Sankara Iyer V. Vanderstraaten

1916 Present: Wood Renton C.J. and De Sampayo J.

SANKARA IYER v. VANDERSTRAATEN.

445-D. C. Colombo, 43,044.

Indian Companies Act, 1882-Serving of orders on persons living outside India-Service by post office.

In the proceedings for the compulsory winding up of a Joint Stock Company incorporated under the Indian Companies Act, the District Court of Tinnevelly (India) settled the list of contributories, and ordered that the contributories (including defendant) should within four days after service of that order pay the amount of the contribution.

Held, that the posting of the order to defendant, who was living in Ceylon; was not due service of the order.

" The rules under the Indian Companies Act do not, so far as I can see, refer to the specific case of foreign shareholders, and I doubt whether, when rule 83 spoke of ' due course of delivery by the post office ' it contemplated the post office of any other country than India."

THE facts are set out in the judgment.

A. St. V. Jayawardene (with him Mahadeva), for plaintiff, appellant.

Drieberg (with him F. H. B. Koch), for defendant, respondent.

Cur. adv. vult.

December 14, 1916. DE SAMPAYO J.-

The plaintiff is the official liquidator of the Swadeshi Steam Navigation Co., Ltd., which was incorporated under the Indian Companies Act of 1882, and which is being compulsorily wound up by the District Court of Tinnevelly in India. He sues the defendant for the recovery of Rs. 431.45, being the balance principal and interest due one 15 shares which had been allotted to the defendant on his application. In the winding-up proceedings the plaintiff included the defendant in the list of contributories, of which it is admitted the defendant had notice. On the application of the plaintiff the Court on October 9, 1912, settled the list of contributories, and ordered that the contributories, including the defendant, should within four days after service of that order pay into Court or to the official liquidator the amount of their contributions. According to Company law such an order creates a new liability on the part of the shareholders, and it is not disputed that the necessary preliminary to the enforcement of the liability is notice

of the order. The defendant denies that the order was served on him, or that he had any other notice thereof. The issue in this case accordingly is whether the order of the Tinnevelly Court was duly served on the defendant. The plaintiff's case is that a copy of the order was sent by post to the defendant. This raises two questions: (1) Whether the mere posting of the order is due service, and (2) whether a copy of the order was in fact posted to the defendant as alleged.

On the first point the plaintiff depends on rule 83 of the rules under the Indian Companies Act of 1882, which is to the following effect:-

Services upon contributories and creditors shall be effected, except when personal service is required, by sending the notice or a copy of the summons or order or other proceedings through the post in a prepaid letter addressed to the attorney or vakil of the party to be served, if any, or otherwise to the party himself and such notice or copy, summons, order, or other proceeding shall be considered as served at the time the same ought to be delivered in due course of delivery by the post office, and notwithstanding the same may be returned by the post office."

Reference was also made to Article No. 188 of the Articles of Association of the Company, which also provided for service of notice through the post. But this article obviously refers" to notices required in the ordinary course of business of the Company, and has nothing to do with winding-up proceedings in Court. The plaintiff must, therefore, justify the service of the Court's order, if all, by rule 83 under the Indian Companies Act. When a person becomes a shareholder in a foreign company, he no doub

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