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TMI Blog1959 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... perty and all the assets and liabilities of Albion Jute Mills Co. Ltd. and Lothian Jute Mills Co. Ltd., as mentioned in the scheme of amalagamation, be transferred to and do vest in New Central Mills Co. Ltd.; ( b ) that suits or other legal proceedings, if pending in this court or in any other court, by or against Albion Jute Mills Co. Ltd. and Lothian Jute Mills Co. Ltd., be continued by or against New Central Jute Mills Co. Ltd.; ( c ) that Albion Jute Mills Co. Ltd. and Lothian Jute Mills Co. Ltd. do stand dissolved without being wound up. This order was made under section 153A read with section 153 of the Indian Companies Act, 1913. On May 17, 1957, New Central Jute Mills Co. Ltd. applied for an order that its name be brought on record as plaintiff in the suit in place and stead of the Albion Jute Mills Co. Ltd., on the strength of the order dated December 6, 1955. Bose J. dismissed this application. He held that all that was purported to be transferred to the applicant was the right to sue for damages for breach of contract and nothing else and that the transfer could not take effect in view of section 6( e ) of the Transfer of Property Act and having regard to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153A(1)( c ) of the Indian Companies Act, 1913, entitles the applicant to continue the suit. On behalf of the respondents it is, however, urged that the vesting order under section 153A can transfer only those assets and properties which could be transferred by Albion Jute Mills Co. Ltd. by an act inter partes and that as Albion Jute Mills Co. Ltd. could not transfer the right to sue, having regard to section 6( e ) of the Transfer of Property Act, the transfer of the right to sue for damages is inoperative. In my opinion, even if the transfer is regarded as one directly by Albion Jute Mills Co. Ltd., it is not hit by section 6( e ) of the Transfer of Property Act. That section provides that a mere right to sue cannot be transferred. It is necessary to remember and stress the word "mere". Transfer of a bare right to sue and of nothing else is prohibited. Property with an incidental right to sue for damages may be transferred. Now, an undertaking or business as a going concern is property. A right to sue for damages for breach of contract appertaining to the business is intimately connected with the enjoyment of the business and is an important item of its assets. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra ) where the House of Lords, and particularly Lord Davey, dealt with the question whether a particular assignment was an assignment of a bare right of action for damages and held that it was not, because, as Lord Davey expressed it, the contract was clearly one which appertained to the business." In the case last cited a freehold was subject to a head-lease, an underlease and a sub-underlease. All the three leases contained onerous covenants to repair the premises. All the leases expired. At the expiration of the leases the premises were out of repair. The plaintiff took a conveyance of the fee simple of the premises together with the benefit of the covenants in the head-lease. He also obtained an assignment of the benefit of the covenant to repair, contained in the sub-underlease, and commenced an action against the defendant as assignee of the sub-underlease for breaches of the covenant. The Court of Appeal held that the assignment was valid. Bankes L.J. observed: "In my opinion Sargant J. was perfectly right when he said that the rights of action for breaches of covenant by the appellant were sufficiently connected with the enjoyment of the property to escape being bare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the appeal. The point for decision in that case was whether a contract of service previously existing between him and the transferor company automatically became a contract between him and the transferee company by virtue of the order made by the court under section 154 of the English Companies Act. The House of Lords by a majority, Lord Romer dissenting, reversed the unanimous judgment of the Court of Appeal and held that the contract of service between the appellant and the transferor company did not automatically become a contract of service between him and the transferee company. The majority of the House of Lords held that the section did not authorize the court to transfer non-assignable rights and contracts, such as contracts of service, personal contracts and other non-assignable contracts and personal rights and interests in property. Such rights and contracts could not be transferred by the liquidator in a winding up. In the absence of clear and explicit words, the procedural section ought not to be construed so as to authorize the court to confiscate rights reserved by third parties to deal and associate with the transferor company exclusively and to free the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or is that an accrued right should be enforceable after substituting one plaintiff for another in an action which in the case of a winding up a liquidator would have been entitled to continue under the Act of 1908 and, where no amalgamation has taken place, would have been entitled to continue to day." I am of the opinion that the decision in Noke's case (supra) does not support the respondents' contention that the vesting order dated the 6th December, 1935, could not and did not transfer the claim for damages. Before concluding this judgment I must observe that by sections 23( g ) and 27( d ) of the Specific Relief Act where a public company has entered into a contract and subsequently becomes amalgamated with another public company, that contract may be enforced by or against the new company which arises out of the amalgamation. It seems to me that under the Indian law the new company may, irrespective of novation, enforce contracts which were entered into by the transferor company and which are capable of being specifically enforced. For purposes of this case it is not necessary to consider whether and how far these sections affect the application of Nokes' case ( supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c ) also enacts that legal proceedings by the original company may be transferred to the amalgamated company. Such claims seem to me to have nothing in common with contractual obligations where no cause of action has arisen." On a proper reading of the speeches of the Law Lords, it will not in my opinion be reasonable to think that the majority of the Law Lords wanted to lay down a rule that unless apart from the special provisions of the statute the property could be transferred, no transfer could be effected by the vesting order. If it were necessary, I would have, as at present advised, been inclined to express agreement with the views which found favour with the six Judges in the lower courts and with Lord Romer in the House of Lords that the wide generality of the language of the section ought not to be cut down. As Sir Wilfrid Greene M. R., delivering the judgment of Court of Appeal in Nokes v. Doncaster Amalgamated Collieries Ltd. [1939] 2 KB 578, 584; 10 Comp. Cas. 33, 37 , observed : "By sub-section (4): 'In this section the expression 'property' includes property, rights and powers of every description, and the expression 'liabilities' includes duties. This lan ..... 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