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TMI Blog2002 (7) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajbir Industrial Farms (Pvt.) Ltd. As it was a husband and wife company and they were to be the beneficiaries in the event of success of the enterprise, the appellant gave licence of seven acres land for development of orchard and the barracks for setting up the factory and Rosery Cottage for being used by the manager of the company who was called the administrator. Major S.C. Bugg who was the father of Smt. Inder Bir Kaur and father-in-law of the appellant was appointed as the administrator and he was to use the Rosery Cottage for his residence as the administrator. The object of the company was to develop an orchard in the said seven acres of land and to set up a canning factory in the barracks by adjusting the barracks as a factory building and installing and running machinery. It is in the balance-sheet and director's report that the factory was set up and orchard was planted and grown to maturity. There were matrimonial disputes between the husband and the wife. A winding up petition was filed by Smt. Inder Bir Kaur and the company was ordered to be wound up. The appellant, during the pendency of the winding up petition, sold the entire estate comprising the villa, Rosery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ributory (shareholder) of the company. The official liquidator had also moved an application which was registered as C.A. No. 583 of 1979 mention of which is made in the very first paragraph and the reading of the impugned order clearly indicates that this application is also decided along with C.A. No. 138 of 1975 and it is also specifically mentioned in the last paragraph of the impugned order. It appears that no appeal is filed against C.A. No. 583 of 1979. In view thereof, learned counsel for respondents Nos. 1 and 2 raised a preliminary objection by submitting that the result of not filing an appeal in the application of the official liquidator would be that some directions of the learned company judge in C.A. No. 583 of 1979 have become final and thus the present appeal would be inconsequential and the appellant would not be entitled to challenge the order even in C.A. No. 138 of 1975. There appears to be some force in this argument of Mr. P.C. Khanna, learned senior counsel appearing for respondents Nos. 1 and 2. None the less, as the appeal is filed against the same directions in C.A. No. 138 of 1975 which was admitted in the year 1981 and since we heard the matter on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exercise in the first instance, there could not be a direction to the appellant to pay the amount as contained in paras. ( a ) and ( b ). Mr. P.C. Khanna, learned senior counsel appearing for respondents Nos. 1 and 2, on the other hand, relying heavily on the reasonings given by the learned company judge in the impugned order submitted that the arguments of the appellant were contrary to record and founded on wrong and factually incorrect premise. He referred to various passages from the impugned order as well as provisions of law to buttress his submission that the directions given by the learned company judge were equitable and just as well as in accordance with law. After considering the submissions of both counsel and perusing the record, we are inclined to accept the submissions of learned senior counsel for respondents Nos. 1 and 2 and in view of this, we do not find any merit in this appeal. It may be seen in the first instance that the learned company judge has observed in the impugned order that: "In reply to the Application C.A. No. 138 of 1975 Shri Satbir Singh has admitted that he had 'promoted the company for the purpose of developing an orchard on the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned company judge observed : "It is true that the substantial part of the expenditure on the development of the orchard is capitalisation of the salaries paid from time to time including the wages of farm workers and the administrator but that, to my mind, would not make any difference. That is part of the input in the development of an orchard and the orchard in fact was developed during the years. It could not be said that no work was executed on the land. Similarly, the installation of the machinery and plant and other fittings and fixtures in the barracks is clearly brought in the balance-sheet as well as the director's report." The learned company judge had even relied upon the balance-sheet and profits and loss account in support of its finding and relevant portion of the judgment to this effect is in the following terms : "According to the balance-sheet and profit and loss account for the year 1969-70 the fixed assets of the company were valued at a little over Rs. 1 lakh and composed of Rs. 98,427 on account of plant and machinery ; Rs. 2,571 on account of electric installations and Rs. 992.72 on account of furniture and fixture." It is clear from the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany judge was entitled to cancel the contract under sections 542 and 543 of the Companies Act, as also under sections 531 and 531A of the said Companies Act. However, the learned company judge instead of cancelling the agreements of sale by Sh. Satbir Singh with the Lakhanis only directed Sh. Satbir Singh to pay compensation equivalent to the claims of the creditors, not exceeding Rs. 1,10,000 with interest at the rate of 10 per cent. from the date of winding up. The liability under section 60( b ) is of the licensor. Sh. Satbir Singh, besides being licensor was director of the company. Therefore, liability against him could be enforced instead of filing a suit under sections 542 and 543 of the Companies Act. The learned company judge had the additional power under section 531A to cancel the transaction as the company had been ordered to be wound up. The contention of the appellant to the effect that a licence is a matter of contract and there was no contract in this case as there was no licence is equally misconceived in view of the provisions of section 52 as well as section 54 of the Indian Easements Act, 1882, which are to the following effect: "52. Where one person grant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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