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Dhobei Charan Sahu Vs. Official Liquidator of Sri Jagannath Industries Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtOrissa High Court
Decided On
Case NumberA.H.O. No. 13 of 1960
Judge
Reported inAIR1963Ori220
ActsCompanies Act, 1956 - Sections 483, 528, 643(1) and 643(2); Companies (Court) Rules, 1959 - Rule 6; Orissa High Court Order, 1948 - Rule 2; Contract Act, 1872 - Sections 70; Limitation Act, 1908 - Schedule - Article 102
AppellantDhobei Charan Sahu
RespondentOfficial Liquidator of Sri Jagannath Industries Ltd. and ors.
Appellant AdvocateS.K. Ray, Adv.
Respondent AdvocateH.G. Panda and ;Ranjit Mohanty, Advs.
DispositionAppeal dismissed
Cases ReferredIn State of West Bengal v. B.K. Mondal and Sons
Excerpt:
.....must subsist, for that is the implication of the use of the word 'lawfully' in section 70 :but the said lawful relationship arises not because the party claiming compensation has done something for the party against whom compensation is claimed, but because what has been done by the former has been accepted and enjoyed by the latter. the learned company judge delivered judgment on 1-8-1960 and the appeal was filed on 30-10-60. clearly the appeal was filed beyond 30 days but within 90 days. ..shall be presented tothe registrar within 30 days from the date of the judgment appealed from, unless a bench, in its discretion, on good cause shown, shall grant further time. .this appeal had been filed under this rule and the period of limitation is clearly 30 days......1948, vol. i. rule 2(a) so far as it is relevant is as follows :'subject to article 12 of the orissa high court order, 1948 every appeal to the high court under article 4 .thereof read with clause 10 of the letters patent constituting the high court of judicature at patna from the judgment .....one judge of the high court.....shall be presented tothe registrar within 30 days from the date of the judgment appealed from, unless a bench, in its discretion, on good cause shown, shall grant further time. .....'this appeal had been filed under this rule and the period of limitation is clearly 30 days. clause 10 of the letters patent makes provision for suth appeal. mr. ray, however, relies on article 4 of the orissa high court order, 1948 which runs as follows :--'the high court of orissa.....
Judgment:

Misra, J.

1. The appellant and Lala Nagendrg Kumar Roy constituted the Managing Agency Firm, called the Bhubaneshwar Traders, to the Company Sri Jagannath Industries Limited (in liquidation), hereinafter to be referred to as the Company. On 30th October, 1958, the appellant filed a claim on two counts (i) Rs. 2226/9/- towards a portion of his monthly remuneration from 1st October 1949 till 31st October 1954; and (ii) Rs. 1400/- outstanding from the loans advanced by him on different dates.

2. His claim was disallowed by the learned Company judge on the following findings :--

(I) 'Records shows that the Company did not workexcept casually for about 3/4 (3 or 4) months in 1951on some road contract which, however, does not appearto be included in any of the objects, for which the company was established. xxxxxHaving regard to the state of the Company which had notyot started work with any of the objects for which itwas established and the fact that neither of the ManagingAgents ever claimed any remuneration, I am satisfied tnat

the present claim for remuneration by the said two tx-Managing Agents of the Company is only an afterthought :

and

(II) Rs. 1400/- was still outstanding against the Company from the loans advanced by the appellant. The appellant had however, no express or implied authority to incur loans on behalf of the Company.

Against the Judgment of the learned Company Judge, date 1st August 1960 disallowing the claim of the appellant this appeal has been filed.

3. Mr. Ray Challenged the findings as untenable on facts and in law. Mr. Panda urged that the appeal itseit was barred by limitation.

4. Article 53 of the Articles of Association of the Company is as follows :--

'The Managing agents shall be entitled to receive the following remuneration :--

A Commission of 20 per cent on the net profits of the Company with a minimum allowance of Rs. 3600/- per year. The Managing Agents have agreed to forgo one third allowance for the first year and shall not charge remuneration as long as the company will not start work.

x x x x x

The Company was incorporated on 23rd July 1948, me claim for remuneration was on the basis of Article 53 of the Articles of Association. The learned Company Judge rejected this claim on the finding that though the company did work casually for about 3 or 4 months in 1951 on some Road contract, the work does not come within any of the objects for which the company was established.

This is an error of record. Article 3 (xxiii) of the Memorandum of Association of the Company is as follows :

'3. The object for which the Company is established are all or any of the following (and construing the following sub-clauses the scope of no one of such sub-clauses shall be deemed to limit or effect the scope of any other ot such sub-clauses).

(xxiii) To carry on the business of importers, agents, factors, Traders, Mill-owners, merchants, contractors, commission Agents and representatives.'

The object of the Company was clearly to do contract work. If the Company started doing contract work, even though casually, it cannot be said it was not within the object of the Company. Mr. Panda for the Official Liquidator concedes that he cannot support the finding. Mr. Panda, however, urges that this claim for remuneration is barred by limitation under Article 102 of the Limitation Act which runs as follows :--

'For wages not otherwise expressly provided for bythis schedule.

Threeyears.

When the wages accrusdue.'

That remuneration claimed by the appellant would come within tho meaning of wages under Article 102 cannot De disputed on the authority of Punjab Province v. Tarachand, AIR 1947 FC 23. But this Article applies to suits, and tho present proceeding is not a suit. Therefore, Article 102, in terms, does not apply. The claim has been laid under Section 528 of the Indian Companies Act, 1956 (hereinafter to be referred to as the Act), which runs as follows :

'Debts of all descriptions to be admitted to proof.--In every winding up (subject, in the case of insolvent companies, to the application in accordance with the provisions of this Act or law of insolvency), all debts payable on a contingency, and all claims against the Company,present or future, certain or contingent, asceratined or sounding only in damages, shall be admissible to proot against the company, a just estimate being made, so tar as possible, of the value of such debts or claims as may be subject to any contingency, or may sound only in damages, or for some other reason may not bear a certain value.'

There is no substance in this contention. We are accordingly of opinion that the finding of the learned Judge rejecting the claim for remuneration is unsustainable.

5. With regard to the claim of Rs. 1400/- the learned Judge has accepted the appellant's case that Rs. 1400/- is still outstanding out of the loans advanced by him to the Company from time to time. This claim was rejected on the ground that the appellant had no authority, express or implied, to incur such a loan. Even if the finding that the appellant had no authority to incur loan is accepted (which is not necessary to decide), his claim for payment of Rs. 1400/- on this score cannot be resisted under Section 70 of the Indian Contract Act, which runs as follows :

'Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.'

In State of West Bengal v. B.K. Mondal and Sons, AIR 1962 SC 779, their Lordships laid down that between the person claiming compensation and the person against whom it is claimed some lawful relationship must subsist, for that is the implication of the use of the word 'lawfully' in Section 70 : but the said lawful relationship arises not because the party claiming compensation has done Something for the party against whom compensation is claimed, but because what has been done by the former has been accepted and enjoyed by the latter. The cause of action for this claim under Section 70 is not the breacn of the contract but is the voluntary acceptance and enjoyment. It is not on the basis of any subsisting contract between the parties, but it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. It is needless to elucidate the position further. Appellant's claim on this score must be allowed.

6. It is now necessary to consider the contention of Mr. Panda that the appeal has been barred by limitation. The learned Company Judge delivered judgment on 1-8-1960 and the appeal was filed on 30-10-60. Clearly the appeal was filed beyond 30 days but within 90 days. An application to condone delay was dismissed by a Bench of this Court with a specific order that the question whether the appeal was barred by limitation or not would be gone into at the time of hearing. Section 483 of the Act is as follows :--

'Appeals from any order made or decision given in the matter of the winding up of a Company by the Court shall lie to the same Court to which, in the same manner in whicn, and subject to the same conditions under which, appeals lie from any order or decision of the Court in cases within its ordinary jurisdiction.'

Rule 6 of the Companies (Court) Rules, 1959, framed by the Supreme Court under Section 643 (1) and (2) of the Act is as follows :--

'Save as provided by the Act or by these Rules, the practice and procedure of the Court and the provisions of the Code so far as applicable, shall apply to all proceedings under the Act and these Rules. The Registrar maydecline to accept any document which is presented otherwise than in accordance with these Rules or the practice and procedure of the Court.'

The rule provides that the practice and procedure of the Court and the provisions of the Civil Procedure Code so far as applicable, shall apply to all proceedings under the Act and these Rules. Under Section 483 of the Act, an appeal shall lie to the same Court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the Court in cases within its ordinary jurisdiction. Under the Civil Procedure Code, there is no provision for filing an appeal to a Division Bench of the High Court from any order or judgment of a Single Judge. Such an appeal lies under Rule 2, Chapter VII, Part II of the Rules of the High Court of Orissa, 1948, Vol. I. Rule 2(a) so far as it is relevant is as follows :

'Subject to Article 12 of the Orissa High Court Order, 1948 every appeal to the High Court under Article 4 .thereof read with Clause 10 of the Letters Patent constituting the High Court of Judicature at Patna from the judgment .....one Judge of the High Court.....shall be presented tothe Registrar within 30 days from the date of the judgment appealed from, unless a Bench, in its discretion, on good cause shown, shall grant further time. .....'

This appeal had been filed under this Rule and the period of limitation is clearly 30 days. Clause 10 of the Letters Patent makes provision for suth appeal. Mr. Ray, however, relies on Article 4 of the Orissa High Court Order, 1948 which runs as follows :--

'The High Court of Orissa shall have, in respect of the territories for the time being included in the Province of Orissa, all such original, appellate and other jurisdiction as under the law in force immediately before the prescribed day is exercisable in respect of the said territories or any part thereof by the High Court in Patna.'

Mr. Ray contends that under Article 4 of this Order, the High Court of Orissa shall have all such original, appellate and other jurisdiction as under the law in force immediately before the prescribed day (26-7-1948) is exercisable by the High Court in Patna. He contends that the Indian Companies Act, 1956 was not in force immediately before 26-7-1948 and, as such, the appeal under Section 483 of the Act is not to be governed by Clause 10 of the Letters Patent read with Article 4 of the Orissa High Court Order. The contention, though ingenious, has no force. The Letters Patent of the Patna High Court was in force immediately before the prescribed day. Under the Letters Patent, the High Court of Orissa is to exercise certain jurisdiction on the strength of Article 4 of the Orissa High Court Order, and once the Orissa High Court derives powers and jurisdiction under the Letters Patent, an appeal coming within its scope can be filed under any other Act coming into existence subsequent to the appointed day. This appeal comes directly within the scope of Rule 2 (a), as quoted above. The appeal should have been filed within 30 days. The application for granting further time having been already dismissed by a Bench, we have no further discretion to extend time.

We accordingly hold that the appeal is barred by limitation.

7. The appeal being barred by limitation is dismissed : but in the circumstances parties are to bear their own costs throughout.

Das, J.

8. I agree.


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