unregistered company. The learned Advocate-General cited to us the decisions in Russian and English Bank and Florance Montefiore Guedalla v. Baring Brothers and Co. [1936] AC 405 Re Banque des Marchands De Moscou [1954] 2 All FR 746 , and Rudow v. Great Britain Mutual Life Assurance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tramways Co. [1918] 1 Ir R 62. There the directors of a company presented a winding up petition in the name of the company. An objection was taken by some of the shareholders who opposed the petition that the petition not having been authorised by a meeting of the shareholders was incompetent. O'Connor M.R. held that the directors as such had no power to present the petition. This was because the powers of the directors were only powers of managing, and the object of management is the working of the company's undertaking, while the object of a winding up is its stoppage. Therefore the powers of the directors would not include a power to bring about the stoppage of the company's affairs without the authority of the shareholders. The learned Master of the Rolls, however, did not think it fit to dismiss the petition on this ground. In his opinion the proper course to adopt was to adjourn the hearing so as to enable the directors duly to summon a meeting of the shareholders with the object of getting authority from them to proceed on the petition, because it was open to the company to ratify the unauthorised proceeding of the directors. Though this case was decided in 1917, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of a single learned Judge of the Pepsu High Court in In re Patiala Banaspati, etc., Co. AIR 1953 Pep. 195 which certainly supports his contention but with respect I am not inclined to follow it. The argument of the learned Advocate-General that the directors only cannot put an end to the company s existence by filing a winding up petition does not appeal to me because the court is not bound to direct a winding up merely because the directors have presented a petition. The court will make a winding up order only if it is satisfied that the requirements of the law are satisfied and the facts justify the course. Moreover, it will be open to the shareholders to, oppose .the petition and to apprise-the court of the fact that the majority of the shareholders are opposed to the petition, It will be then open to the court before passing final orders to have a meeting of the shareholders convened to ascertain the wish of the majority. Article 99 of the Articles of Association of the petitioner company provides inter alia that the directors "may exercise all such powers and do all such acts and things as may be exercised or done by the company, and are not hereby or by Statut ..... 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