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TMI Blog1983 (1) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... ankarlal Aggarwal's case [1964] 1 SCR 717 , have said that a Court of appeal cannot entertain any and every appeal in a winding up matter merely because the section provides for it. They said that the appellant must show the appellate Court that some right has been affected by the order in question. Quoting this position, Mr. Vasantha Pai raised the query: What is it that the Company has lost by this order? You do not lose any assets by counting them, he said, although by not counting them there is a chance of some assets being lost sight of. He pursued this line of argument further, thus: The Company every year prepares inventories for its balance-sheet. They are a necessary part of annual accounting. The inventory order passed by Shanmukham, J., cannot be unwelcome since it only gives the Company a picture here and now, of its assets. Nobody need have to wait for the position to emerge by the year-end to fin d out an upto date account of the assets. 4. We find Mr. Pai's contentions extremely naive. Especially that bit about the learned Judge's order being entirely to the good of the Company. It sounds a little like a School Master claiming that caning a pupil is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company got wind of the winding up petition. It stationed a lawyer in the Company Court to take notice and oppose an ex parte order. The order of Shanmukham, J. shows that Miss Bhanumathi, a member of the Bar, intervened and asked for time till the next day morning for filing an affidavit in opposition. The learned Judge, however, turned down this request and proceeded to pass the order. We are informed from the bar that it was about 4 p.m. on that day when the learned Judge passed the order. The request of Miss Bhanumathi, if granted, would have meant deferring the hearing of the application by a few hours. Not more than that. But the learned Judge proceeded on the footing that the matter did not brook even this little post ornament. It is Mr. Biksheswaran's submission that the learned Judge did not do the right thing when he hustled the interim order in this manner. 8. We are inclined to accept this criticism as legitimate. After all, the adjournment asked for was not a matter of days, but hours. The heavens were not going to fall down, as the saying goes, in between one evening and the next morning. The learned Judge acted as though there was not a moment to be lost. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning and the next morning the Company would have irretrievably altered the assets position. 10. Mr. Pai, reminded us that the order under appeal is a discretionary order passed by the learned Judge in an interlocutory application. There are certain norms, he said, which Courts of Appeal should observe while dealing with a discretionary order of a Court of first instance. He urged that we ought not to upset the order of Shanmukham, J., merely on the score that in his place we world have acted differently, given the chance. 11. This enunciation of the limit of, appellate review of discretionary orders is out of date. In the good old days it was thought that at appellate Court will not set aside discretionary orders, unless the discretion was exercised in a non-judicial way. Appellate Courts, however, no longer treat discretionary order with excessive respect.. They are just like any other orders. the appellate judges feel free to interfere with the discretion exercised by the Court below not only where it had acted non-judicially but also where it had given wrong reason. This is the trend in England, the home of the doctrine of judicial discretion (See, for example, Evans v. Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in every case which comes before it the winding-up court must order an inventory forth with as an indispensable first step, before the Court decides upon anything else. 14. Another ground relied on by the learned Judge in his order is that there are serious allegations against the Company. The learned Judge does not, however, state, even ever so briefly, what are the allegations which, in his opinion. make out a prima facie case for an urgent order of appointment of Commissioners. We have studied the winding up petition to see if the allegations therein have a bearing on the demand for an inventory of assets by Court Commissioners. Apart from a diffuse averment that those who now run the Company are attempting to sell or fritter away the Company's resources, the winding-up petition contains only two specific allegations against them. One relates to an actual transfer of a block of certain shareholdings, held by the Company as an investment, in favour of Vysya Bank in discharge of the Company's outstanding dues to the Bank. The other is about the passing of a resolution by the Board proposing the sale of a building in Madras, a building site in Coimbatore and some equit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not whether a prima facie case is made out for an interim order, but where the balance of convenience lies, as between the parties. This latter test really provides the requisite safety value to the Court's conscience, For it always behaves the Court to make sure that any interim order it is about to make is capable of being unmade at the earliest opportunity if the situation so demands, or if realization dawns on the Court that the interim order ought never to have been made in the first place. Judicial expiration of this sort can be readily available in some kinds of inter, locutory orders. Interim injunctions; for example. For today's injunction can always be vacated tomorrow, or the day after, if it is found ill a devised or rash And the party, affected can afford to ignore the brief interlude. Not so an order for taking out inventories. An order of this nature, when made, is made once and for all, even though it is called an interim order. Witness what happened in. this case. Soon after the order was made, with the warrants of commission supplied to them the Commissioners went to Coimbatore, visited the Company's various establishments, and busied themselves ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e implications he derived therefrom. According to this contention, the learned Judge was in error in passing an interim order at the stage of admission of the winding up petition. The suggestion was that an order of this kind can issue, under Section 443(1)(c) of the Act, only at the time of hearing the winding up petition, and not before. 21. A perusal of the section shows that it deals with the powers of the winding-up Court while hearing a winding-up petition. In that context, Clause (c) of Section 443(1) provides that the Court ma y, instead of dealing with' the winding up petition finally, one way or the other, prefer to make some interim order or other, and call it a day. The actual words of Section 443(1)(c) are to the effect that on hearing a winding-up petition the Court may make any interim order that it thinks fit . Mr. Biksheswaran sought to read into this provision an implied bar of the Court's jurisdiction to pass interim orders at the stage of admission of the winding up petition. 22. Learned Counsel's argument is seemingly based on the rule, 'expression unius est exclusio alterius'. What is expressed excludes what is left unexpressed. Like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction 23. We think it necessary for Courts to construe statutes, such as the Companies Act, according to the wisdom of Parliament and not according to the folly of the draftsman. Section 443(1) is a case in point. The section sets about enumerating the different ways in which, the Court can tackle a winding-up petition when it comes before it for hearing. The section, in this context, enumerates the Court's powers. But there are certain things which go without saying or ought to. Adjournment, for instance, is one of them, you cannot regard it as a remarkable aspect of judicial power. And yet, Clause (b) of Section 443(1) very seriously mentions adjournment as one of the ways in which the Court can gives disposal to the petition on the day of the hearing. This is quite an insane provision. Even without it nobody would contend and certainly not practising lawyers, that a winding-up Court has no power to a Doerun the petition, but must get on with it even at the first hearing. Nor, for that matter, would anyone argue that because of Clause (b) the Court has lost its power. to grant adjournments on other occasions. So too is the case with Clause (c) of Section 443(1) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of jurisdiction. 25. At the conclusion of his argument, Mr. Biksheswaran urged that in the event of our setting aside the order appointing Commissioners and the direction for taking inventories, we might also consider the feasibility of making an added declaration that the reports and inventories filed by the commissioners in the winding-up proceedings ought not to be treated as part of the record but must stand expunged. We do not think we should accede to the learned Counsel's request. For all that is before us in this appeal is the order of the learned Judge. We are setting aside that order. What effect our judgment holds is not a matter on which we should animadvert. As an appellate Court we can only pass an appellate order. We cannot be explaining what its consequences will be, either in law or on facts, in follow-up proceedings. 26. Having considered the order of Shanmukham, J., with the care and respect which it deserves, we are of the view that the grounds on which that order is founded are untenable. What is more, the passing of the order without affording the Company an adequate hearing cannot be justified. These defects in the order can only be cured by setti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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