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1951 Supreme(Mad) 58

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE P CHANDRA REDDY & THE HONOURABLE MR. JUSTICE P GOVINDA MENON
Raja of Vizianagaram - Appellant
Versus
Official Liquidator, Vizianagaram Mining Company Limited and Others - Respondent
Case No : C.M.A. Nos. 80 of 1948, 249 to 252 of 1949 and 103 of 1950
Decided On : 09 February 1951

Advocates Appeared: For

Headnote:

The court held that foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act. The court reasoned that the winding up of an unregistered company is not an ancillary proceeding to the winding up in the place of origin, and that foreign creditors are not excluded from participation in the assets of an unregistered company in liquidation. The court also held that the situs of the debt is not a relevant factor in determining whether a foreign creditor can prove their claim in liquidation proceedings.

Fact of the Case:

A company registered in England and carrying on business in India was ordered to be wound up as an unregistered company under Part IX of the Indian Companies Act. The question arose whether foreign creditors of the company were entitled to prove their claims in the liquidation proceedings.

Finding of the Court:

The court held that foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act.

Issues: Whether foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act.

Ratio Decidendi: The court reasoned that the winding up of an unregistered company is not an ancillary proceeding to the winding up in the place of origin, and that foreign creditors are not excluded from participation in the assets of an unregistered company in liquidation. The court also held that the situs of the debt is not a relevant factor in determining whether a foreign creditor can prove their claim in liquidation proceedings.

Final Decision: The court held that foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act.

Judgment :-

GOVINDA MENON J.

These appeals arise out of the winding up proceedings of the Vizianagaram Mining Co. Ltd., which had been incorporated and registered under the Companies Act then in force in England on 8th December, 1894. The main location of its business was on the Vizagapatam District of the then Presidency of Madras, where various minerals were moved by the company. Its principal place of business for the address to be given under Section 277 of the Companies Act was Kodur. In that company, the Raja of Vizianagaram was a shareholder and he had also leased out to the company the lands on which the mining was going on under three separate leases. While matters were in this state, O.P. No. 25 of 1946 was filed on the Original Side of this court by the Raja on 29th January, 1946. Thereafter, further proceedings relating to the winding up were transferred to the District Court of Visakhapatnam and the petitions out which the above appeals have arisen were taken in the said District Court. On 11th July, 1950, in Application No. 732 of 1950 the proceedings have been re-transferred to the Original Side of this court and we are informed that the Official receiver, Madras, is now in charge of the liquefaction proceedings. C.M.A. No. 80 of 1948 and C.M.A. No. 251 of 1949 go together, and the other appeals, viz., C.M.A. Nos. 249, 250 and 252 of 1949 can also be considered together

We will first of all consider the main appeal, viz., C.M.A. No. 249 of 1949. This arises out of I.A. No. 135 of 1948 in which the petitioner, the Raja of Vizianagaram, was the third creditor and the respondents 3 to 9 were the foreign creditors. The Raja of Vizianagaram applied to the lower court for an order that the proof of the foreign creditors be expunged and that their names be deleted from the certificate of the Official Receiver filed under Rule 90 of the Indian Companies Rules. The learned District Judge, on a consideration of Section 271 of the Indian Companies Act as well as the arguments addressed to him, came to the conclusion that foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act and therefore dismissed the application. C.M.A. No. 249 of 1949 is by the Raja of Vizianagaram against the order dismissing I.A. No. 135 of 1948C.M.A. No. 250 of 1949 arises out of an application by one of the foreign creditors, viz., S. A. Belge Miniers et Commerceale filed under Section 183 (5) to the Act and Rule 85 of the rules framed thereunder, praying that order of the Official Liquidator rejecting their claim be set aside and the claim be allowed in full. After setting aside the order of this creditor liquidator the extent off the learned District Judge allowed the claim of this creditor to the extent of the principle loan subsisting, viz. Pounds 9500. The Raja of Vizianagaram appeals in C.M.A. No. 250 of 1949 against the allowance by the District Judge of this claim

C.M.A. No. 252 of 1049 arises out of I.A. No. 124 of 1948 in which the petitioner was one Arthur Stanly Lindley, who applied under section 183 (5) of the Indian Companies Act against the order of the Official Liquidator rejecting his claim for a sum of Pounds 746-1-2 on the ground that it was time-barred. The learned District Judge found that the sum of Pounds 746-1-2 was included in the sum of Pounds 4, 897-7-7 mentioned in the balance sheet, Ex. P-1, and that the sum was admitted in the affidavit submitted by Mr. John Hawkins in support or the application. He therefore held that there was no bar of limitation. The Raja of Vizianagaram appeals against this order by C.M.A. No. 252 of 1949

C.M.A. No. 80 of 1948 arises out of I.A. No. 225 of 1945 by which the Raja of Vizianagaram applied for an order of certain leasehold properties, for the sale of certain machinery, etc., and for permission to levy distraint. The learned District Judge found that the Raja, as the lessor, was entitled to re-enter, that is to say, the Offi


































































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