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General Assurance Society Ltd. Vs. Rajasthan Agriculture Live Stock and General Insurance Co. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtRajasthan High Court
Decided On
Case NumberCivil Ref. No. 49 of 1959
Judge
Reported inAIR1960Raj169; [1961]31CompCas330(Raj)
ActsCompanies Act, 1956 - Sections 448, 647 and 652
AppellantGeneral Assurance Society Ltd.
RespondentRajasthan Agriculture Live Stock and General Insurance Co.
Appellant Advocate J.S. Rastogi, Adv.
Respondent Advocate N.M. Kasliwal, Adv. for; Mehtab Chand Golecha and; Kasto
Excerpt:
- - 5. section 647 of the new act clearly lays down that winding up proceedings which have com-menced before the commencement of the new act shall be continued under the provisions of the old act with the exception that sub-sec......registrar of the jaipur bench was appointed as official liquidator in the case. in this capacity shri bohra moved an application in the court of the district judge for the prosecution of the directors which was allowed. against the order of the district judge the directors preferred an appeal to this court shri bohra was implead-ed as a respondent in this appeal.3. in the meantime shri bohra ceased to to the deputy registrar of the high court bench at jaipur and shri m. j. mardia was appointed in his place as deputy registrar. shri bohra was appointed official liquidator under section 448(1)(b) of the new companies act which came into force on 1-4-56 fay the central government under a notification dated 18-7-1956. the appointment of shri bohra was ex-officio under this notification in.....
Judgment:

Jagat Narayan, J.

1. This is a reference by a learned Single Judge.

2. The facts which have given rise to it are these. Winding up proceedings under Section 168 of the old Companies Act were started against the Rajasthan Agriculture Live Stock and General insurance Co. on the application of the General Assurance Society Ltd. on 1-5-54 in the court of the District Judge, Jaipur City. A winding up order was made on 19-12-56 and under this winding up order Shri K. L. Bohra who was then Deputy Registrar of the Jaipur Bench was appointed as Official Liquidator in the case. In this capacity Shri Bohra moved an application in the court of the District Judge for the prosecution of the Directors which was allowed. Against the order of the District Judge the Directors preferred an appeal to this Court Shri Bohra was implead-ed as a respondent in this appeal.

3. In the meantime Shri Bohra ceased to to the Deputy Registrar of the High Court Bench at Jaipur and Shri M. J. Mardia was appointed in his place as Deputy Registrar. Shri Bohra was appointed Official Liquidator under Section 448(1)(b) of the new Companies Act which came into force on 1-4-56 fay the Central Government under a notification dated 18-7-1956. The appointment of Shri Bohra was ex-officio under this notification in his capacity as Deputy Registrar. When Shri Bohra was transferred from this post and Shri Mardia took charge, the latter was appointed Official Liquidator under Section 448(l)(b) of the new Companies Act by the Central Government by a notification dated 13-8-1957.

Thereafter Shri Mardia applied to this Court for being substituted in place of Shri Bohra in the appeal filed by the Directors against the order of their prosecution. This application was allowed by the order of this Court dated 30-10-57 which was passed by Sharma J. After the appeal was disposed of Shri Mardia applied to the court of the District Judge for the prosecution of three of the Directors of the Rajasthan Agriculture Live Stock and General Insurance Co. The Directors objected to the application on the ground that Sh. Mardia has no locus standi to file it. Their case was that the winding up proceedings were being continued under the old Act in view of the provisions of Section 647 of the new Act and Sh. K. L. Bohra's appointment as Official Liquidator was in force and had not come to an end, no order under Section 176 (1) of the old Act removing him from this office having been passed,

On behalf of the petitioner company it was urged before the learned District Judge that the order passed by this Court on 30-10-57 in the appeal amounted to the removal of Sh. K. L. Bohra and the appointment of Sh. M. J. Mardia as Official Liquidator in the case. The learned District Judge thereupon made a reference to this Court which came up before a learned single Judge for hearing. As the order substituting the name of Shri Mardia in place of that of Shri Bohra was passed by another learned Single Judge of this Court the present ease has been referred to a Division Bench.

4. Having heard the learned counsel for the parties it appears to us that Sh. K. L. Bohra still continues to be the Official Liquidator in the present case and his appointment was not terminated by the order of this Court dated 30-10-57. That order was passed only for purposes of the appeal. This Court did not purport to remove Shri Bohra from the office of Official Liquidator in exercise of the powers under Section 176 (1) of the old Act.

5. Section 647 of the new Act clearly lays down that winding up proceedings which have com-menced before the commencement of the new Act shall be continued under the provisions of the old Act with the exception that sub-sec. (7) of Section 555 of the new Act shall apply to them in respect of any moneys paid into the Companies Liquidation Account whether before or after such commencement The learned counsel for. Shri M. J. Mardia has drawn our attention to Section 652 of the new Act which lays down that any person appointed to any office under or by virtue of any previous companies law shall be deemed to have been appointed to that office under or by virtue, of this Act,

That provision will only be attracted in case Shri K. L. Bohra who was appointed Official Liquidator in the present case has to deal with any matter falling under sub-sec. (i) of Section 647. Section 176 of the old Act lays down that any official liquidator may resign or be removed by the Court on due cause shown. Sh. K. L. Bohra has neither resigned nor has been removed by the Court. This removal can only take place on due cause shown. The transfer of Sh. K. L. Bohra from the post of Deputy Registrar does not ipso facto terminate his appointment as olficial Liquidator in the present case. It is clear from the notification dated 18-7-56 appointing Shri K. L. Bohra as Official Liquidator and notification dated 13-8-57 appointing Shri M. J. Mardia as Official Liquidator that these appointment have been made under Section 448(i)(b) of the new Act.

Section 448 provides for such appointments for purposes of the new Act only. These appointments under the new Act do not affect the appointment made under the old Act in any way. Learned counsel for Shri Mardia also drew our attention to Rules 572 and 607 of the High Court Rules framed under the old Companies Act and argued that Shri Bohra could have been removed and Shri Mardia could have been appointed in his place under these rules, The rules are however subject to the Act and under the old Act as pointed out above the removal can only be made on due cause shown,

6. We accordingly hold that Shri Bohra continues to be the Official Liquidator in the present case and the appointment of Shri Mardia under Section 448 of the new Act is only effective with regard to the cases under the new Act,

7. Let a copy of this Order be sent to the District Judge, Jaipur City, who has made the reference.

8. We direct that parties shall bear their owncosts.


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