Judgement

Appeal (No. 95 of 1928) by special leave from a decree of the High Court in its appellate jurisdiction (November 13, 1924) reversing an order of the Court in its ordinary jurisdiction (November 3, 1922).

The appeal arose out of a petition by the first four respondents and two others, who between them held 32 out of the 200 shares issued by the appellant company, for an order under s. 162 of the Indian Companies Act, 1913, that the company be wound up by the Court.

The petition was heard by Kumaraswami Sastri J. and dismissed on November 3, 1922. An appeal heard by Spencer and Devadoss JJ. on November 13, 1924, was allowed and an order winding up the company was made.

Special leave to appeal to His Majesty in Council was granted on December 2, 1926.

The material facts appear from the judgment of the Judicial Committee.

1931. Feb. 20, 23. Narasimham for the appellants. Upjohn K.C. and K. J. Rustomji for respondent No, 6, the official liquidator.

The other respondents did not appear.

July 28. The judgment of their Lordships was delivered by

LORD BLANESBURGH. This is an appeal from a judgment and decree of the High Court of Judicature at Madras, dated November 13, 1924, reversing a judgment and order dated November 3, 1922, of a single judge of the same High Court in its ordinary original civil jurisdiction. These orders were made in the matter of a petition presented to the Court on May 1, 1922, for the compulsory winding up of the appellant company. By the order of November 3, 1922, Kumaraswami Sastri J. dismissed the petition with costs. On appeal his order was discharged by that of November 13, 1924, and the compulsory winding up of the company was thereby decreed. This appeal from that order reached the Board for hearing more than six years after it had been made. Its discharge accordingly involved the supersession of all proceedings in a liquidation which as a result of it had then been in operation for more than eight years. To this fact are attributable the grave difficulties which have confronted the Board in disposing of the appeal.

The company was constituted in 1882 for the purpose (1.) of erecting a cotton-pressing factory at Raichur in Hyderabad and (2.) of erecting a sugar factory at Hospet in the Madras Presidency of British India. It was registered in Madras solely because part of its business was to be carried on in British India. But for the Hospet project it would have been registered in the Nizams Dominions. The Hospet factory did not materialize; it was definitely abandoned as a project in 1909. The company has never done any business in British India. Its sole activities have been centred at Raichur in connection with the factory which in due course was erected there. The fact that the fixed property of the company and its business have thus been in one jurisdiction and its place of incorporation and statutory obligations in another has always been a source of difficulty. It hampered the company in its competition with local rivals it exposed it to the risk of double taxation its accounts were necessarily kept at Raichur in the local vernacular, and the compilation of the annual statements at Bellary from these materials in a form to meet the requirements of the statute law of British India must always have been difficult and never quite

98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 200

satisfactory. It is unfortunate that in the liquidation no allowance appears so far to have been made for, or consideration given to, these difficulties inherent in the situation.

The company was not a private company, but its share holders were never numerous. Its articles of association were those of table A of the Act of 1882, with modifications introduced which did not affect its status as a public company. It had a nominal capital of Rs. 1,25,000, divided into 250 shares of Rs.500 each. Of these, 200 shares were issued at the time of its formation, Rs.2