1. This appeal is directed against the order passed by the learned Company Judge in C.P. No. 33 of 1982, overruling the preliminary objection raised by the appellant company, the Malabar Industrial Company Ltd., about the maintainability of the petition filed under Sections 433(f) and 439(c) of the Companies Act, 1956, by the respondent, a contributory, on various grounds. The learned judge disagreed with the petitioner before him on most of the grounds but felt that there was a prima facie case that by the sale of the only estate belonging to the company, the substratum of the company would disappear and ordered advertisement of the petition.
2. Notice was ordered on June 21, 1982, after the petition was admitted. The appellant company entered appearance and filed its counter-affidavit and moved Application No. 262 of 1982 for revoking admission and for dismissal of the petition in limine. This petition was rejected with the observation that the question of maintainability could be gone into before ordering advertisement. Thereafter, the preliminary question whether the averments in the petition disclosed a prima facie case for ordering winding up was heard and the order under appeal was passed.
3. The company was incorporated in 1981. It has a paid up capital of Rs. 4.5 lakhs divided into 45,000 shares of Rs. 10 each. Ever since its incorporation, the company has engaged itself in plantation business only. The only estate owned by it is the Skinnerpuram rubber estate. It appears that three years before the filing of the petition, there was continuous labour unrest in the estate and that in 1981, the labour trouble assumed serious proportion on account of unreasonably high demands made by the workers for Onam advance. The company had to seek police protection and a lock-out had to be declared in the estate for more than six months. During the period of lock-out, the then general manager, who is the present managing director, was attacked a number of times by the workers. Under these circumstances, the directors of the company decided on May 4, 1982, in the best interests of the company, to sell the estate. In fact, even before this, sale of the estate was under the contemplation of the company and the company had received certain offers from intending buyers. On May 17, 1982, an advertisement was made in a newspaper inviting offers for the purchase of the estate. An extraordinary meeting of the members of the company was convened on June 13, 1982, for amending some of the articles of association and for getting the consent of the members for the proposed sale. The members who attended the meeting consented to the sale and the articles of association were amended imposing further restrictions on the transfer of shares and lifting the minimum share qualification required for being appointed as director. It was against this background that the petition was filed on June 18, 1982, by the respondent before us for the reliefs mentioned above.
4. The learned judge formulated three points for consideration. The points are : (1) with the sale of the Skinnerpuram estate, the substratum of the company would disappear ; (2) the amendments to the articles of association are calculated to oppress the minority shareholders; other oppressive measures are also being resorted to ; and the shareholders have lost confidence; (3) with the majority backing of the members of a family, the affairs of the company are being mismanaged.
5. On grounds No. 2 and 3, the learned judge held that a contributory had other remedies open to him, including remedy by way of a suit He observed that if these two grounds alone were there, he would have considered the question of throwing out the petition at the initial stage itself. However, he considered ground No. 1 to see if there was a prima facie case.
6. In considering ground No. 1, the learned judge referred to the objects clause of the company and observed that since the main object of the company was plantation business, the sale of the Skinnerpuram estate would involve a substantial failure of its objects. He referred to the main object rule and noted the decision in Mohanlal Dhanjibhai Mehta v. Chunilal B. Mehta  32 Comp Cas 970 (Guj); AIR 1962 Guj 269 and observed that the petitioner had at least an arguable case regarding disappearance of substratum and that it was too early to hold that he was disentitled to a full trial. According to the learned judge, ' the consequences of advertising the winding up petition cannot also be very serious in a case like this, where the company itself has already advertised for sale of whole of its business assets. According to the learned judge, the company has no creditors who would press for payment on the mere publication of an advertisement and since the company has also no case that it was in the money market for raising further funds, advertising the winding up petition will not have any serious adverse consequences on the company.
7. The learned counsel for the appellant strenuously contended that the approach of the learned judge was defective and that reliance on Mohanlal Dhanjibkai Mehta v. Chunilal B. Mehta  32 Comp Cas 970 (Guj); AIR 1962 Guj 269, to 'the exclusion of the law settled by the Supreme Court and by this court on the scope of the expression ' just and equitable grounds' and the extent of disappearance of substratum theory was defective.
8. According to him, even the Gujarat case on which the learned judge relied, does not support the conclusion arrived at by him.
9. Before considering the submission made, we would, in passing, refer to what transpired before the learned judge during the proceedings about which reference is made by him in paragraph 9 of the order. The company offered to purchase the respondent's shares at Rs. 30 per share. He did not accept this offer. The learned judge felt that a more reasonable offer could have been made having regard to the amount of Rs. 2 crores that the proposed sale would fetch and the fact that the liabilities of the company were not likely to exceed a few lakhs of rupees. The respondent's attitude was to accept an amount for his share that was fixed by any impartial agency and to get out of the company. The learned judge observed that the convening of a meeting of members by the court would be considered in due course.
10. The appellant's counsel took us through the articles of association and stated that no prima facie case was disclosed in the petition even for advertisement. The relevant provisions of the articles clearly indicated as to what were the objects of the company. It was not the object of the company to engage in rubber plantations alone. Rubber plantation is only one among the objects of the company. The objects for which the company was established as gathered from the articles of association are very wide in nature and cannot be restricted to rubber plantation alone. Even the name of the company, the Malabar Industrial Company Ltd., suggests that it can engage itself in multifarious activities. The board of directors decided to sell the estate in the best interests of the company since they found that the working of the company was rendered difficult on account of the widespread labour unrest. By the sale of the estate, though it was the only asset of the company, it cannot be said that the company would cease to exist or that its substratum would disappear. The company can purchase other estates or engage in other activities with the sale proceeds. It would not be in the interest of the shareholders, a preponderant majority of whom are closely related to the directors, to fritter away the sale proceeds otherwise than in a manner profitable to them. In fact, the board of directors had as early as March, 1981, started negotiations for purchase of other estates. The learned judge, according to him, was not correct in equating an advertisement for sale of land of a company with solid assets and without debts with a liquidation advertisement by the court. The liquidation advertisement had its deleterious effect on the company. The apprehension of the respondent that the sale proceeds would disappear is a mere apprehension voiced in support of the petition, for, the shareholders have very effective remedies both under the general law and under the provisions of the Companies Act to safeguard their interests after the sale proceeds come into the hands of the company.
11. We will now proceed to consider the submissions made by the appellant's counsel with reference to the authorities cited before us. Before considering the question of law involved, it is necessary to bear in mind the admitted facts of the case. The respondent has no case that the only object of the company is to engage itself in rubber plantation. He has no case that the company has not been making profits. He does not plead that the company is in debts and is not solvent. The only apprehension that he disclosed in the petition is that by the sale of the only asset of the company, the substratum of the company would disappear. He admits that ' the company is having no liability and the company is earning profit and dividends are also being declared '. It is against this admitted case of the respondent that his request for winding up has to be considered.
12. Section 433(f) enables the court in appropriate cases to order winding up of the company only when the court is of opinion that it is just and equitable so to do. If the court finds that the petitioner before it has other efficacious remedy, the court will refuse to make an order of winding up. It is, therefore, necessary for a contributory seeking the discretionary powers of the court under Section 433(f) not only to establish that the circumstances obtaining in the company are such that a winding up of the company is the only alternative but also to show that he has no other remedies available.
13. In Hind Overseas P. Ltd. v. R.P. Jhunjhunwalla  46 Comp Cas 91 (SC); AIR 1976 SC 565, 571, the Supreme Court has observed as follows (p. 106 of 46 Comp Cas ) :
' Section 433(f) under which this application has been made has to be read with Section 443(2) of the Act. Under the latter provision, where the petition is presented on the ground that it is just and equitable that the company should be wound up, the court may refuse to make an order of winding up if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.
14. Again under Sections 397 and 398 of the Act, there are preventive provisions in the Act as a safeguard against oppression in management. These provisions also indicate that relief under Section 433(f) based on the just and equitable clause is in the nature of a last resort when other remedies are not efficacious enough to protect the general interests of the company. '
15. It is necessary to bear in mind that the relief under Section 433(f) is in the nature of a last resort, thus obliging the court to give relief to the party when moved under the section only under compelling circumstances.
16. We will now read the relevant clauses in the memorandum of association detailing the objects for which the company was established. Clause 3 is the relevant clause. It consists of Sub-clauses (a) to (i). For our purpose, it is enough if we read Clauses (a) to (d) and (i).
' 3. The objects for which the company is established are ;
(a) To purchase or otherwise acquire, to hold, improve and cultivate land on the west coast of India and elsewhere and to sell, lease, mortgage, or otherwise dispose of the whole or any part of it.
(b) To develop the resources of such lands by clearing, draining, farming, planting, building and otherwise improving, as may, from time to time, be considered advisable and to plant, grow and produce, rubber, tea, coffee, cocoa, cardamom, cinchona, pepper, cocoanuts, arecanut, oil palms, cashew, lime, orange, tapioca, potatoes, paddy, lemon, grass and other agricultural produce of the soil and to carry on the business of owners and planters and to buy and sell such produce, plantations and estates.
(c) To treat, cure, prepare, submit to any process of manufacture, manufacture and render marketable, whether on account of the company or others, tea, rubber, coffee, cocoa, cardamom, cocoanuts, arecanuts, cashew, pepper, lemon, grass and every other kind of vegetable, mineral or other produce of the soil and to buy, sell, dispose of and otherwise deal in the above articles either in their prepared, manufactured or raw state, and either by wholesale or retail, and for the purposes aforesaid, purchase, take on lease or on mortgage, or otherwise acquire, erect, install, alter, maintain, reconstruct and provide any buildings, offices, workshops, mills, factories, store houses, show-rooms, plant, machinery, appliances, apparatus and the like, as shall be deemed necessary, proper or expedient.
(d) To carry on any other business of an agricultural, industrial or commercial character which may, in the opinion of the directors, be conveniently carried on by the company......
(i) In construing the above sub-clauses, the scope of no one of such sub-clauses shall be deemed to limit or affect the scope of any other of such sub-clauses. '
17. Clause (i) makes it clear that each clause is independent of the other. In other words, no one clause controls the other. Therefore, the company can engage itself in any of the different modes of businesses mentioned in one or the other of Clause 3. Clause 3(a) is comprehensive enough to include within it all kinds of transactions dealing with land. Clause 3(b) deals with plantations in various commodities including rubber, tea, coffee cocoa, cardamom, etc. Clause 3(c) deals with marketing of the commodities. Clause 3(d) enables the company to engage itself not only in agricultural activities but also in industrial and commercial activities. We have adverted to these clauses to show that rubber plantation cannot be understood to be the only activity that the company can engage in. When we say this, we are aware of the fact that the company, ever since its incorporation, had been engaging itself only in rubber plantation. That by itself will not render the other activities that the company may engage in as improper or impermissible. Viewed in this light, it will have to be held that the sale of the only plantation that the company owns, will not render the disappearance of the substratum of the company, to justify the making out of a prima facie case much less an order of winding up.
18. The court will be justified in concluding that the substratum of the company has disappeared and in finding justification for an order of winding up, only when the activities of the company become impossible by the operation of law or by unforeseen circumstances. Where the board of directors decide about the sale of an estate with the idea of investing the sale proceeds profitable in other ventures, even though the sale is of the only estate of the company, it cannot be said that the substratum of the company had disappeared.
19. In Seth Mohan Lal v. Grain Chambers Ltd.  38 Comp Cas 543 ; AIR 1968 SC 772, the Supreme Court was dealing with a company which carried on extensive business in ' futures ' in gur. The Central Government issued a notification which prohibited business in 'futures ' in gur. An application for winding up was filed on the averment that by reason of the notification, the substratum of the company was destroyed, that all the liquid assets of the company were disposed of and that there was no reasonable prospect for the company commencing or carrying on business thereafter. The Supreme Court found that the company was formed not with the object of carrying on business in ' futures ' in gur alone, but in several other commodities as well. The Supreme Court had not before it any evidence that the company was unable to pay its debts. The prayer for winding up was refused in the following terms (p. 557 of 38 Comp Cas):
' In making an order for winding up on the ground that it is just and equitable that a company should be wound up, the court will consider the interests of the shareholders as well as of the creditors. Substratum of the company is said to have disappeared when the object for which it was incorporated has substantially failed, or when it is impossible to carry on the business of the company except at a loss, or the existing and possible assets are insufficient to meet the existing liabilities. In the present case, the object for which the company was incorporated has not substantially failed, and it cannot be said that the company could not carry on its business except at a loss, nor that its assets were insufficient to meet its liabilities. On the view we have taken, there were no creditors to whom debts were payable by the company. The appellants had, it is true, filed suits against the company in respect of certain gur transactions on the footing that they had entered into transactions in the names of other persons. But those suits were dismissed. The business organisation of the company cannot be said to have been destroyed merely because the brokers who were acting as mediators in carrying out the business between the members had been discharged and their accounts settled. The services of the brokers could again be secured. The company could always restart the business with the assets it possessed, and prosecute the objects for which it was incorporated. It is true that because of this long drawn out litigation, the company's business has come to a standstill. But we cannot on that ground direct that the company be wound up. Primarily, the circumstances existing as at the date of the petition must be taken into consideration for determining whether a case is made out for holding that it is just and equitable that the company should be wound up, and we agree with the High Court that no such case is made out.'
20. The above principle applies squarely to the present case.
21. In Madhusudan Gordhandas & Co. v. Madhu Woollen Industries P. Ltd.  42 Comp Cas 125 ; AIR 1971 SC 2600, the Supreme Court was considering the shortfall in the assets of a company after sale of a machinery and a contention that the substratum of the company had gone. The Supreme Court observed that the allegation that the substratum has gone is to be alleged and proved as a fact and stated thus (p. 134 of 42 Comp Cas) :
' In determining whether or not the substratum of the company has gone, the objects of the company and the case of the company on that question will have to be looked into. In the present case, the company alleged that with the proceeds of sale, the company intended to enter into some other profitable business. The mere fact that the company has suffered trading losses will not destroy its substratum unless there is no reasonable prospect of it ever making a profit in the future, and the court is reluctant to hold that it has no such prospect.... The company has not abandoned objects of business. There is no such allegation or proof. It cannot, in the facts and circumstances of the present case, be held that the substratum of the company is gone.'
22. This court had occasion to consider a plea similar to the one involved in this case in George v. Athimattam Rubber Company Ltd.  35 Comp Cas 17 ; AIR 1964 Ker 212. Ramau Nair J., while considering the plea that the substratum of the company had disappeared, observed thus (p. 21 of 35 Comp Cas):
' It is not suggested that the company is commercially insolvent, not even that it is not a sound concern. In this connection I might remark that it is not disputed that the company's two rupee fully paid up shares which were selling at between 80 np. and 85 np. per share before the new board took charge are now selling at Rs. 1.23. This is not an indication that the company's affairs are deteriorating.
Coming now to the alleged disappearance of the substratum, it is true that the company has, in the past, sold some of its undertakings and acquired new undertakings in their place. The company was formed for the purpose, among other purposes, of acquiring two estates, the Little Flower Estate and the Kainakary Estate, but its memorandum is very widely worded, and, by clauses expressly declared to be independent main objects clauses, empowers it to buy other estates and carry on the business of planting among other activities. That it sold one of the estates it was formed to acquire and a substantial portion of the remaining estate, does not mean that its substratum has gone so long as it has acquired other estates and is in a position to carry on the business it is authorised by its memorandum to do.'
23. In Pothen v. Hindustan Trading Corporation P. Ltd.  37 Comp Cas 266 ; AIR 1968 Ker 149, again the plea of a contributory to wind up a private limited company under the just and equitable clause, on the ground that the substratum of the company is gone fell to be considered. Raman Nayar J. had this to say regarding the task that a contributory has under the just and equitable clause (p. 267 of 37 Comp Cas):
'A contributory coming under the just and equitable clause has generally an uphill task, for the statute establishes a domestic tribunal as between the members and company and thus enables the members themselves by passing the requisite resolutions to determine whether there shall be a voluntary liquidation or whether the court shall be asked to make a compulsory order. The petitioner's course is not made any the less easy by the circumstance that the majority of the members holding the majority of the shares are opposed to the winding up. He will have to make out very strong grounds indeed if he is to succeed.
Far from this being the case, it seems to me that, even if the allegations made in the petition are accepted, they would hardly justify a winding-up order. What is said is that as a result of differences with regard to the management of the company and the circumstance that the company was running at a loss, the petitioner and the other members who support him ' did not wish to risk any more of their property in the company' and that ' as a result of the discussion all the members came to a tentative proposal to voluntarily wind up the affairs of the company '. As a step towards this, the company held an extraordinary general meeting on March 15, 1965, at which it was unanimously resolved that all of its assets should be sold. However, with a view to prevent the necessary resolutions being passed, the directors, who had apparently changed their mind about the winding-up, were proposing to issue fresh shares so as to secure a majority on their side. 1,800 shares have been issued since the presentation of this petition. But, as we have seen, even ignoring this issue, there is a majority opposed to the winding-up. Even on the basis of the shareholding as at the time of the general meeting of March 15, 1965, there would be a majority opposed to the winding-up so that it does not appear that there was at any time any chance of the special resolution necessary for either a voluntary or compulsory winding-up being passed. And, even if it be that the members had in mind a winding-up when they resolved to sell all the assets of the company, nothing prevents them from changing their mind and deciding to continue the company if that is possible. The company owned six undertakings. Of these, only two have been sold, and even if it be, as alleged by the petitioner, that these were the most substantial of the undertakings, that would not be a sufficient ground for a winding-up order. The company was not formed for taking over and running any particular undertaking. It can still continue to run its four remaining undertakings and its objects are wide enough for it to take up new ventures. Even where the sole undertaking of a company has been actually sold, it cannot be said that its substratum has disappeared so long as there is some other business which it can carry on coming within the objects stated in its memorandum. '
24. From the above authorities, the heavy burden that law imposes on a contributory seeking relief under the just and equitable clause on the allegation that the substratum of the company has disappeared can be clearly understood. Even if the only asset of a company is to be sold, the court will be very slow in ordering a winding-up when the court finds either that the petitioner before it has other efficacious remedy or that the company is solvent enough to engage itself in other profitable activities with the sale proceeds of the estate. In this case, the objects of the company are wide enough to permit the company to engage itself in various activities. We do not find sufficient averments in the petition in support of a prima facie case of winding-up. In the absence of any averment that it would be impossible for the company to carry on its activities or that the company has no assets to implement its objects, the bare allegation that the sale of the estate would render the company inoperative is not in law sufficient to sustain a claim under Section 433(f).
25. The learned judge noting Mohanlal Dhanjibhai Mehta v. Chunilal B. Mehta  32 Comp Cas 970 (Guj); AIR 1962 Guj 269, observed as follows:
'a shareholder is entitled to say that he has invested his money for a particular object and that he is not interested in other speculations or ventures. The question in such case will be whether 'the main objects rule' applies to the facts of the case. The shareholder will succeed in getting a winding-up order if that rule of construction is applicable, he may fail if the rule is inapplicable, or if the company satisfied the court that reinvestment would also be for the same object. On the facts of the present case, it is enough to notice that as per the ' explanatory statement' extracted earlier in paragraph (2), the company itself was of the view that it was incorporated in the year 1918 as a public limited company with the main object of carrying on plantation business. '
26. The learned judge noted the explanatory statement in support of his conclusion that a prima facie case was made out based on the main object theory. According to us, even the explanatory statement cannot be understood to mean that the main object of the company was to carry on plantation in rubber but was only to carry on plantation business. We will now consider the above decision to see whether the learned judge was justified in relying upon it to pass the order under appeal.
27. In Mohanlal v. Chunilal  32 Comp Cas 970 (Guj); AIR 1962 Gujarat 269, Bhagwati J., as he then was, considering the last ground that the substratum of the company has gone, noted the observation of Lord Cairns in In re Suburban Hotel Co.  2 Ch App 737, In re German Date Coffee Co.  20 Ch D 169, In re Eastern Telegraph Co. Ltd.  2 All ER 104 (Ch D), In re Red Rock Gold Mining Co. Ltd.  61 LT 785 and In re Kitson & Co. Ltd.  1 All ER 435, and observed thus (at page 980 of 32 Comp Cas) :
' It is, therefore, clear that in order to bring the case within the principle underlying substratum cases, it is not enough to show that the main or dominant object for which the company is incorporated has been abandoned or that there is no intention on the part of the company to carry out such object but it must be proved that such object has become impossible of fulfilment either by reason of the subject-matter of the company being gone or for any other reason. The requirement of the principle that the main or primary object of the company must have become impossible is emphasised in all the substratum cases and particular reference is to be found in In re Suburban Hotel Co.  2 Ch App 737, where Lord Cairns confined the application of the principle to cases where ' the whole of the business which the company was incorporated to carry on had become impossible'. Considerable emphasis was also laid on this requirement in Galbraith v. Merito Shipping Co.  SC 446. In that case, the principal object of the company was ship-owning but the last of the company's ships had been disposed of in 1919 and thereafter the company's capital was invested in securities. The petitioner failed to aver in the petition that the resumption of ship-owning was impossible and on that ground the petition was dismissed.'
28. The learned judge considered further the main or primary object or purpose and observed that this question must inevitably turn on the construction of the memorandum of association. He repelled the contention of the Advocate-General in that case that Clause (3) of the memorandum which authorised the company to lease the factory was not an independent object but was an object ancillary to the main object and said as follows (p. 981 of 32 Comp Cas):
'......This contention of the learned Advocate-General is, however, untenable and cannot bear examination. This contention is based on the premise that the object of carrying on any one or more of the businesses specified in paragraphs 1 to 6 of Clause 3 of the memorandum is the main object of the company and that the objects set out in the remaining paragraphs are ancillary to this main object and the premise in its turn depends on the application of the main objects rule of construction. In my opinion, however, the main objects rule of construction cannot apply in the present case.'
29. The learned judge did not content himself with the above observation but proceeded further assuming that he was wrong in not applying the main objects rule of construction, and treating the objects specified in the various paragraphs as independent objects, and still held that the contention that the substratum of the company was gone could not succeed. The learned judge repelled the contention of the Advocate-General that since the company has abandoned its main and primary object, the substratum of the company must be deemed to be gone and wound up the discussion in the following words (p. 984 of 32 Comp Cas) :
' As I have already pointed out above, in order to make out a case for winding up on the ground that the substratum of the company is gone, it is not enough for the petitioner to allege that the main or dominant object of the company has been abandoned but the petitioner must go further and show that the main or dominant object of the company has become impossible. The impossibility must be either physical or legal impossibility or it may even amount to reasonable probability of the company not being able to carry out the main or dominant object. The abandonment of the main or dominant object is not sufficient to support a petition for winding up on the ground that the substratum of the company is gone. The intention of the board of directors or the shareholders of the company as regards the continuance or discontinuance of the business which constitutes the main or primary object is entirely irrelevant.'
30. We thought it necessary to refer to the Gujarat case in some detail, since the learned judge appeared to rely on the main objects theory referred to therein and also because the counsel for the appellant took us through the said decision to dispel the impression that the said decision had laid down anything opposed to the accepted principle. We find that the Gujarat case does not assist the conclusion that in a case like the one on hand where the memorandum of association gives wide powers to the company, the substratum would disappear by the sale of the only estate that the company had.
31. We will usefully refer to In re Taldua Rubber Co. Ltd.  2 All ER 763, 767 (Ch D), where we got the enunciation of law regarding the failure of substratum. The following observation of Lord Greene M.R. in In re Kitson & Co. Ltd.  1 All ER 435, 438 (CA) was noted with approval in that case.
' It might possibly have been thought that unless it got this business it was not really starting its career in the way in which the shareholders bargained it should be started; but the question we have to decide is whether, that business having been acquired 46 years ago, the disposal of it last year amounted to a destruction of the substratum. In my opinion, the main and paramount object of this company was to carry on an engineering business of a general kind. '
32. In Taldua's case  2 All ER 763 (Ch D), the court was dealing with a business which was, in fact, acquired and carried on for over 29 years. The above passage of Lord Greene M.R. was relied upon by the court and it was observed that (p. 767) :
' The main and paramount object of this company was to carry on the business of conducting rubber estates, and was not limited to the business of carrying on the particular estate.'
33. The court then proceeded to examine whether the absence before the court of any concrete scheme for dealing with the proceeds of the sale is a reason for making a winding-up order. After referring to another passage in Kitson's case  1 All ER 435 (CA), the court observed as follows (p. 768):
' Apart from authority, it appears to me that the common sense of the matter demands that the existence or non-existence of a concrete scheme at the time the petition conies before the court should be regarded as a wholly irrelevant matter, otherwise it would be impossible for the court to draw any safe line in any particular case. Where is the court to draw the line What period is to be allowed to elapse What is to be regarded as satisfactory evidence of the intention of the company to go forward into some new venture The court clearly is not called on to adjudge the merits or demerits of any scheme, and this fact appears to me to make the consideration by the court of the existence or non-existence of a particular scheme all the less fruitful. If this point were well taken, it would follow that a shareholder who desired a company to be wound up would be well-advised, as soon as the resolution for the sale of the company's business had been passed, immediately to put a petition on the file, and bring the petition on in circumstances in which he could accurately allege that there was no scheme before the court.'
34. The above observations are a complete answer to the plea put forward by the respondent's counsel that the shareholders are in the dark as to what the company would do with the sale proceeds. The shareholders have effective remedies for their interests to be safeguarded if the company misbehaved after the sale proceeds came into its bands. It was this apprehension that was strenuously voiced before us. We need only, observe that the shareholders have other effective remedies to take if they apprehend that the sale proceeds are not being utilised properly.
35. It is contended that all the authorities referred to above except one were those decided after trial and that it is premature now on the scanty materials available to come to a conclusion that the substratum of the company has not disappeared. We would have agreed with the respondent if the materials available before us were such as to persuade us to give an opportunity to the respondent to adduce further evidence. In this case, we do not feel further materials can improve the respondent's case. The objects of the association are very widely worded. One of the objects is to carry on plantation business. It is not indicated that plantation should be of any particular variety. In the absence of any allegation either that the company is insolvent or that the company has debts or that the company is not run profitably, a mere sale of an estate will not by itself render its substratum to disappear. All that the shareholder can establish by oral evidence may be to show either that the shares of the company are cornered by the relatives of the managing director, etc., or that the majority is oppressing the minority or that the sale proceeds would be frittered away. In the nature of the averments in this case, that will not take us anywhere.
36. An order to wind up is an extreme step. It is the last resort that a shareholder should adopt. The company court will be very slow to interfere with the working of a company. That being so, it would not be wise in the context of the memorandum of association and in the state of the law on the point to direct advertisement of the. liquidation petition. We do not feel that advertisement of the liquidation petition and advertisement of sale of the only property in this case can be placed on par.
37. We are not referring to the averments in the counter-affidavit giving various details about the steps undertaken by the company early enough to sell the estate, the advertisement taken by it, the negotiations initiated and other relevant particulars to make out the bona fides of the transaction. For our purpose, it is sufficient to note that the case based on the disappearance of substratum has not been established even prima facie. Under these circumstances, we hold, with respect, that the learned judge was not justified in directing advertisement of the liquidation petition.
38. We allow this appeal and dismiss the petition, C.P. No. 33 of 1982, without prejudice to the rights of the respondent to take appropriate remedies to safeguard his interests if he finds, either that the sale is for grossly inadequate consideration or that the sale proceeds are not being profitably invested. The parties are directed to bear their costs.