Judgement
KAPUR, J. - These are four petitions asking for leave to appeal to the Supreme Court of India under Art.132, Art.133 and Art.135 of the Indian Constitution read with S.205, Government of India Act, against the judgment of this Bench dated 29th December 1949 in four petitions, Civil originals Nos.58 to 61 of 1949: (AIR(37) 1950 E.P. 188).
2. The civil miscellaneous petitions are headed as follows:
"In the matter of the petition for leave to appeal to the Supreme Court of India, under Art.132, Art.133 and Art.135 of the Constitution of India read with S.205, Government of India Act against the judgment * * * * * And
In the matter of:
Ratan Lal Chowla, Advocate,
(Voluntary Liquidator) of
"59, Lawrence Road, Amritsar - Appellant to the Supreme Court of India
John Vasica.and Another."
3. Three preliminary objections to the competency of the petition were taken by the counsel for the respondents which are: (i) The matters in controversy have been compromised between the respondents and the Company; (2) the petitioner has no right to appeal on his own behalf; and (3) the Company was a necessary party and that not having been impleaded within the period of limitation allowed the leave to appeal is not properly constituted nor is the appeal.
4. With regard to the first objection the respondents have filed an affidavit supported by certain documents. This affidavit was filed on 1st June 1950 and Mr. Chowla rightly submits that he had no chance to put in a counter-affidavit to contradict the facts stated therein. We have, therefore, not heard counsel for the respondents on the first objection.
5. In support of his second objection counsel for the respondents submitted that his petitions Civil originals Nos.58 to 61 of 1949 were directed not against Mr. Chowla but against the Company. The heading of these petitions is as follows:
"In the matter of the Indian Companies Act VII (7) of 1913.
John Vasica, 62, Marine Drive, Fort Bombay - Petitioner.
Janda Rubber Works Limited (In Voluntary Liquidation) through Lala Rattan Lal Chowla, Voluntary Liquidator, 59, Lawrence Road, Amritsar - Respondent.
Petition under S.213, S.224, S.216, Companies Act, S.151, Civil Procedure Code."
The prayer was to the following effect:
"17. It is accordingly prayed that the said orders of this Honble Court aforesaid be vacated, the Voluntary Liquidator removed and the respondent be directed to pay the petitioners costs and pending disposal of this petition further proceedings in the Voluntary Liquidation be stayed. Dated 31-10-1949."
The dispute according to this submission was with the Company and not with Mr. Chowla. At any rate, Mr. Chowla was only a Liquidator and he could not in law file an appeal in his own name. That the appeal is filed in his own name is clear from the heading of the petition as also statements in para.2 of the petition under O.12, R.3, R.6 and R.7 and O.20, R.1 of the Supreme Court Rules, 1950. Mr. Chowla states:
"That in view of the fact that the petitioner appellant is a displaced lawyer from Lahore, Pakistan, where all his immovable assets were, and he having not been able to remove most of his personal effects and law library, the Honble Chief Justice in his order dated 19th August 1949 was pleased to expressly dispense with security, and the moneys due to him already from the Companies concerned amount to over twenty thousand rupees. If any security for costs is necessary it may be dispensed with. * * * *"
In my opinion, the Liquidator himself cannot file an appeal against an order setting aside an order of winding up under the supervision of the Court or an order holding that there has been no proper and valid voluntary liquidation. In Palmers Company Law, Edn.18, at p.415 the position of the liquidator has been given in the following terms:
"A liquidator is an agent employed for the purpose of winding up the company. In some respects he is a trustee; but he is not a trustee for each individual creditor."
6. In Bank of Scotland v. Macleod, 1914 A.C. 811: (83 L.J.P.C. 250), Lord Kinnear said at p.821:
"and the doctrine of tantum at tale is in apposite, because on the liquidation of a limited company there is no transference of property to which it can be applied. The effect of the Bankruptcy Act is to divest the bankrupt, and to invest the trustee in the entire estate; and it is not surprising that questions should have arisen as to the extent to which this transference of the legal title might or might not involve a corresponding transference of all equitable qualifications which might have affected the estate in the hands of the bankrupt. But the liquidators of a limited company are not vested in the estate to the exclusion of the company. The estate remains vested in the company itself, and the liquidators are mere administrators of it for the purpose prescribed by the statute, and that is for equal distribution among creditors."
7. This being the law, in a case where the point in controversy is whether the company did or did not transfer their head office from Labors to Amritsar or whether there was or was not a proper resolution by the company for voluntary winding up or whether voluntary liquidation was validly adopted and therefore whether an application for winding up under the supervision of the Court was null and void for want of jurisdiction or not is a question in which the person really interested is the company and not the liquidator. If that is so, the liquidator has not the right to appeal on his own behalf. Buckley in his book on the Companies Acts, Edn.12, at p.168 says:
"2. In any proceeding brought to redress a wrong done to the corporation or to recover property of the corporation, or to enforce rights of the corporation, the corporation is the only proper plaintiff."
In Gray v. Lewis, (1878) 8 Ch.A. 1035 at p.1050: (29 L.T. 199), Sir W.M. James, L.J., observed:
"The bill should not have been filed by a share-holder on behalf of himself and all other share-holders. It is very important, in order to avoid oppressive litigation, to adhere to the rule laid down in
Mozley v. Alston, (1841) 1 Ph. 790 and Foss v. Harbottle, (1842) 2 Hare. 461, which cases have always been considered as settling the law of this Court, that where there is a corporate body capable of filing a bill for itself to recover property either from its directors or officers, or from any other person, that corporate body is the proper plaintiff, and the only proper plaintiff."
8. In Russell v. Wakefield Waterworks Co., (1876) 20 Eq. 474 at p.479: (44 L.J.Ch. 496), Jessel M.R., quoted with approval the observations of James, L.J., in the previous case. Lord Davy in Burland v. Earle, 1902 A.C. S3 at p. 93: (71 L.J.P.C. 1) also approved of this dictum although he gave an exception to the rule but the exception does not apply to this case. In Abdul Samad v. Municipal Committee, Delhi, 26 P.R. 1916: (AIR (3) 1916 Lah. 270), the plaintiff sued the Municipal Committee of Delhi for certain reliefs in respect of certain land sold by the Committee to certain persons which was eventually transferred to the plaintiff. The Committee pleaded that they had sold the leases as trustees of the Crown and the Secretary of State for India was then made a party to the suit. The first Court decreed the suit and from this decree the Committee alone appealed which was allowed by the Divisional Judge and a further appeal was taken to the Chief Court. It was held on the pleadings of the Committee that they had only acted as agents of the Secretary of State and the Committee was not competent to contest the appeal to the Divisional Judge when the principal had withdrawn from the contest. DeRossignol, J., said at p.73:
"The Committee did not come into Court with the plea that they were the owners of the land, on the contrary they described themselves as mere trustees or agents on behalf of Government. It is the Committee and not the plaintiff who are on the horns of a dilemma. Had they described themselves as owners of the land, the Secretary of State would have had no locus stands, but they described the Secretary of State as the real owner, and the real owner acquiesced in the decree of the first Court.
How could the mere agent contest the appeal when his principal had withdrawn from the contest?"
In the Lyallpur Bank Ltd. v.Manohar Lal, AIR (23) 1936 Lah. 152: (161 I.C. 662), it was held that the Official Receiver was merely the agent of the Court for the purposes of liquidation of the bank. The decree did not vest in him. He could not take any proceedings in execution in his own name. Section 179, Companies Act, makes it quite clear that the Official. Liquidator was not the transferee of the decree and therefore the decree could be executed by the transferee Court on his application made on behalf of the bank in liquidation and in its name.
9. The respondents counsel also relied on a passage from Mullas Civil P.C.at p.355 which says-"No person, unless he is party to the suit, is entitled to appeal under this section." The same was the opinion of the Madras High Court in Indian Bank Ltd. Madras v. Bansi Ram, 57 Mad. 670: (AIR (21) 1934 Mad. 360. Madhavan Nair, J., said:
"The right of appeal is a special creature of statute and it can be exercised only by those in whom the power is vested expressly or implied by the statute."
In reply Mr. Ratan Lal Chowla relied on the following passage from Ghoshs Indian Companies Act at p.487 under S.221, Companies Act, where the learned author relying on Mont de piote of England, (1892) W.N. 166 says:
"At the hearing of a petition for winding up under supervision the liquidator and not the company ought to appear"
and also on a passage at p.486 where the learned author says that the liquidator of a company in voluntary liquidation can apply to the Court for a supervision order and the contention is that as a result of the order of this Court by which winding up under the supervision of the Court was ordered Mr. Ratan Lal Chowla would have the right to appeal. I am unable to agree with this contention. The passage given in Ghoshs
Indian Companies Act at the most says this that when an application has to be made to the Court for the making of an order of supervision the voluntary liquidator can move it and if there is any dispute as to whether the Court should or should not make an order of supervision, the voluntary liquidator may be entitled to file the appeal. But that is not the point here. The question for decision before this Bench at the original hearing was whether the company was an Indian Company at all and therefore could by resolution passed under the
provisions of the companies act have a voluntary liquidation. If the company is not an Indian company and that is what we held, no proceedings can be taken under the
Indian Companies Act whether for a members winding up or for having that winding up continued under the supervision of the Court. The very jurisdiction of the Court would be lacking and in a case like this it would be the company alone which would be entitled to agitate the matter further. But in the present case the application made by the present respondents was against the company and the company alone was party to the proceedings though as a result of those proceedings Mr. Ratan Lal Chowla may or may not be affected. That does not give him a right to appeal in his own name.
10. Mr. Chowla next relied on S.225, Companies Act, and submitted that he had all the powers of a voluntary liquidator and therefore could appeal without leave of the Court. But that again is not relevant to the point before us. Here, as I have said before the original applications were by the respondents against the company and the liquidator in his individual capacity was no party to the proceedings. I am, therefore, of the opinion that the liquidator could not file an appeal against the judgment of the Bench. In spite of the researches which have been made no case has been brought to our notice nor do I know of anywhere a liquidator as such was allowed to appeal.
11. In a somewhat analogous case under the Bankruptcy law if a person is declared bankrupt and his appeal against this order succeeds I am very doubtful if the Official Receiver in whom the property would vest on the order of bankruptcy would be able to appeal against the order setting aside the order of bankruptcy.
12. The next objection taken was that the company had not been made a party to these proceedings and therefore neither the petition nor the appeal were properly constituted. The company was, in my opinion, a necessary party to these proceedings. Mr. Chowla in reply submitted that he had made the General Manager a party and that should be held to be sufficient compliance with the rule requiring the company to be nude a party. I am unable to agree. The original proceedings, Civil originals Nos.58 to 61, were initiated by Vasica and Brazina and in my opinion, neither of them is there on behalf of the company. On the other hand, John Vasica has been described as the General Manager and Oldrich Brazina as Chief Accountant as a mere description. That the absence of a necessary party makes the appeal and the petition incompetent is clear from the rule laid down in Rameshwar Das v. The Official Receiver Delhi. I.L.R. (1938) Lah.398: (AIR (25) 1938 Lah. 325). The petition must fail on the ground that the company which was a party to the original proceedings and is a necessary party has not been a party to these proceedings and the order has become final with regard to it.
13. Mr. Ratan Lal Chowla then prayed that he be allowed to amend the petition and to add parties. I am unable to grant this prayer because by the non-inclusion of the name of the company in the list of respondents the appeal has become barred by time and, therefore, the name cannot be added as a respondent (see Rameshwar Das v. The Official Receiver Delhi, I.L.R. (1988) Lah. 398: (AIR (25) 1938 Lab. 325) and Chokalingam Chetty v. Seethai Acha, 6 Rang. 29: (AIR (14) 1927 P.C. 252).
14. I am, therefore, of the opinion that these petitions fail and are dismissed. There will be no order as to costs.
15. KHOSLA, J. - I agree.
Petitions dismissed.