9911796707
TMI Blog1948 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ositors. It is pertinent to note that this bank was established at Lahore, and was registered at this place but some time in July 1947, in anticipation of the partition of British India, the registered office was transferred to Delhi, and since that time for the purposes of the Indian Companies Act, the bank is an unregistered company in West Punjab. In their petition the bank stated that its business was in a flourshing condition until the partition took place when a very large majority of their clients being non-Muslims transferred their deposits from branches in Pakistan to branches in the Indian Dominion. A good deal of property belonging to the bank was however situated in Pakistan, and this was at present difficult to realize. At th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets of the bank in West Punjab were more than sufficient to pay the depositors in full, the petition also stated that the petitioner as a creditor of the bank was entitled to demand that it be wound up as a matter of right and at the close of this petition the petitioner prayed that the winding up of the bank be ordered unless his own debts were paid up in full. Thus the petition might have been regarded as a fresh petition for winding up, or in the alternative, it would assist the Court in determining whether it was just and equitable that the bank should be wound up. 4. I have heard arguments in this case on 2nd April and again on 5th April at length on the question whether the provisions of Section 153, Companies Act, are availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, for the winding up of which, provision is contained in the Companies Act. I was quite unable to accept this interpretation. The expression liable in a legal' context importing sanctions, can only be understood to mean a state of being exposed or contingently subject to such sanctions. To take a simple example from the Criminal Law the mere fact that a punishment is prescribed for a particular offence does not render every person subject to the jurisdiction of the Criminal Court liable to such punishment; it is also necessary that in relation to such person the elements of the offence for which such punishment has been prescribed should be duly satisfied. It was brought to my notice that a learned Single Judge of the Madras High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand, in their ordinary sense, I would have been inclined to hold that the effect of Section 276 is to confine the mischief of Section 153 to unregistered companies such as satisfy the condition of being wound up. This is irrespective of authority but Mr. Nazir Ahmad, appearing on behalf of the petitioning creditor Sheikh Rahmat Ullah, invited my attention to a decision of the English Court of Appeal cited as Budow v. Great Britain Mutual Life Assurance Society (1881) 44 L.T.688 in which the provision in the English Companies Act corresponding to that contained in Section 276, Companies Act was interpreted. In that case, the question at issue was whether, at a stage when no winding up order was in existence in respect of an unregistered c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to registered companies, were by the operation of Section 204 (corresponding to Section 276, Indian Companies Act) made applicable to unregistered companies as well. It is well settled that the provisions of Section 168 of the Indian Act apply equally to companies which are in process of being wound up as to companies in respect of which a petition for winding up has been instituted. Upon the view taken by the Court of Appeal in the case cited above there would seem to be no escape from the conclusion that the provisions of Section 153 of the Indian Act are available in respect of unregistered companies at a stage prior to the actual making of a winding up order. Although this decision was given in relation to the terms of the Englis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings so far taken in accordance with the provisions of Section 153, Companies Act, are competent under the law. 9. Under Sub-section (2) of that section, any compromise or arrangement arrived at in such a meeting requires, in order to be effective, that it should be sanctioned by the Court. The scheme which has been prepared is in eleven clauses and the last clause expressly authorises the Managing Director to make alterations in the scheme of arrangement, in compliance with any suggestion which the Court may, in its discretion, consider necessary for the scheme being sanctioned. I have discussed various aspects of the provisions contained in this scheme with Mr. Shiv Raj the Managing Director, who appeared in Court and with learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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