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Mehtab Chand Golcha and ors. Vs. the Official Liquidator and anr. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtRajasthan High Court
Decided On
Case NumberD.B. Special (Co) Appeal No. 150 of 1973
Judge
Reported in1973(6)WLN902
AppellantMehtab Chand Golcha and ors.
RespondentThe Official Liquidator and anr.
DispositionAppeal dismissed
Cases Referred and Madan Gopal Daga v. Sachindra Nath Sen
Excerpt:
.....483--interlocutory order--held, appeal does not lie.;it is not each and every order passed by the company judge that would be appealable under section 485 of the act. but it is such orders as may determine any right or liability that could be made the subject matter of an appeal. in the present case the appellants are on trial and their liability, if at all, has yet to be determined. the order passed by the learned company judge is nothing but an interlocutory order. the order of the learned company judge cannot be said to take away any of the fundamental rights of the appellants. in other words, it does not determine any right as such.;(b) words and phrases - 'any order' in section 483 of the companies act--meaning of.;the words 'any order' occurring in the section are not to be..........companies act, 1956, hereinafter to be referred as the act. they raised an objection before the learned company judge that section 454(5a) of the act was ultra vires the constitution being violative of article 14 thereof by his order dated 25th april, 1973, the learned company judge rejected the objections holding that section 454(5a) of the act was ultra-vires.2. the present appeal is directed against this order. the question that is confronting the appellants at the very thresh hold is whether the order is appealable and the appeal lies within this court the learned counsel bases his right of appeal on section 483 of the act, which we may read: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.....
Judgment:

Kan Singh, J.

1. The appeal before us is by Shri Mehtab Chand Golcha and others, who are standing trial in this Court for offences under Section 454(5) of the Indian Companies Act, 1956, hereinafter to be referred as the Act. They raised an objection before the learned Company Judge that Section 454(5A) of the Act was ultra vires the Constitution being violative of Article 14 thereof By his order dated 25th April, 1973, the learned Company Judge rejected the objections holding that Section 454(5A) of the Act was ultra-vires.

2. The present appeal is directed against this order. The question that is confronting the appellants at the very thresh hold is whether the order is appealable and the appeal lies within this Court The learned Counsel bases his right of appeal on Section 483 of the Act, which we may read:

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 which, and subject to the same conditions under which, appeals lit from any order or decision of the Court in cases within its ordinary jurisdiction.

The learned Counsel maintains that this section is wide enough to confer a right of appeal on an aggrieved party against any order made or decision given in the rnatter of winding-up of a Company and is not conditioned by any other limitations except regarding the procedural matters like that of filing the appeal within the period of limitation or payment of court-fee. It must, however, be said to the credit of the learned Counsel that he at once conceded that the words 'any order' occurring in the section are not to be construed to cover each and every kind of order that a Company Judge may pass but they should be taken to mean an order which in substance determines some right of the concerned party. In the present case, however, the learned Counsel maintains that the fundamental right of the party under Article 14 of the Constitution has been determined by the learned Company Judge regarding the mode of trial of the appellants.

3. Section 451 deals with the statement of affairs of the Company to be made to Official Liquidator. It, inter alia, lays down in what manner the Directors and persons, who are at the relevant date Manager, Secretary or Cnief Officer of the Company or such other persons as are mentioned in the section, have to make the statements to the Official Liquidator. Then Sub-section (5) provides:

If any person, without resonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years or with fine which may extend to one hundred rupees for every day during which the default continues, or with both.

Sub-section(5A) which empowers the court to take cognizance of the above offence lays down:

The Court by which the winding up order is made or the provisional liquidator is appointed, may take cognizance of an offence under Sub-section (5) upon receiving a complaint of facts constituting such an offence and trying the offence itself in accordance with the procedure, laid down in the Code of Criminal Procedure, 1898, for the trial of summons cases by Magistrates.

The Company Judge is also empowered under Section 457 of the Act to sanction the institution inter-alia of criminal prosecutions by the Official Liquidator.

4. It is in the light of these provisions that we have to see whether Section 483 of the Act should be so construed as to confer a right of appeal on a party even in the exercise of the criminal jurisdiction by the Company Judge of this Court. We have no doubt that the procedure for the trial of offences under Sub-section (5) of Section 454 shall be governed by the Criminal Procedure Code, subject to the modifications contained in Sub-section (5-A) of Section 454 of the Act. Section 5(i) of the Criminal Procedure Code lays down the procedure for the trial of offences that all offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions hereinafter contained (in the Criminal Procedure Code). Sub-section (2) of Section 5 Cr. P.C. lays down that all offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. The combined effect of Sub-section 5(2) of the Criminal Procedure Code and Section 454(5A) of the Act is that the mode of trial for the offence in question shall be governed by the Code of Criminal Procedure subject only to the modification that the offence shall be tried by the Company Judge as a summons case but he has nevertheless to proceed in the same manner as a summons case to be tried by a Magistrate. The opening words of Section 483 of the Act make provision for appeals from any order made or decision given in the matter of the winding-up of a Company by the Court. The pointed question before us is whether once the Company Judge has taken cognizance of the offence and the accused is put on trial, an order pissed in the course of the trial can be taken to be a matter relating to the winding-up of the Company Having considered the matter, we are clearly of the opinion that such an order passed during the course of that criminal trial would be outside the periphery or orbit of matters tor the winding up of a Company. The Company Judge may be said to be dealing with the question of sanctioning prosecution by the Official Liquidator as a matter relating to the winding up of a Company but once this stage has passed and the court has taken cognizance of the offence it would cease to be a matter for the winding UP of the Company, though the offence may have been committed in relation to the administration of the affairs of a Company during winding up. The criminal case would then be dealt with in the exercise of the criminal jurisdiction of this Court. Up to the stage of sanctioning the prosection, the Company Judge would be exercising Civil jurisdiction.

5. Therefore, we have to ask ourselves and answer the question whether a right of appeal can be founded on Section 483 of the Act in relating to the order passed by Company Judge as a special criminal court. To our mind, the words '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', will very much bring in the provisions relating to the exercise of criminal jurisdiction by a Judge in this Court and we have necessarily to look to the Rajasthan High Court Ordinance, 1949.

6. Sections 17 to 21 of this Ordinance deal with the civil jurisdiction of the High Court. Sections 22 to 27 make provisions for the criminal jurisdiction of the High Court. Section 22 provides for the extraordinary original criminal jurisdiction of the High Court over all persons residing in places within the jurisdiction of any Court subject to the superintendence, and it shall have authority to try at its discretion any such persons brought before it on charges preferred by any Magistrate or other officer specially empowered by the Government in that behalf. Section 23 lays down that there shall be no appeal to the High Court from any sentence or order passed or made in any criminal trial before the Court, in extraordinary original criminal jurisdiction, may be constituted by one or more which Judges of the High Court. But it shall be at the discretion of any such Court to reserve any point or points of law for the opinion of the High Court. Section 25 makes prevision for appeals from other criminal courts in the State. It is provided that such jurisdiction shall be subject to any law in force for the time being. The other provisions are not material.

7. Thus there is no provision for an appeal in this High Court against orders in a criminal case passed by a Single Judge of the Court. Learned Counsel for the appellants placed reliance on Golcha Investment v. S.C. Bapna : AIR1970SC1350 and he also invited our attention to some passages from K.V Rao's commentary on the Companies Act, 1956, 1957 Edn. at page 691 and onwards. So far as the Supreme Court case (supra) is concerned the appeal was against an order of a Company Judge directing advertisement of a winding-up application. Their Lordships held that the order was appealable under Section 483 of the Act. Their Lordships referred to the relevant Rule 966-A of the Bombay High Court and observed:

From this rule it is clear that appeals other than those mentioned therein are not to be placed for admission. In other words they are entitled to be admitted as a matter of course. Therefore, the appellate bench erred in summarily dismissing the appeal it was bound to entertain the appeal and dispose of the same on merits.

Their Lordships in the circumstances remanded the case to the High Court In our view this case is not helpful. From the passage in K.V. Rao's commentary, read to us by the learned Counsel, it is evident that the Punjab High Court in Sansar Chand and Ors. v. Punjab Industrial Bank Ltd Lahore ILR 10 Lah 806 had taken the view that the expression ' In the same manner subject to the same conditions occurring in Section 202 of the Indian Companies Act 1913 (more or less analogous to the provisions of Section 483 of Act) regulates the procedure in appeal and did not detract from the existence of the right of appeal conferred by the earlier part of the section. On the other hand the Calcutta High Court has not shared this view. Vide Levy Brothers and Knowles, Ltd. v. Subodh Kumar Dey CWN XXXI 894 and Madan Gopal Daga v. Sachindra Nath Sen ILR 55 Cal 262 We find ourselves in agreement with the Calcutta, view

8. We are further of the view that it is not each and every order passed by the Company Judge that would be appealable under Section 483 of the Act. But it is such order as may determine any right or liability that could be made the subject matter of an appeal. In the present case the appellants are on trial and their liability, if at all, has yet to be determined The order passed by the learned Company Judge is nothing but an interlocutory order The order of the learned Company Judge cannot be said to take away any of the fundamental rights of the appellants. In other words, it does not determine any right as such. If we look to the Code of Criminal Procedure it is only certain orders that are made appealable, for example, in the course of a trial it is the order of conviction and sentence or one of acquittal that are made appealable. Interlocutory orders may be subject matter of revision but not of an appeal.

9. Learned Counsel for the appellants also referred us to Section 624B of the Act, which makes provision for an appeal against acquittal. He read the section with a view to show that the Act itself has made provision for orders against acquittal and if Criminal Procedure Coda were to apply as such, the provision would be unnecessary. We are unable to agree Section 624B empowers the Central Government in any case arising under this Act to direct any Company prosecutor or to authorise any other person either by name or by virtue of his office to present an appeal from an order of acquittal passed by any court other than the High Curt. But for this provision such appeals would be governed by Section 417, Cr P C. and, therefore, if the Legislature wanted to confer powers on the Central Government to direct the filing of appeals, it was necessary to lay down as has been done. But one thing is note worthy in this section that the provision for appeal has been made for courts other than a High Court. That again confirms us that the Legislature did not intend to provide for an appeal against orders of acquittal by the Company Judge in the High Court.

10. Having considered the matter, therefore we are satisfied that the appellants have no right to appeal.

11. The appeal is, therefore, hereby rejected.

12. The learned Counsel for the appellants orally prayed for grant of a certificate for appealing to the Supreme Court Since the case is pending trial and the order passed by the learned Company Judge is considered by us to be only an interlocutory one, there is no case for grant of a certificate as prayed for either under Article 133, if the proceedings were civil, as the Learned Counsel submits they are, or under Article 134 of the Constitution, if the proceedings are criminal, as we think them to be. The prayer for grant of certificate is, therefore, refused.


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