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Pearey Lal Vs. W.K. Porter, Official Liquidator - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1914All489; 24Ind.Cas.99
AppellantPearey Lal
RespondentW.K. Porter, Official Liquidator
Excerpt:
companies act (vi of 1882), section 242 - suit against registered company dismissed after company's liquidation--effect of such dismissal--res judicata. - .....case one complication. the appellant before us had filed a regular suit claiming as against the shri baldeo mills limited the money which is also the subject of the claim before the official liquidator. this suit ended in an order of april the 30th, 1913, by which the court said that in view of the proceedings in liquidation, section 242 of the indian companies, act was a bar to the further progress of the suit. the learned subordinate judge further noted that he had received from the district judge of aligarh general instructions to dismiss all suits pending against the shri baldeo mills limited. he accordingly dismissed this suit without order as to costs. a decree followed on this order and we have to consider whether this order and decree bar the maintenance of the present claim.....
Judgment:

1. The main point raised by this appeal is that which we have to-day decided in First Appeal from Order No. 61 of 1913 See 24 Ind. Cas. 29--Ed. and that decision is in favour of the appellant. There is in this case one complication. The appellant before us had filed a regular suit claiming as against the Shri Baldeo Mills Limited the money which is also the subject of the claim before the Official Liquidator. This suit ended in an order of April the 30th, 1913, by which the Court said that in view of the proceedings in liquidation, Section 242 of the Indian Companies, Act was a bar to the further progress of the suit. The learned Subordinate Judge further noted that he had received from the District Judge of Aligarh general instructions to dismiss all suits pending against the Shri Baldeo Mills Limited. He accordingly dismissed this suit without order as to costs. A decree followed on this order and we have to consider whether this order and decree bar the maintenance of the present claim before the Official Liquidator. We have come to the conclusion that they do not. We might base this decision upon the broad ground that the order of the Subordinate Judge should take effect according to its substance and not according to its form. He obviously intended to direct that the suit in his Court should come to an end, and that the plaintiff should pursue his remedy by putting forward his claim before the Official Liquidator. His order is unhappily worded, as for instance in the reference to Section 242 of the Indian Companies Act, which has no bearing whatever on the facts before us. The District Judge, moreover, could not issue any general order to Courts subordinate to him to dismiss particular suits. What the District Judge, no doubt, intended to convey was that he did not intend to sanction (as he might have done.) the further progress of the suits instituted against the Shri Baldeo Mills Limittecl before that Company went into liquidation. The learned Subordinate Judge did not properly consider the section of the Indian Companies Act applicable to the cases before him, but he certainly did not intend to pass any order which should bar the right of creditors to press their claims before the Official Liquidator.

2. We might also rest our decision upon another ground. Apart from the special provisions of the Indian Companies Act, a suit against a Company in liquidation could not end in a valid decree binding upon that Company. Whether or not it could be laid down as a sound proposition of law that the Company as a legal entity ceased to exist when it went into liquidation, in any case the Official-Liquidator would be a necessary party to any further proceedings against such Company. The decree, therefore, which on behalf of the respondent we are asked to treat as a bar to this claim is really one which could riot have been binding upon the Shri Baldeo, Mills Limited, if the decision had been the opposite way. On these grounds we think that no distinction should be drawn against the present appellant merely because he submitted to an order dismissing his suit.

3. The result is that we allow this appeal, set aside the order of the Court below, and allow the appellant's claim. He will get his costs, which will include fees in this Court on the higher scale. The interest due to the appellant will be calculated up to the 16th of February 1910, the date on which the Shri Baldeo Mills Limited went into liquidation.


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