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Gwalior Sugar Co. Ltd., Dabra Vs. Shyam Saran Gupta and Co., Kanpur - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMadhya Pradesh High Court
Decided On
Case NumberLetter Patent Appeal No. 12 of 1967
Judge
Reported inAIR1969MP74; 1968MPLJ913
ActsComapnies Act, 1956 - Sections 243, 439 and 439(1); Companies (Court) Rules, 1959 - Rule 99
AppellantGwalior Sugar Co. Ltd., Dabra
RespondentShyam Saran Gupta and Co., Kanpur
Appellant AdvocateK.K. Dubey, Govt. Adv.
Respondent AdvocateU.S. Verma, Adv.
DispositionAppeal allowed
Cases Referred and Bisheshwar v. Parath Nath
Excerpt:
.....than those earlier specified, provided they contain fruit juices or fruit pulp. it is neither easy nor advisable to lay down any general rule for arriving at the intention of the legislature where a line of limitation must precisely be fixed. parath nath air 1934 pc 213, relied on by shri verma, are clearly..........provided by rule 24 of these rules. the advertisement shall be in form no. 48.' rule 24 is a general rule for advertisement of petition.5. the relevant portion of form no. 48 is in these words:'any creditor, contributory or other person desirous of supporting or opposing the making of an order on the said petition should send to the petitioner or his advocate notice of his intention.. 'the appellant's contention is that the words 'other person' in the above expression are omnibus. they are comprehensive enough to include any person whoever he may be.6. learned counsel for the respondent, on the other hand, urges that the words 'other person' must be restricted to those enumerated in section 439 of the companies act. in our opinion, this contention is untenable. section 439 provides.....
Judgment:

Shiv Dayal, J.

1. This appeal under Letters Patent of this Court, is from the order dated 28 July 1967 passed by Pandey, J., in Company Petition No. 7 of 1965, whereby the appellant's application for leave to intervene was rejected,

2. Shyamsaran Gupta (respondent) made an application for winding up of the company, named 'Sir J. P. Shrivastava and Sons (M.B.) Private Ltd., Dabra', (hereinafter called the 'Debtor-company'), on the ground that the company is unable to pay its debts within the meaning of Section 433(e) of the Companies Act, 1956. Under Clause (f) of that Section, a company may also be wound up, if the Court is of opinion that It is just and equitable that the company should be wound up. When the petition for winding up was advertised under Rule 99 of the Companies (Court) Rules, 1959, the Gwalior Sugar Co, Ltd., Dabra (hereinafter called the 'intervener') applied for leave to intervene, as it desired to oppose the petition. Its application was rejected on the ground that the intervener is neither a creditor, nor a contributory, nor does it come within the expression 'other person desirous of supporting or opposing the making of an order on the said petition', within Form No. 48 contained in the said Rules.

3. The appellant contended before us, as before the learned single Judge, that the debtor-company is the Managing Agent. It has a large number of fully paid up shares in the intervening company; that the debtor company has guaranteed payment of loan which the intervening company borrows from time to time from certain banks; and that the winding up of the debtor-company would enormously affect the working of the intervening company. Thus, the intervening company has substantial interest in opposing the petition for winding up.

4. There is no dispute that the only provision which enables the supporting or opposing a petition for winding up is contained in Rule 99 of the Companies (Court) Rules, 1959, read with Form No. 48.

That Rule reads thus:

'Advertisement of petition. Subject to any directions of the Court, the petition shall be advertised within the time and in the manner provided by Rule 24 of these Rules. The advertisement shall be in Form No. 48.'

Rule 24 is a general Rule for advertisement of petition.

5. The relevant portion of Form No. 48 is in these words:

'Any creditor, contributory or other person desirous of supporting or opposing the making of an order on the said petition should send to the petitioner or his advocate notice of his intention.. '

The appellant's contention is that the words 'other person' in the above expression are omnibus. They are comprehensive enough to include any person whoever he may be.

6. Learned counsel for the respondent, on the other hand, urges that the words 'other person' must be restricted to those enumerated in Section 439 of the Companies Act. In our opinion, this contention is untenable. Section 439 provides for an application for winding up. It enacts that an application to the Court for winding up of a company shall be by a petition. Those who can present such petition are enumerated. A creditor falls under Clause (b) and a contributory under Clause (c). If the intention of the words 'other person' in Form No. 48 was to limit it to the other persons specified in Section 439, then the words 'other person' were bound to be qualified by the expression 'specified in Section 439(1)'. In the absence of those words, the expression 'other person' cannot be limited to company, the Registrar and the person authorised by the Central Government in that behalf, in a case tailing under Section 243.

7. We shall now consider whether the words 'other person' must be read ejus-dem generis. The ejusdem generis rule, or the rule noscitur a sociis, is really a question of the assumed intention of the statute. Where there are general words following particular and specific words, the general words must be confined to things of the same kind as those specified (See Craies on Statute Law, 6th Edition page 179; and Maxwell on Interpretation of Statutes. 11th Edition, page 326). It is stated in Crawford on Statutory Construction (Page 326):

'If several words are connected by a copulative conjunction, a presumption arises that they are of the same class, unless, of course, a contrary intention is indicated. On the other hand, the maxim 'noscitur a sociis' is not to be applied where the meaning of the word or phrase is clear and unambiguous. Nor is it to be used so as to render general words useless. Like all other principles of construction, it is to be used only as an instrumentality for determining the intent of the legislature where it is in doubt'

Ejusdem generis rule is founded upon the idea that if the legislature intended, the general words to be used in the unrestricted sense, the particular classes would not have been mentioned. But when the language of the statute is plain, there is no uncertainty, the rule has no application.

8. For the application of the ejusdem generis rule, it is essential that the' specified words before the general words must constitute a category or genus. Mr. Justice Hidayatullah (as his Lordship then was), speaking for the court in Jagdish Chandra v. Kajaria Traders (Ind) Ltd., AIR 1964 SC 1882 laid down thus:

'It follows, therefore, that interpretation ejusdem generis or noscitur a sociis need not always be made when words showing particular classes are followed by general words. Before the general words can be so interpreted there must be a genus constituted or a category disclosed with reference to which the general words can and are intended to be restricted.'

So also in Bhanu Pratap Singh v. Asstt. Custodian E. P. Bahraich, AIR 1966 SC 245, Mr. Justice Shah, while interpreting the expression 'any other person' in Section 10(2)(n) of the Administration of Evacuee Property Act, 1950, observed thus:

'The rule of interpretation ejusdem generis applies where a general word follows particular and specific words of the same nature as itself; it has no application where there is no genus or category indicated by the Legislature... The words used in Clause (n) empowering the Custodian to pay to 'any other person', any sums of money out of the funds in his possession are not restricted to persons who are members of the family of the evacuee; they include other persons as well who are entitled to receive money from the evacuee.'

In State of Bombay v. Ali Gulshan AIR 1955 SC 810 their Lordships held that the words 'any other purpose' in Section 6(4)(a) of the Bombay Land Requisition Act (No. 23 of 1948) should not be read ejusdem generis with 'the purpose of the State'. In K.K. Kochuni v. States of Madras and Kerala AIR 1960 SC 1080 it was observed that it is not an inviolable rule of Law, but is only permissible inference in the absence of an indication to the contrary and their Lordships laid down as follows:

'It appears to us that the word 'otherwise' in the context only means 'whatever may be the origin of the receipt of maintenance'. . It is most likely that a word of the widest amplitude was used to cover even acts of charity and bounty ...' (Page 1103).

In Hamdard Dawakhana (Wakf) v. Union of India, AIR 1965 SC 1167, Gajendra-gadkar, C. J., said:

'The suggestion that this clause should be read ejusdem generis with the previous category of beverages cannot obviously be accepted, because an examination of the said beverages will disclose the fact that there is no genus by reference to which the rule of ejusdem generis can be properly invoked. Besides, the context of the clause clearly suggests that it is intended to take in all beverages other than those earlier specified, provided they contain fruit juices or fruit pulp.'

In our opinion, in the present case also, there is no genus.

9. It is the first of the principles of construction of statutes that the words should be given their plain and natural meaning. It was observed in Lilawati Bai v. Bombay State. AIR 1957 SC 521 (529) that where the context and the object and mischief of the enactment do not require restricted meaning to be attached to words of general import, the Court must give those words their plain and ordinary meaning. In Culley v. Harrison, (1956) 2 All ER 254, the expression under consideration was 'any house, room or other place which shall be opened or used for public entertainment. . , .shall be deemed a disorderly house'. The Queen's Bench Division did not accept the argument that 'place' should be construed ejusdem generis with the words preceding it. It was held that the intention of the Parliament, while employing the word 'place' was deliberate in order to give it a wider meaning than the words 'house' or 'room'.

10. The restricted meaning is rejected when there are adequate grounds to show that it has not been employed in the limited order of ideas to which the preceding words belong. Sometimes it happens that the words used in a statute are so general that they must receive some limitation. It is neither easy nor advisable to lay down any general rule for arriving at the intention of the legislature where a line of limitation must precisely be fixed. Sometimes Courts are influenced by the history, the mischief or the intention of the statute. In Nutton v. Wilson, (1889) 22 QBD 744 (748), Lindley, M. R., observed:

'We must look at the object to be attained' See also Cox v. Hakes, 1890-15 AC 506, per Lord Halsbury. It may be the requirement of the general object of the Act that the final generic word should not be restricted in meaning by the preceding words. In R. v. Edmund-son, (1859) 28 LJ MC 213 in the expression 'in any dwelling house, out-house, yard, garden, or other place', a warehouse which was a mile and a half from the dwelling house, was held to be included in the expression 'other place', although apparently a warehouse would not be considered as ejusdem generis with a dwelling house, coupled with its enumerated dependencies. If on a wider examination of the scope of the enactment it can be seen that the general words, although they follow the particular words, should be construed generally, effect must be given to the intention of the framers as gathered from the larger survey. See Rands v. Oldroyd 1959-1 QB 204, where the words 'any other matter' were construed.

11. Where a winding up petition is advertised, any person, whose interests are likely to be affected adversely by winding up order, would naturally desire to oppose the petition. And, likewise, any person whose interests are likely to be affected favourably would desire to support it. The framers of the Rule specified creditors and contributories as those who would usually be interested in supporting or opposing the petition, but there may be others whose interests are likely to be affected by a winding up order. Therefore, they employed the general words 'other persons' to enable all those who can satisfy the Court that their interests are likely to be affected one way or the other by a winding up order, to support or oppose the petition.

12. It is elementary that a person, if he so chooses, has the right to enter appearance in and oppose a proceeding the result of which may be prejudicial to his interests. On a general survey of the Companies Act, 1956, and the Companies (Court) Rules, 1959, we do not find any intention to the contrary. We would, therefore, give effect to the elementary principle of justice in the construction of the general words. It is quite clear to us that every person whose interests are likely to be affected adversely or favourably is entitled to oppose or support a petition for winding up of a company under Section 439 of the Companies Act, 1956. Such person is within the expression 'any other person' in Form No. 48, read with Rule 99 of the Companies (Court) Rules, 1959. When a creditor by petition prays for winding up of a company and that company is the Managing Agent of another company and the former is surety of the latter for huge loans and advances made by Banks, that other company has the right to intervene and oppose the winding up petition.

13. The Privy Council cases in Chajju Ram v. Neki, AIR 1922 PC 112 and Bisheshwar v. Parath Nath AIR 1934 PC 213, relied on by Shri Verma, are clearly distinguishable.

14. In the present case, the averments of the appellant-company are that the debtor-company is the Managing Agent of the appellant-company and on the guarantee furnished by it, loans of several lacs are advanced by the Banks to the appellant-company. If the debtor-company is ordered to be wound up it is patent enough that the interests of the appellant-company will be adversely affected. As to this, the learned Single Judge has merely observed that although the appellant-company 'maybe required to find another guarantor, that does not entitle it to intervene in these proceedings initiated by a creditor'. The reason stated is that in such a proceeding the only question is whether a sum of money is due to that creditor and was not paid on demand as provided by Section 434 of the Companies Act. In our opinion, the intervener cannot be shut out. It should be allowed to protect its interests. It can show that the debt claimed by the petitioning-creditor was not due or that a demand was not made, or, for any other reason, the winding up order should not be made.

15. The appeal is allowed. The orderof the learned Single Judge dated 28July 1967 is set aside. The appellant-company shall be allowed to intervene,as prayed by it. There shall be no orderfor costs.


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