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TMI Blog1968 (6) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... r assets comprised in the textile mill. The official liquidator after obtaining the directions of the company judge advertised the sale of the assets of the company in four newspapers, namely, the Times of India (Bombay edition), the Times of India (Ahmedabad edition), Gujarat Samachar and Sandesh, the last two being newspapers in the Gujarati language. The advertisement appeared in the Times of India, both Bombay and Ahmedabad editions, on 21st March, 1968, in Gujarat Samachar on 18th March, 1968, and in Sandesh on 20th March, 1968, and it was stated in the advertisement that offers were invited "for the purchase of the Rajratna Naranbhai Mills Ltd. (in liquidation) at Petlad for running the mill". The offers were expected to reach the official liquidator before 5-30 p.m. on 22nd April, 1968. In response to the advertisement, six offers in sealed envelopes were received by the official liquidator before the stipulated time and the sealed envelopes were opened by the company judge on 23rd April, 1968. The official liquidator thereafter made a report to the company judge and on the report the company judge made an order dated 25th April, 1968, which is impugned in the present appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . T. Shah, learned advocate appearing on behalf of the appellant, sought to give a three-fold answer to this contention. In the first place, he urged that the appellant being a creditor of the company was aggrieved by the order sanctioning the sale at such an inadequate price and as an aggrieved person he was entitled to challenge the order in appeal, even if it were held that he was not a party to the proceeding in which the order was made. He then contended, in the alternative, that the appellant was a party to the proceeding inasmuch as he appeared at the hearing of the winding-up petition as a supporting creditor and was a party to the winding-up petition and his right to prefer an appeal accordingly could not be disputed. Lastly, he said that, in any event, even if the appellant be not regarded as a party to the proceeding, the appellant was still entitled to prefer an appeal with leave of the court and he accordingly prayed for leave to file the appeal by an application made this morning. On these contentions the question which arises for consideration is whether the appellant is entitled to maintain the appeal as of right and if he is not so entitled, can he maintain the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinarily where an appeal is provided without specifying who shall be entitled to prefer the appeal, the right of appeal is exercisable only by a party to the proceeding and no person who is not a party to the proceeding can exercise the right of appeal unless leave to appeal is granted by the court. Lindley L. J. pointed out in In re Securities Insurance Company [1894] 2 Ch. 410, 413. " I understand the practice to be perfectly well settled that a person who is a party can appeal (of course within the proper time) without any leave, and that a person who without being a party is either bound by the order or is aggrieved by it, or is prejudicially affected by it, cannot appeal without leave". This principle was affirmed by a Division Bench of the Bombay High Court in Bombay Province v. Western India Automobile Association AIR 1949 Bom. 141 where Chagla C.J. observed : "But it is clear, and this fact arises from the very basis of appeals, that only a party against whom a decision is given has a right to prefer an appeal. . . .But it is recognised that a person who is not a party to the suit may prefer an appeal if he is affected by the order of the trial court, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y clear on a priori reasoning and no authority is necessary in support of it but if any authority were needed, it is to be found in In re Securities Insurance Company s case ( supra ) . There the company judge having made an order sanctioning an arrangement under the Joint Stock Companies Act, 1870, the appellants whose interests as creditors were affected by the scheme presented an appeal and the question was whether the appeal was maintainable by them. They had not opposed the scheme at the meeting of creditors nor did they appear before the judge when the sanction was applied for. Leave to appeal was applied for ex parte at the time of the filing of the appeal but it was refused. The appellants in these circumstances maintained that they were entitled to appeal as of right as they were aggrieved by the order sanctioning the scheme. The Court of Appeal held that the appellants were not parties to the proceeding in which the impugned order was made and they were therefore not entitled as of right to maintain the appeal and since leave was already refused to them, the appeal was liable to fail. Kay L.J. observed : "They had the power of being present when the judge sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had an opportunity of appearing before the company judge and opposing, if he so wished, the acceptance of the offer of the second respondent. But he did not choose to avail himself of the opportunity provided by section 457, sub-section (3). So also, he did not avail of the provision made in rule 230 of the Companies (Court) Rules, 1959. That rule provides in so many terms that, save as otherwise provided by the rules or by an order of the court, every creditor whose debt has been admitted by the official liquidator wholly or in part shall be at liberty at his own expense to attend the proceedings before the court or the official liquidator and shall be entitled upon payment of the costs occasioned thereby to have notice of all such proceedings as he shall, by request in writing addressed to the official liquidator, desire to have notice of. The appellant could have made a request in writing to the official liquidator stating that he wished to have notice of the proceeding for sanction of sale of the assets of the company. Even apart from this statutory right conferred upon him, the appellant could have requested the official liquidator to give notice to him of the date fixed for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement and the acceptance of what the appellant considered to be inadequate price offered by the second respondent. He could have without any difficulty made himself a party to the proceeding but he failed to do so and there is no reason given in the application explaining this failure. All that is stated in the application is that the appellant thought that he was a party to the proceeding since he had appeared as a supporting creditor at the winding-up petition. We will grant for the purpose of argument that the appellant entertained this belief but that does not explain why he did not take any steps to appear at the hearing of the report when the offers were considered by the company judge. It is not the case of the appellant that he was under the impression that the notice of the hearing would issue to him and it was by reason of absence of such notice that he could not remain present. The appellant just did not care to take any steps to appear before the company judge at the hearing of the report and to grant leave to appeal to the appellant in these circumstances would be to encourage inaction and want of diligence on the part of the appellant. It is true that the appellant ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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