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Rajah of Vizianagaram Vs. the Official Liquidator, Vizianagaram Mining Company Limited, Vizagapatam - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Case NumberA.A.O. Nos. 80 of 1948, 249 to 252 of 1949 and 103 of 1950
Judge
Reported inAIR1952Mad136; (1951)1MLJ535
ActsCompanies Act, 1913 - Sections 109(1), 228, 230 and 271(3); Limitation Act, 1908 - Sections 19; Code of Civil Procedure (CPC) , 1908 - Sections 34
AppellantRajah of Vizianagaram
RespondentThe Official Liquidator, Vizianagaram Mining Company Limited, Vizagapatam
Appellant AdvocateV.K. Thiruvenkatachari, ;P. Rama Reddi and ;V. Venkatarama Reddi, Advs.
Respondent AdvocateGovt. Pleader, ;E. Venkatesam, ;E.L. Bhagiratha Rao and ;C.V. Dhikshitalu, Advs. and ;King and Partridge
Cases ReferredBanco De Portugal v. Waddell
Excerpt:
company - winding up - sections 109 (1), 153, 228, 230 and 271 (3) companies act, 1913, section 19 of limitation act, 1908 and section 34 of code of civil procedure, 1908 - whether foreign creditors were allowed to prove their claims in winding up proceedings - company was single legal entity and question of domicile of creditors was irrelevant - court dealing with principal liquidation bound to make provision for creditors from all over world and give them opportunity of being heard - as per section 228 foreign creditor not excluded from winding up proceedings - under section 153 compositions during winding up proceedings open to foreign creditors - no distinction made in matter of distribution of assets between creditor who was resident in place where winding up proceedings going on and.....govinda menon, j. 1. all these appeals arise out of the winding up proceedings of the vizianaga-ram mining company, limited, which had been incorporated and registered under the companies act then in force in england on 8-12-1894; the main location of its business was in the vizagapatam district of the then presidency of madras, where various minerals were mined by the company. its principal place of business for the address to be given under section 277 of the companies act was kodur. in that company, the rajah of vizianaga-ram was a share-holder and he had also leased out to the company the lands on which the mining was going on under three separate leases. while matters were in this state, o. p. no. 25 of 1946 was filed on the original side of this court by the rajah on 29-1-1946, for.....
Judgment:

Govinda Menon, J.

1. All these appeals arise out of the winding up proceedings of the Vizianaga-ram Mining Company, Limited, which had been incorporated and registered under the Companies Act then in force in England on 8-12-1894; The main location of its business was in the Vizagapatam District of the then Presidency of Madras, where various minerals were mined by the Company. Its principal place of business for the address to be given under Section 277 of the Companies Act was Kodur. In that company, the Rajah of Vizianaga-ram was a share-holder and he had also leased out to the company the lands on which the mining was going on under three separate leases. While matters were in this state, O. P. No. 25 of 1946 was filed on the Original Side of this Court by the Rajah on 29-1-1946, for winding up the company, which was ordered on 6-3-1946- Thereafter, further proceedings relating to the winding up were transferred to the District Court of Vizagapatam and the petitions out of which the above appeals have arisen were taken in the said District Court. On 11-7-1950, in Application No. 732 of 1950, the proceedings have been re-transferred to the Original Side of this Court and we are informed that the Official Receiver, Madras is now in charge of the liquidation proceedings. C.M.A. No. 80 of 1948 and C.M.A. No. 251 of 1949 go together, and the other appeals viz., C.M.As. 249, 250 and 252 of 1949 can also be considered together.

2. We will first of all consider the main appeal, viz., C.M.A. No. 249 of 1949, This arises out of LA. 135 of 1948, in which the petitioner, the Rajah of Vizianagaram, was the third creditor and the respondents 2 to 9 were the foreign creditors. The Rajah of Vizianagaram applied to the lower Court for an order that the proof of the foreign creditors be expunged and that their names be deleted from the certificate of the Official Receiver filed under Rule 90 of the Indian Companies Rules. The learned District Judge', on a consideration of Section 271 of the Indian Companies Act as well as the arguments addressed to him, came to the conclusion that the foreign creditors are entitled to prove their claims in liquidation proceedings under Part IX of the Indian Companies Act and therefore dismissed the application. C.M.A. No. 249 of 1949 is by the Rajah of Vizianagaram against the order dismissing LA, No. 135 of 1948.

3. C.M.A. No. 250 of 1949 arises out Of an application by one of the foreign creditors, viz., S. A. Belgi Menare Et. Commerceale filed under Section 183 (5) of the Act and Rule 85 of the rules framed thereunder, praying that the order of the Official Liquidator rejecting their claim be set aside and the claim be allowed in full. After setting aside the order of the Official Liquidator the learned District judge allowed the claim of this creditor to the extent of the principal loan subsisting, via., 9,500. The Rajah of Vizianagaram appeals in C.M.A. 250 of 1949, against the allowance by the District Judge of this claim.

4. C.M.A. 252 of 1949 arises out of LA. No. 124 of 1948 in which the petitioner was one Arthur Stanley Lindley, who applied under Section 183 (5) of the Indian Companies. Act against the order of the Official Liquidator rejecting his claim for a sum of 746-1-2 on the ground that it was time-barred. The learned District Judge found that the sum of 746-1-2 was included in the sum of 4,897-7-7 mentioned in the balance sheet Ex. p-1, and that the sum was admitted in the affidavit submitted by Mr. John Hawking in support of the application. He, therefore, held that there was no bar of limitation. The Rajah of Vizianagaram appeals against this order by C.M.A. 252 of 1949.

5. C.M.A. 80 of 1948 arises out Of LA. No. 225-of 1946 by which the Rajah of Vizianagaram applied for an order of delivery of certain lease-hold properties; for the sale of certain machinery, etc., and for permission to levy distraint. The learned District Judge found that the Rajah as the lessor, was entitled to re-enter, that is to say the Official Liquidator should not sell any lease-hold right as being as asset of the company; but that the actual re-entry will be postponed for 'a period of 6 months or until further orders till the Official Liquidator completes the liquidation. It was also held that the Rajah was entitled to enforce the right of pre-emption, but only with regard to particular things comprised in the clauses in particular leases for which a Commissioner was appointed. Against the disallowance of the distraint in respect of rents, C.M.A. 80 of 1948 has been preferred.

6. C.M.A. 251 of 1949 is against the order in LA. No. 136 of 1948 which was an application by the Rajah under Section 183 (5) of the Act and Rule 85 of the rules framed thereunder praying that the Court may vary an order of the Official Liquidator-dated 13-1-1948, by adding back to the proof of the applicant as creditor the sums disallowed by the Official Liquidator. The learned District Judge modified the order of the Official Liquidator by allowing a further sum of Rs. 2,189-6-5, but in other respects the order of the Offiical Liquidator was confirmed; but pennission was granted to the Rajah to file a suit for a declaration that the acts of the Court of Wards in allowing remissions to the Vizianagaram Mining Company, will not bind him, and if he succeeds in that suit, to prove his claim, for those amounts.

7. C.M.A. 103 of 1950 is connected with C.M.A. 250 of 1949 and is against the disallowance by the District Judge in LA. No. 126 of 1948 of a sum of. 3,358/- claimed by S. A. Belgi Miniere Et. Commerceale as interest on 9,500/- allowed by the District Judge as due to them. In this appeal, a further question is also raised as to whether the creditor is entitled to a charge on the mineral ore quarried by the company for the sum of 9,500 due as principal and 3,358/- due as interest. The learned District Judge as mentioned already, has found that the creditor is entitled only to the extent of the principal loan subsisting viz., 9,500 without any kind of charge and disallowed the amount claimed as interest.

8. It will be useful to set out the amounts due to-the various creditors. We are informed that the second respondent in LA. 135 of 1948, viz., National Bank of India, Limited., London, creditor No. 4 claims a sum of Rs. 1,02,146-8-0; creditor No. 5, S.A. Beige Miniers Et. Commerceale claim a principal of 9,500 and an interest of 3,358, making a total of 12,858, but the amount allowed was only the principal loan of 9,500 which when converted into Indian Currency would be equivalent to Rs. 1,26,666-10-8. The fourth respondent in C.M.A. 249 of 1949, A. S. Lindley, represented by the power-of-attorney-holder, Mr. H. M. Small, Madras, who is creditor No. 8 claims a sum of 746-1-2 which in Indian Currency comes to Rs. 9,947-7-1. The fifth respondent P. J. Hawkins, claims a sum of RS. 2,266-10-1. The sixth respondent, R. H. Dunn,. creditor No. 11, claims a sum of Rs. 2,833-5-0; and the seventh respondent Gie Beige des Mines Minerals and Mutax, represented by J. S. Williams, Nagpur, claims Rs. 16,284/-. On the whole the total amounts claimed by the foreign creditors come to Rs. 2,60,142/-, and odd. The general question of law common to all the appeals is whether the foreign creditors are to be allowed to prove their claims in the winding up proceedings in India.

9. This question that has been very elaborately discussed is bereft of direct authority and the learned counsel for the appellants desires the Court to pronounce a verdict on that point by considering the principles deducible from various decisions. English and Indian cited before us. Before discussing the various authorities quoted, it would be useful to refer to the statutory provisions dealing with the winding up of an unregistered company. Section 2 (1) Clause (2) of the Indian Companies Act defines a 'company' as a company formed and registered under the Act or an existing company; and an 'existing company' is denned in Clause (7) as a company formed and registered under the Indian Companies Act 1866, or under any Act or Acts repealed thereby, or under the Indian Companies Act, 1882. The winding up of such a company is governed by the provisions of Part V of the Act containing Sections 155 to 247; and Part IX which contains Sections 270 to 276 refers to the winding up of unregistered companies, which expression, according to Section 270, shall not include a railway company incorporated by Act of Parliament or by an Indian Law, nor a company registered under the Indian Companies Act, 1866, or under any Act repealed thereby, or under the Indian Companies Act of 1882, or under this Act, but shall include any partnership, association or company consisting of more than seven members. It is in accordance with the provisions contained in Part IX that the company under consideration has been ordered to be wound up. Section 271 is important, because that deals with the winding up of unregistered companies and it says that the provisions of the Act relating to winding up of companies (Part V Sections 155 to 247) shall apply to the winding up of an unregistered company, with the exceptions and additions refered to in that section. Section 271 (3) has particular reference to the present proceedings, because it says that where a company incorporated outside the Indian Union, which has been carrying on business in India, ceases to carry on business in India, it may be wound up as an unregistered company under Part IX, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the company under which it was incorporated. Unlike the general law in winding up proceedings, by which during the course of winding up the property of the company does not become vested in the Official Liquidator so far as unregistered companies are concerned, by Section 275 the Court has power to vest the properties of the company in the Official Liquidator by his official name. This is analogous to bankruptcy proceedings where the property of the insolvent becomes vested in the Official Receiver or the Official Assignee as the case may be. The contentions put forward by Mr. V. K. Turuvenkatachari supported by a wealth or legal learning is in its enunciation, not complex. But the decision is a difficult one. According to him, the winding up proceedings of an unregistered company in India are proceedings of an independent character by which the unregistered company is treated as a separate entity for the purpose of winding up and therefore any foreign creditor of the company has no right to prove his claim in a winding up in India. The various steps in the argument can be briefly detailed as follows :

(1) A true and proper construction of Sections 270 to 276 coupled with the provisions regarding ordinary winding up would show that an unregistered company is for the purpose of an Indian winding up, a separate concern;

(2) In the winding up of such a company, it is not within the powers of the Court, or the liquidator, to get at the assets which are outside the Court's jurisdiction, and it is not possible to settle the contributories also among persons who arc not subject to the Court's jurisdiction;

(3) Such being the case, the winding up here is not as ancillary proceeding to the winding up, if there be any, in the country in which the company is registered, and therefore, if the winding up here is an independent proceeding, the creditors of the company who are resident outside India, cannot be recognised as creditors entitled to receive from the assets of the company.

10. On the other hand, Mr. Rajah Iyer for some of the foreign creditors stresses the fact that even in the case of a foreign company doing business in India, there is only one Company and not as many companies as there are places in which it carries on business, because the company is a single legal entity carrying on business in a number of branches. If that argument is accepted, then Mr. Rajah Ayyar says in finding out the creditors of such a company, the question of the domicile of the creditors is Irrelevant. It is open to find out who the creditors of that single company are. In the case of an ordinary creditor, the monies due to him can be realised from the assets of the company, wherever they may be, but the question in what way the creditor can realise it depends upon the law of the country where the assets are situated. If that were' so, though the company is registered in England and is carrying on business in India, by the application of Part IX of the Companies Act, when it is wound up, it is open to the creditors resident outside India, to prove, in such liquidation proceedings, what is due to them. But it is pointed out by the learned counsel for the appellant the Rajah that in the present case there are no liquidation proceed-jngs in the place where the company is registered and therefore a foreign creditor can get his debts proved in India and realise the dividends here, whereas at the same time he is able to file a suit for the entire amount In England and get a decree against the Company's assets there for the whole amount. The short answer to this question, according to the respondents' learned Counsel, is that if it is one and the same company and a creditor has received part of his dues by liquidation proceedings of an unregistered company in one place, he can only sue for the balance amount due to him after crediting what he has received in such liquidation proceedings. Likewise, it is conceded by the learned Counsel for the respondents that it is open to an Indian creditor, after realising a part of his dues in liquidation proceedings in India, to proceed against the company, for the balance sum, if there are no liquidation proceedings, by suing for the balance amount according to the law of the country.

11. It therefore becomes necessary to decide whether the winding up of an unregistered company which has its place of registration in a foreign country is a proceeding relating to an independent entity in which only the creditors, who are subject to the jurisdiction of the Courts in India, can prove their claim. In the treatise on Foreign Companies and other Corporations by E. Hilton Young, the learned author observes at page 182 that the law of the country in which a company is domestic determines the constitution of a foreign corporation, the legal relations of its members 'inter se' and towards the corporation, and their liabilities towards third parties. This statement is mainly based upon the decision in 'Ex parte Turner; (1850) 2 Mac & G 169 : 42 E R 65. In all common law countries, such as England and America, a Corporation lives under the law under which it has been created or 'incorporated' the law from which it 'derives its existence.' In most civil law countries, the personal law of a private law corporation is that of the state in which it has its centre or 'domicil', see The Conflict of Laws, a comparative study by Rebel, Volume 2, pages 31 and 33. Are we therefore constrained to hold that on this principle the foreign creditors of the unregistered company which is being liquidated in India are to be denied the right to prove their debts in Indian Courts? For the contention that even if the company is being wound up in the place of its origin when there is a winding up in India under Part IX of the Act, the proceedings here cannot be called ancillary to the winding up in the place of origin, Mr. Tiruven-katachariar has delved deep in the historical origin of such winding up proceedings and relies upon the dicta contained in various English cases to substantiate his argument that the foreign creditors cannot prove their claim here. 'In Re Matheson' (1884) 27 Ch D 225 was a case where a company registered in New Zealand and having its principal place of business there, but having a branch office, agent, assets, and liabilities in England, was being wound up in New Zealand and the question arose whether the English Courts can make a winding up order. Kay, J., was of opinion that the English Court had the power and in doing so he expressed the opinion that the English Courts, upon principles of International comity, would no doubt have great regard to the winding up order in New Zealand and would be influenced thereby. But the mere existence of a winding up order made by a foreign Court did not take away the right of the Courts in England to make a winding up order, though it would no doubt exercise an influence upon the English Courts in making the order.

12. North, J., in 'In Re Commercial Bank of South Australia', (1886) 33 Ch D 174 had to consider the case of a company which was registered in Australia and being wound up there. Since it was carrying on business in England also, the question arose whether it could be wound up in England and the learned Judge observed thus :

'I think, therefore, that the English creditors are entitled to have a winding up order made by this Court. I dp not think it would be right to insert any special directions in the order; this is :iot the proper time for giving such directions. But I will say this, that I think the winding up here will be ancillary to a winding up in Australia, and if I have control of the proceeding here, I will take care that there shall be no conflict between the two Courts, and I shall have regard to the Interests of all the creditors and all the contributories, and shall endeavour to keep down the expenses of the winding up so far as is possible. I think it clear that there is Jurisdiction to make a winding up order......'

13. Observations of Kay, J., in 'North Australia Territory Co. v. Goldsbrough Mort, & Co., Ltd.', (1890) 61 L. T. 716 have been very much sought in aid by the learned Counsel for the appellants. At page 717 of the report Kay, J., states;

'In Australia an order has been made for a compulsory winding up. According to our law such an order might be' done, but in the case of an Australian Company it would be confined to the property existing in this country, and would only be by way of assisting a winding up which either was going on or was contemplated in Australia. It would be only to protect the property in this country, and the creditors In this Country. That would be the only purpose of such an order.'

In 'Re Federal Bank of Australia, Limited (1893) 68 L. T. 728 the judgment of William, J., in the Court of First Instance, following the observations of North, J., in 'In Re Commercial Bank of south Australia, (188C) 33 Ch D. 174 contains similar observations, what should be the proper procedure when a company is being liquidated in more than one place, viz., at the place of its origin and its branches outside, has been laid down by Vaug-han Williams, J., in 'In re English Scottish and Australian Chartered Bank, (1893) 3 ChD 385 the learned Judge says that where there is a liquidation of one concern the general principle is, ascertain what is the domicil of the company in liquidation; let the Court of the country of domicil, act as the principal Court to govern the liquidation; and let the other Courts act as ancillary, as far as they can, to the principal liquidation. He further expressed the opinion that the Court dealing with the principal liquidation is bound to make provision for creditors in ail parts of the world coming in and being heard If they think fit. Since the learned Judge held that the Court dealing with the principal liquidation should make provision for creditors In all parts of ihe world, are we to take it that the Courts where ancillary proceedings are going on are not justified in making provision for the entire body of creditors of the Company but only for such of the creditors as are within the jurisdiction of the Court conducting the ancillary liquidation? The foreign cases so far discussed envisage a principal liquidation and ancillary proceedings. But they do not give any definite guidance as to what the powers and duties of a Court conducting ancillary liquidation proceedings are. By the time we come to the case in 'New Zealand Loan and Mercantile Agency Co. v. Morri-son' (1898) A C 349. It looks as if, according to the learned Counsel for the appellants there was a change in the approach to the question, as may be seen from the observations of Lord Davey that a scheme of arrangement sanctioned by an English Court with regard to a Joint Stock Company which is being liquidated in England but which has branches in the colonies cannot be pleaded by the company in a colonial Court as a defence to an action by a non-assenting creditor for the full amount of the claim. For the elucidation of the present point it is difficult to flnd any helpful observation in the judgment. But the difference between bankruptcy proceedings and winding up proceedings is stressed by the Hon'ble Lord when he states that in cases of bankruptcy the whole property of the bankrupt is taken out of him whilst in the case of winding up the property remains vested in title and in fact in the company, subject only to its being administered for the purposes of the winding up under the direction of the English Courts.

14. We have next to consider the judgment ofMaugham, J., in 'In re Vocalion (Foreign) Limited(1932) 2 Ch 196 as well as the speech of Lord Atkinin Russian and English Bank v. Baring Brothers &'Co', (No. 3) (1936) A.C. 405 on both of which thelearned Counsel for the appellants placed muchreliance. After considering the earlier authorities.Maugham, J., stated as follows at page 206 :

'Finally it must be remembered that there may bewinding up orders made in the foreign countrywhere the company has carried on business andpossesses assets. The view of this Court is that theprincipal winding up should be in the principaldomicil of the Corporation, and that any otherwinding up order should be ancillary to theprincipal winding up....The effect of one windingup being ancillary to the principal winding up has not, I think, been much considered in our Courts. This Court no doubt holds that in the winding up here all creditors, whether British or foreign, who can prove their debts have equal rights; but it would seem that foreign Courts do not always take the same view........If thereare two winding up orders, one here and one abroad, it would seem to be impossible to contend that a foreign creditor is not to be allowed to prove his debt abroad, and, if the 'lex fori' permits it, to bring an action abroad.'

It is doubtful whether the following observations of Lord Atkin at page 428 really mean that foreigncreditors cannot prove their debts in liquidationproceedings in an English Court:

'But if the corporation does trade here, acquiresassets here and incurs debts here, we shall notaccept its dissolution abroad without a stipulationthat if desirable it may be wound up here so thatits assets here shall be distributed amongst itscreditors (I do not stay to consider whether itsEnglish creditors or creditors generally) and forthe purpose of the winding up it shall be deemednot to have been dissolved; for that event woulddefeat our municipal provisions for winding up acorporation.'

Some of the learned Law Lords especially Lord Russet of Killowen and Lord Maugham did not see eye to eye with Lord Atkin in most of the conclusions arrived at by him. In this state of conflicting views expressed by the House of Lords, however much one might have respected the great eminence of Lord Atkin, this Court cannot follow preferentially his observations, which are far from being unanimously accepted by the other Law Lords. One finds it difficult to construe the reasoning of Wynn-Parry, J., in 'Re Suidalr International Airways Ltd. (1950) 2 All. E. R. 920 relying Upon the dictum of Vaughan Williams, J., in 'In re English, Scottish and Australian Chartered Bank (1883) 3 Ch 385 as tending to take a view that in ancillary liquidation proceedings, a foreign creditor cannot prove his debt. If at all, the learned Judge's observations can be understood as justifying the view that foreign creditors will have the right to prove their debts.

15. I have already referred to the contention advanced on behalf of the respondent that in cases where a foreign company is carrying on business in India, though its principal place of incorporation is elsewhere, there is only one legal entity and no separate company as such and if there is only one company, the creditors all over the world of such a company are creditors in so far as it carries on business in India and the position of an ordinary creditor is that he can realise the amount due from out of the assets of the company wherever they may be, and whether the creditor can realise his debt depends upon the law of the country where the assets are, i.e., the principle of 'lex fori' determines the method of such realisation.

16. That a foreign company which does business in England in such a way as to be resident there may be sued there and a writ may be served on its officer there is clear from the decision of the House of Lords in 'La Compagnie Generale Trans-Atlantique v. Thomas Law & Co.' (1899) A. C. 431 and Indian Law as formulated in Section 20 of the Code of Civil Procedure contemplates such a suit. See also Clause 12 of the Letters Patent of the High Court. If a foreign creditor can file a suit for the realisation of the amounts due to him, is there anything which prevents him from applying for liquidation of a foreign company which carries on business in India? in that respect we have to consider Sections 162 and 163 and 166 of the Indian Companies Act read with Section 271.'Moreover, Sections 169 and 171 of the Act restrain-the further proceedings in any suit, or the filing of a suit, when there are liquidation proceedings, and therefore if a creditor is prevented from filing a suit, it is contended that in liquidation proceedings, by the combined application of Sections 169 and 171, he is unable to apply for the payment of the dividends in such proceedings. The further question as to whether a foreign creditor can be deemed to be a creditor within the meaning of the Companies Act can be determined by a reference to various provisions of the Act. Our attention was invited to very many provisions of the Companies Act, Sections 58, 59, 60 and 64, 153, 163, 166, 167,. 169, 171, 173 and 174 as well as to Section 177-A on-wards. The fasciculus of sections beginning with Section 221 may also be referred to. Section 228 mentions all the debts and does not exclude a creditor resident in a foreign country and Section 271 expressly states that all the provisions in Part V shall apply with the exceptions and additions contained in Part IX. One has necessarily to say that if under Part V a foreign creditor can come in and apply for payment of this debt, then there is nothing to prevent the application of the same law even with respect to winding up proceedings, under Part IX.

17. The entire discussion so far has proceeded upon the likeness and similarity between the provisions of the English law as well as those of the Companies Act and both the learned Counsel have conceded that if under the English law it is possible for a foreign creditor to claim payment when a foreign company Is wound up in England under the provisions of the English Companies Act, then in India also it is possible. That Js why we have taken pains to discuss at some length the various decisions of the English Courts as well as the observations contained therein.

18. Now let us see how the text-book writers in England as well as in India have dealt with the question. In Palmer's Company Law, nineteenth edition, at page 379, in dealing with the question as to who is a creditor, the learned author does not discriminate between an English creditor and a foreign creditor. At pages 379 and 380 the various categories of persons who can claim to be creditors have been enumerated and there is no discussion there that a creditor resident in a foreign country is excluded from consideration. We may also refer to Indian authors such as Ghosh and Vehkoba Rao, who also have discussed this-question. At pages 353 and 359 of Indian Company Law by Ghosh and at pages 604 and 605 of Indian Companies Act by Ven-koba Rao, the question is discussed and nowhere-has any of the learned authors attempted, or even suggested, the discrimination of foreign creditors with regard to the winding up of a company under Part IX. Text book writers on international law such a Cheshire and Dicey have also expressed the opinion from which one can gather the impression that foreign creditors are not excluded.

19. By way of analogy, it will be useful to refer to the position in case of bankruptcy, where an individual is declared bankrupt and his assets vest in the official Receiver or Official Assignee, is it open to a creditor in a foreign country to prove-his claims in the insolvency proceedings either in England or in India? In this connection, it maybe helpful to refer to a few passages both in Private-International Law by Cheshire third edition and Dicey's Conflict of Laws, sixth edition at pages 632 and 647 in the former and at pp. 330, 331, and 809 in the latter. That a foreigner Js entitled to prove in an English and an Indian Bankruptcy even though the debt which he claims is contracted abroad, is clear from the above citations. That a foreign creditor will be allowed to prove his claim in bankruptcy in England with regard to a debt contracted abroad with the sole restriction that he must bring into account the part of the assets which he has got hold of in a foreign country, as only one estate is being administered, is clear from Ex parte Wilson; 'In re Douglas (1872) 7 Ch A 490 'Banco De Portugal v. Waddell', (1880) 5 A. C. 161 and 'Wiskemann In re (1923) 92 L J Ch 349. Mellish, L.J., at page 494 of (1872) 7 Ch A 490 observes that it is not a case where there are two distinct Estates, one being administered by the law of Brazil and another administered by the law of England, but that it is a case in which the same estate is being distributed, partly in Brazil and partly in England, but where the Brazilian Law says that a certain class of creditors are to have a preference and where the Law of England says that all creditors should take equally. In those circumstances Mellish, L. J., was of opinion that there was nothing to prevent the application of the common rule that if a creditor comes to take the benefit of the English Law and proves against the English Estate, he cannot take advantage of the preference that he has received under the law of a foreign estate. This decision was approved by the House of Lords in 'Banco De Portugal v. Weddell1, (1880) 5 A C 161. To the same effect are the observations of P. o. Lawrence, J., in 'In re Wiskemann (1923) 92 L J Ch 349. See also 'In re Nelson; Ex parte Dare and Delphin, (1918) 1 KB 459 . If further authority on this part of the discussion is necessary, one may also refer to Halsbury's Laws of England, Hailsham Edn. Vol. 11, page 278, paragraph 367. It is therefore unmistakably clear that in insolvency or bankruptcy proceedings, a foreign creditor has the right to prove his claim in England or in India, as the case may be, but the only restriction that is imposed upon him is that he should bring into account the assets realised by him in the foreign country. That the principle applicable is the same when the estate of a deceased person is being administered is also clear from authorities. In the administration of the English estate of a deceased domiciled abroad, foreign creditors are entitled to dividends part passu with English creditors, vide, In 're Kloebe, Kannreuther v. Geiselbrecht', (1883) 28 Ch D 175.

20. Section 153 of the Indian Companies Act deals with compositions and power to compromise with creditors and members during the course of the winding up of a company and Indian decisions are to the effect that in such cases it is open to the foreign creditors also to join in such composition. See the observations of Venkataramana Rao, J., in 'In re Travancore National & Quilon Bank Ltd.' A.I.R. 1939 Mad 318 where the learned Judge says that all endeavours should be made, as far as possible, to secure equal distribution for all creditors, British, Indian or foreign, see also 'Mohan Lal V. Chawla Bank Ltd.', : AIR1949All778 and a recent judgment in 'In re Frontier Bank' A.I.R. 1951 Simla 145. We find observations akin to the above view point in Buckley on the Companies Act, Twelfth Edition, at pages 404 and 407. The learned author at page 407 refers to 'New Zealand and Mercantile Agency Co. v. Morri-son' (1898) A .C. 349. We may also refer to various statements at pages 731, 736 and 738.

21. The preponderance of authority therefore is to the effect that no distinction can be made in the matter of the distribution of assets between a creditor resident in the place where the winding up is going on and a creditor resident abroad. But Mr. Tiruvenkatachariar contends that equal treatment can be meted out only if the company is wound up in the place where it has its principal seat and not where as ancillary liquidation, as it were, is being conducted as under Part IX of the Indian Companies Act. Having given the matter our earnest consideration, we find it very difficult to accede to the very ingenious and learned arguments on which Mr. Thiruvenkatachariar sought to rest his contention, as he himself stated that the point raised by him is bereft of direct authority; and while it does credit to his ingenuity, we feel constrained to hold that the argument is unacceptable.

22. We are pressed with passages occurring at pages 333 and 334 of Dicey's Conflict of Laws, sixth edition, where the learned author in Rule 58 concerning the winding up mentions that the winding up of a Company under the Companies Act of 1948 impresses the whole of the property of the company in the United Kingdom with a trust for the application, in the course of the winding up, for the benefit of persons interested in the winding up. The case of a winding up of a company not registered in England, according to the learned author, stands on a different footing, such a winding up can deal only with the corporate character of the company in England, and it does not appear that in such a case in the distribution of the effects, any regard can be had to matters affecting the company outside the United Kingdom. At page 294 it is also stated that the effect of the winding up of such a company by the Court ia merely to terminate its existence as a company so far as England is concerned. A very learned article at page 31 of the journal portion of (1945) 1 M.L.J. relating to Foreign Companies deserves a perusal with profit; but even there, in the very exhaustive discussion of the case law we do not find anything definite regarding the question now raised before us. Our attention was also drawn to passages in 'In re Russo-Asiatic Bank,' 'In re Russian Bank for Foreign Trade' (1934) 1 Ch 720 as also to 'Bank of Ethopia v. National Bank of Egypt and Liguori' (1937) 1 Ch 513 and 'Baxnco de Bilbao v. Rey' (1938) 2 K. B. 176. These authorities recognise that if there is a winding up of the company in the place where it is registered, that is in the place of its origin, such a winding up will be recognised in other parts of the world. But all these cannot help the elucidation of the question under consideration. The underlying principle in some of the other cases referred to viz. 'Red Eastern Telegraph Co. Ltd.', (1947) 2 All E R 104 and 'Employers' Liability Assurance Co. v. Sedg-wick Collins & Co.' (1927) A. C. 95 is to the effect that it is the duty of the liquidator to ascertain all the creditors of the company. That being so, it seems to us that even where there is a winding up under Part IX of the Indian Companies Act, the liquidator appointed has to find out the entire body of creditors wherever they may be resident.

23. We have further to consider another branch of the argument relating to the situs of the debt. It is the contention of the learned counsel for the appellant that even if In proceedings for winding up under Part IX creditors resident in foreign countries can be recognised, still their debts should have some relation to the business of the company in India where it is being wound up. In other words, what he contends is that the situs of the debt should not be outside the jurisdiction of the Indian Courts. That means that if the debt was incurred by the company for purposes outside India, such a debt cannot be recognised in the winding up proceedings here. Para 779 in Halsbury's Laws of England, Hailsham Edition, Vol. 4, dealing with the caption 'where company is debtor' wherein occurs an observation that 'the company may, however, have localised its obligation to the creditor by the course of its business.' and the cases given in the footnote were brought to our notice. The arguments of the learned counsel in the case in 'Busso Asiatic Bank, In re; Russian Bank for Foreign Trade, In re', (1934) 1 Ch 720 to the effect that in that particular case, the debt must be deemed to be in Russia for the reason (i) the locality of the debt of a bank with several branches is the place where it is to be discharged; (ii) on the true construction of the documents the debt was an obligation of the head office; and (iii) the contract was made in Russia, and no negotiations were ever carried on through the Branch house in London, were sought in aid for the contention regarding the situs of the debt. Though there are stray sentences here and there in the judgment of Eve J., regarding the situs of the debt, it seems to us that there are no explicit declarations which can be considered as a guiding principle in a matter like this in that judgment, other cases relied upon for this branch of the argument are 'Rex v. Lovitt', (1912) A C 212 'New York Life Insurance Co. v. Public Trustee', (1924) 2 Ch 101 a well known case, 'English Scottish and Australian Bank Ltd. v. inland Revenue Commissioners' 1932 AC 238 and 'British Columbia Electric Rly. Co., Ltd. v. The King', (1946) A C 527 'In Rex v. Lovitt', (1912) AC 212 their Lordships of the Judicial Committee were dealing with the actual situs of the property which consisted of simple contract debts, and as such could have no local situation other than the residence of the debtor where the assets to satisfy them would presumably be. Their Lordships observed at page 219 that although branch banks are agencies of one principal firm, it is well settled that for certain special purposes of banking business they may be regarded as distinct trading bodies. In the well known case in 'New York Life Insurance Co. v. Public Trustee' (1924) 2 Ch 101 the construction in the peace Treaty of Versailles regarding property rights and interest of German nationals was the point at issue and in the discussion Pollock M. R. observes at page 111:

'Then how is the determination to be reached whether they are to be treated as subject to the present jurisdiction, so that it may be said that the debt is due from the plaintiffs as being resident here, inasmuch as the debtors reside both in London and in New York? It seems to me we are entitled, in those circumstances, to look at the terms of the contract, and to determine from them what, for this purpose, is to be the place in which, and at which, the debt would be recoverable.'

The case in 'English, Scottish and Australian Bank Ltd. v. Inland Revenue Commissioners' (1932) A C 238 related to the stamp duty leviable on an agreement for sale of simple contract debts owed by debtors resident abroad and it was held that an agreement for sale of simple contract debts owed by debtors resident out of the United Kingdom is exempt from 'ad valorem' stamp duty in respect of such debts upon the ground that they are 'property locally situate out of the United Kingdom', The case in 'British Columbia Electric Rly. Co. Ltd. v. The King', 1946 A C 527 also deals with a matter relating to revenue and the question regarding residence as test of a Canadian debtor. The observations of Viscount Simon at page 537 regarding 'who is a Canadian debtor' also deal with the case of an incorporated company, and it is there said that in the case of an incorporated company the test -was the place of the incorporation of the company and not its place of residence as understood in the law relating to companies, i.e., the place where the company had its 'head and seat'. A careful reading of all the decisions above referred to does not show that in the matter of winding up the question as to where the debt was Incurred has assumed any importance: If, as we have held, all the creditors of the company have to be recognised as being entitled to be paid out of its assets, the location or the place where the debts were incurred cannot be considered as a prime factor. The situs of the debt becomes important only with regard to administration and succession -- See Dicey's Conflict of Laws, pages 303 and 307 where the situation of property is discussed. See also Private International Law by Cheshire, third edition at pages 595, 597, 599, 602, 608 and 612.

24. It was further contended that in fixing con-tributories of a company that is being wound up, it is only those who are resident in India that can be made to contribute for the debts and conversely with regard to creditors resident outside, they cannot be entitled to prove their claims here. A judgment of this Court in Application No. 1847 in O. P. No. 158 of 1938 as well as the decisions in 'In re Calcutta Jute Mills Co. Ltd.' 5 Cal 888 and 'In re Strauss & Co., Ltd.' A.I.R. 1937 Bom 15 were referred to. We do not think that anything useful can be derived from these authorities for the determination of the present question. It seems to us that the Privy Council in 'State Aided Bank of Travancore Ltd. v. Dhrit Ram' (1942) 2 M.L. J. 256 while holding that where a bank was incorporated in Travancore and a fixed deposit was made with that bank by a creditor resident in Bombay by remitting the money in the bank's account in another bank in Bombay, the place where the-contract was made as well as where the contract was to be performed was Travancore and the law of that State governs the transaction, did not lay down that in the matter of a winding up the situs of the debt should be taken into consideration in liquidation proceedings under Part IX of the Indian. Companies Act.

25. It is contended by the learned counsel for the Rajah of Vizianagaram that the Belgian Company which is the contesting respondent in C. M-A. 250 of 1949, the appellant in C. M. A. 103 of 1950 cannot claim either the amount of the princi' pal loan or the interest because the whole liability, if it existed, was barred by limitation. On the other hand, counsel for the company aSks us to hold that by various letters and proceedings, the bar of limitation is saved and points out that Ex. P-7 dated 23-6-1937, a letter from the Vizianagaram Mining Co. to S. A. Beige Mineral Commerceale, Brussels, Belgium acknowledges the liability and as such for three years thereafter the claim cannot be barred . In that letter a director in the Vizianagaram Mining Co., must be deemed to have admitted the existence of a liability. Therefore we may take it that till 23-6-1940, the creditor's claim will not be barred. Ex. P-14 is a copy of a letter dated 20-44946 in which the Vizianagaram Mining Company through its director and Secretary states that a sum of 9500 is still subsisting as a loan in the name of S. A. Balge Minere at Commerciale. But the hiatus between June 1940 and April 1946 has not been explained. If the claim was barred after June 1940, the fact that there was an acknowledgment of liability in April 1946 will not resus-ciate a barred claim because under the Indian Law an acknowledgment can be only of a subsisting-liability. But it is contended by Mr. Dikshitulu that from June 1940 till 1st April 1946, Belgiam was an enemy occupied country and therefore according to the provisions of Section 3 of Ordinance XXXIII of 1945 the period of limitation is sus-pended and such being the case the claim is not barred by limitation. Though the liquidation was ordered by this Court on 6-3-1946, the application was filed on 29-1-1948 and therefore if at that time the debt was subsisting then there is no difficulty with regard to the proof of it. The learned District Judge refers to Ex. P-16 also where the provisional liquidator is said to nave acknowledged the liability, but neither Ex. P-14 nor Ex. P-15 can revive the liability if it was not subsisting after June 1940. Our attention was drawn to Ex. P1 filed in I. A. 124 of 1948, dated 6-10-1944, which is a report of directors of the Vizlanagaram Mining Company for the year ended 31-12-1943, where among the liabilities there is an entry 'Sundry Creditors, London, 17541.'. We are told that the sum of 9500 is included in this sum of 17541. That is proved by the affidavit of one of the directors. It is further contended that in accordance with the decisions in 'Jones v. Bellegrove Properties Ltd.', (1949) 2 K. B. 700 such a statement in a balance sheet would be sufficient to save limitation. The learned Counsel, for the Rajah invites our attention to Mitra's Law of Limitation and Prescription, Volume 1, page 180, seventh edition, as well as to a decision of this Court in 'Tripura Bunda-ramma v. Abdul Khadar1, 56 Mad 490 to the effect that equitable considerations have no place in considering questions of limitation. It was also argued that even though Belgium became an enemy occupied country from May 1940, still, there was a Custodian of Enemy property in England who could have filed a suit for the recovery of the amounts due in England against the Vizianagaram Mining Co., and as such it cannot be said that there was any suspension of limitation by reason of hostilities existing between Germany and England while the former forcibly was in possession of Belgium. The application of Section 3 of Ordinance XXXIII of 1945 as well as the question whether the claim was subsisting after June 1940 had not received consideration at the hands of the learned Judge. We feel that the question of limitation has to be considered more fully and further points have to be elucidated before the claim is allowed. In such circumstances, it seems to us that the order of the learned Judge in L A. No. 126 of 1948 allowing the claim for the principal of . 9500 cannot be justified. The order of the Lower Court to the extent of allowing . 9500 is set aside and I. A. 126 of 1948 is remanded to the lower Court for fresh disposal In the light of the observations contained in this judgment. The parties are at liberty to adduce iresh evidence if necessary.

26. C. M. A. 103 of 1950. Even granting that the claim of . 9500 is barred by limitation the question still remains whether the appellants are entitled to . 3358 claimed as Interest. There is no document produced evidencing an agreement to pay interest; but Mr. Dikshitulu contends that Para 1 of Ex. P-6 wherein a director of the Vizianagaram Mining Co., states that interest at the rate of 5 per. cent per annum is payable on a sum of . 14000 fixed as due on 1-7-1936 shows that there is an agreement to pay interest. We are not satisfied that the sum of . 14000 referred to therein has anything to do with . 9500 claimed now. The learned Counsel has not been able to bring to out' notice any other piece of evidence from which it can be Inferred that interest at 5 per cent is agreed to be paid and we also observe that the question regarding interest did not seem to have boomed large in the proceedings before the lower Court. Moreover, if during the period when Bel-glum was under enemy occupation the company could not have sued for the amount due to them as they were detained in any occupied country, in the words of Section 3 of Ordinance XXXIII of 1945, then it stands to reason that the debtor in India could not also have paid the amount to the creditor as the latter was in enemy occupied country. Under such circumstances, it cannot be said that the debtor, who, though he would have been ready and willing to pay the amount still for no fault of his was unable to pay to the creditor, should be mulcted with the liability of interest running against him. This also is a consideration for refusing interest during the intervening period even if there has been an agreement to pay interest.

27. The other question which Mr. Dikshitulu. has argued is that on a proper construction of Ex. P.-12 the agreement between Vizianagaram Mining; Co., and the Societe Annonyme Eelge Minere Et. Commerciale, dated 31-12-1930, there is a charge on the ore quarried from the mines for the loans advanced and therefore the company is entitled to a preferential claim on . 9500. The learned. District Judge holds that Section 109 of the Indian Companies Act is quite clear that every mortgage or charge created after the commencement of the Act by a company be void against the liquidator unless it is registered with the Registrar of Joint. Stock Companies. Para 8 of the agreement is in, the following terms :

'The agents undertake to make advances to the company by acceptances on London payable-ninety days after date after sales have been effected as desired by them as against stocks on ore-ready for shipment and awaiting despatch on the. basis of seventy five per cent of the approximate-free on board value, the property in the ore being thereupon deemed to be transferred to the agents and held in trust for the agents by the company subject to final adjustment of the balance due when shipped.'

From this paragraph it is contended that the respondents S. A Beige Miners Et. Commerciale have a lien for all the manganese ore not disposed of at the time of the liquidation proceedings, pur attention was drawn to the various other Exhibits viz., Ex. P-2, where it is stated that with regard to stocks of ore it is clearly on record that they are. held on trust on behalf of the creditor. Relevant passages in Exs. P-3, P-4, P-5, P-6 and P 7 were also brought to our notice. We do not think that a true interpretation of these documents can show that there is any such charge as claimed, For one-thing the charge under Ex. P-12, is, if at all only against stocks of ore ready for shipment and awaiting despatch. It is not suggested that at the time of liquidation there was any quantity of ore ready for shipment and awaiting despatch. The clause implies that the quantity of ore must be on the. verge of being shipped and be stocked in godowns in a port wherefrom it has to be shipped. There is no such evidence and it is not claimed that there was ore of that description anywhere. That itself would be sufficient to disallow the claim for a charge. Moreover, even if there is a charge, it can only be a floating charge and in view of Section 109 of the Act we have to hold that the floating charge, was to be registered.

28. The learned District Judge was of opinion that every mortgage or charge created after the commencement of the Companies Act by a company will be void against the liquidator and any creditor of the company unless the prescribed particulars of the mortgage or charge together with the instrument, if, any, by which the mortgage or charge is created or evidence or a copy thereof verified in the prescribed manner, are filed with the registrar for registration in the manner required by the Act within 21 days after the date of its creation. It is urged before us that on a true and proper construction Section 109(1) (e) and (f) of the Act cannot have any application to the facts of the present case and reliance is placed upon 'In re. East Africa Hardware Co. A.I.R. 1949 Bom 262 where Tendolkar J. held that if the movable property is stock-in-trade it would not require registration for creating a mortgage or charge. The learned Judge was of opinion that in the punctuation of Clause (e) one must read after the word 'pledge' a comma in order that the clause may be properly understood and reading in that way, the result would be that a pledge would not require registration, though a mortgage or a charge on movable property would require registration provided the movable property was not stock-in-trade. We feel that the learned Judge's construction of Clause (e) is one that does not commend to us. The expression stock-in-trade at the end of the clause is intended to govern moveable property of the company referred to earlier. In our opinion what the clause contemplates is that where there is a mortgage or a charge on the stock-in-trade of a company which is moveable property of the company, such mortgage or charge requires registration. But what is exempted from registration is a pledge of moveable property of the company other than the stock-in-trade. We do not agree with the learned Judge that the preposition 'on' after the word 'pledge' is inapposite. Though in common parlance one speaks of a pledge of property, there is nothing incongruous or un-grammatical in saying that there can be a pledge on property. The word 'pledge' connotes possession as well as right and in both cases the preposition 'on' cannot be said to be inaccurate. The clause is not so inartistically worded as Tendol-kar J. seems to think, in our opinion, where stock-in-trade is made the subject of a mortgage or charge it should be registered. Otherwise the result would be incongruous that a company can create a mortgage or a charge over its stock-in-trade without registration and registration will be necessary if it has to create a charge over the other moveable. In any event the parties, if they intended to create a charge, could not be said to have done so by Ex. P-12 and the correspondence, on any property in existence at the time Ex. P-12 was executed. What was contemplated was that there should be a floating charge on the mineral ore made ready for shipment and awaiting shipment. That substance was to come Into existence on a future date and not on the date of Ex. P-12. Such being the case, the charge that was intend-ed to be created was a floating charge and would (necessarily require registration under Section 109(1). The meaning of the expression 'stock-in-trade' as contained in Stroud's Judicial Dictionary, second edition, Volume III, at page 1940, was referred to for the purposes of showing that the Manganese ore in question cannot come within the term 'stock-in-trade''. In our opinion if the Vizianaga-ram Mining company has any stock-in-trade at all, it can only be the manganese ore or other mineral ore quarried from the mines. It is not suggested that the company was incorporated for any other purpose or, that after incorporation, it was doing any other category of business. We have no hesitation in holding that the mineral ore would come within the meaning of the term 'stock-in-trade'

29. Section 277-D was also relied upon to show that no registration is necessary. In view of our interpretation of Section 109 (1) and (f) we cannot say that S, 277-D takes away the compulsory nature of the registration.

30. The above discussion proceeded on the footing that Ex. P-12 is a valid and concluded agreement between the parties, but Mr. E. Venkatesan for the Official Liquidator contends that Ex. P-12 has not been signed by anyone on behalf of the company but that it is a unilateral document to which only the Belgian Company's representative has affixed his signature. The Official Liquidator was of opinion that the agreement cannot be accepted as a concluded contract between the Vizianagaram Mining Co., and the fifth creditor, the appellant in C. M. A. No. 103 of 1950. He has given various reasons for holding that it is not a completed contract. While not disagreeing with the Official Liquidator on his conclusions, we do not wish to rest our decision on the basis that Ex. P-12 was a unilateral transaction to which the Viaianagaram Mining Company was not an assenting party, because the subsequent correspondence between the representatives of both the companies shows that there was an idea of some kind of a charge being created. For the reasons given above, it seems to us that C. M. A. 103 of 1950 has to be dismissed, but in the circumstances without costs. (31) 'C. M. A. No. 80 of 1948': In this appeal the Rajah of Vizianagaram contends that he is entitled to the payment of rents and royalties preserved by the three lease deeds, Exs. P-1, P-2 and P-3 in full in respect of the charge after 29th January 1946, being the date of the commencement of the winding up, and distraint should be allowed for that purpose. In I. A. 225 Of 1946 from out of which this appeal arises, the learned District Judge has held that the lessor is entitled to re-enter i.e., the Official Liquidator will not sell any leasehold right as being an asset of the company but the actual re-entry will be postponed for a period of six months or until further orders till the Official Liquidator completes the liquidation. With regard to the right of pre-emption claimed, that was also allowed. The Official Liquidator has allowed a sum of Rs. 10695/- being the arrears of rent on buildings at Kodur at Rs. 280/- per mensem from January 1943 till 6-3-1946 and this has been confirmed by the District Judge. The Official Liquidator also allowed royalties for the year 1943-44 in the tune of Rs, 3,111-4-3 and Rs. 1,307-6-0 respectively. On this also there is no dispute. The two other amounts, Rs. 6,709-1-0 and Rs. 5,026-2-10 allowed by the Official Liquidator are also not disputed. But what is claimed in this appeal is that the royalties for the year 1945 have not been allowed as well as the rent for the buildings at Kodur at the rate of Rs, 280/- from the date of the liquidation till the date of surrender of these properties The Official Liquidator holds that he is not liable to pay any rents on bungalows subsequent to the winding up order on 6-3-1946. The learned District Judge has not dissented from the view of the Official Liquidator. In our opinion the Rajah of Vizianagaram is entitled to claim the rent for the buildings at Kodur at the rate of Rs. 280/- per mensem from 6-3-1946 till the date of the actual surrender. In this matter the Rajah's claim is that if a landlord of a building in which the winding up process of the company is going on. He is exactly in the same position as the landlord of a building leased out to a company when the liquidator functions. We are therefore of opinion that the Official Liquidator must pay the Rajah of Vizianagaram rent for the building or Rs. 280/- per mensem from 6-3-1946 till the date by surrender. S. 230 of the Act cannot deprive the Rajah of his right to be paid rent upto the date of surrender. Mr. Venkatesam contends that with regard to the royalties for 1945 the books of the company were Inspected by the Rajah's agents and they were not able to find out that any minerals were quarried during that period and as such in the absence of any work having been turned out, the Rajah was not entitled to any royalty. Mr. Ram Reddi for the Rajah is not able to convert this statement and therefore we are not in a position to say whether any royalties were due to the Rajah for the year 1945. If the Rajah is able to show hereafter that there was any working during 1945, then he is entitled to claim royalty on that account also. Exs. P-l, P-2, and P-3 do not show that there was any rent reserved for the working of the mines except the royalty. With regard to the claim of the Rajah to distraint, we agree with the learned District Judge that he is not entitled to distraint. The result is that subject to the modifications with regard to the rent on the buildings at Kodur subsequent to 6-3-1946 and the claim for royalty for the year 1945, if It is proved, on the other points decided by the District Judge, we see no reason to differ from the District Judge. This appeal subject to the above modification, is dismissed. Each party will bear his own costs.

32. 'C. M. A. No. 251 of 1949' : What is contended here is that the District Judge should have allowed the proof in respect ol Rs. 1,13,035-3-0 and Rs. 86,673-4-9 which are purported to have been written off by the Court of Wards. The learned District Judge held that the Court of Wards had the power according to Section 35, to make remissions of rent or other dues for the advantage of the wards or for the benefit of the ward and the action of the Court of Wards in writing off these amounts is binding on the Rajah of Vizianagaram. Nothing has been proved to our satisfaction that the action of the Court of Wards is prima facie in derogation of its powers. The learned District Judge has held that it is open to the Rajah to file a suit against the Court of Wards for a declaration that its action will not be binding on nim and if he succeeds he may prove his claim for those amounts in the liquidation proceedings. Without establishing that the action of the Court of Wards is ultra vires and not binding on the ward, the Rajah is -not entitled to claim trie amounts in liquidation proceedings. We agree therefore with the District Judge that the Rajah cannot be allowed to prove the amounts in these proceedings, in our opinion the proper procedure for the Rajah to take is, if so advised, to file a suit for a declaration against the Court of Wards after due and proper notice as laid down by law and implead in such a suit, the Official Liquidator after getting the permission of the Court which has seisin of the liquidation proceedings. If, in such a suit a declaration that the writing off of these amounts was without jurisdiction and was therefore ultra vires is obtained, it would be binding on the Official Liquidator as well; having been made a party to that suit, and in that case the Rajah can prove the amounts and claim them from the Official Liquidator. We do not think that it is possible to do anything more in this appeal which is dismissed. There will be no order as to costs.

33. 'C. M. A. No. 252 of 1949': In this appeal, Arthur Stanley Lindley., the petitioner in the Lower Court claimed a sum of 746-1-2 as being due to him and the question here is one of limitation. The lower Court has held that It is included In the item of 4897-7-7 relating to sundry creditors as contained in the balance sheet Ex. P-1. In 'Jones v. Bellgrove Properties Ltd.' (1949) 2 K B D 700 the Court of Appeal held that where a balance sheet presented to the shareholders at annual general meeting of a limited liability company signed by the chartered accountants etc., contained the statement 'to sundry creditors 76381, 6s. 10 d.' and it was proved by a witness from the firm of chartered accountants which had signed the balance sheet that the debt of 1,807 owed by the company to the plaintiff was included in the sum of , 7638, 8s. 10 d. stated In the balance sheet to be due to sundry creditors, the balance sheet contained an acknowledgment to the plaintiff in writing signed by the agents of the company that the debt of 1807 at the date of the annual general meeting remained unpaid and due to the plaintiff. Therefore by virtue of Ss. 23 and 24 of the Limitation Act, 1939, the debt was held to be recoverable. Mr. Tiruvenkatachari contends that this decision should not be applied and is erroneous. On the other hand Mr. Rajah Ayyar contends that the observations of the Privy Council in 'Maniram Seth v. Seth Rupchand' 33 Cal 1047 are to the effect that the provisions of the Limitation Act in England regarding acknowledgment are more stringent than what they are in India. We have not been shown any reason why the judgment of the. Court of Appeal, should not be followed by us. Prom the affidavit submitted by John Hawkins, it is clear that , 746-1-2 is included in the debts due to sundry creditors. In these circumstances we feel that the decision of the District Judge is right and this appeal is dismissed with costs.

34. As we have held that foreign creditors are entitled to prove their claims in proceedings in liquidation under Part IX of the Companies Act, C. M. A. 249 of 1949 has also to be dismissed 'but in the circumstances without costs, in all these appeals the Official Liquidator Is entitled to reimburse himself of all expenses incurred by him out of the estate. The advocate's fee for the Official Liquidator in ail the appeals together is fixed at Rs. 1000/-.

35. CHANDRA REDDI J.: I have had the advantage of perusing the judgment prepared by my learned brother Govinda Menon J. which is through and exhaustive, and I entirely agree with his conclusions. But having regard to the importance of the main question raised in these appeals, I would like to add a few words. The facts leading up to these appeals are contained in the judgments of my learned brother. However, I shall briefly refer to them to appreciate the main question involved in these appeals.

36. A company called the Vizianagaram Mining Company was incorporated on the 8th of December 1894 in England under the old English Act, the object of the Company being to mine manganese ore and some other minerals in India. For this purpose, the company took on lease large extents of land from the Rajah of Vizianagaram in the Vizagapatam District. As required under Part 10 of the Indian Companies Act, its principal place of business in India was shown as the Kodur Mines,. Vizagapatam District. The Rajah of Vialanagaram subsequently took some shares in the company and. thus he became not only the lessor of the company but one of the share-holders therein. As the concern does not seem to have turned out to be a profitable one and the company was not in a position to pay either the rents to the lessor or its creditors, the Court of Wards on behalf of the present Rajah of Vizianagaram filed O. P. No. 25 of 1946 in this Court on 29th January 1945 for the winding up of the Company and the same was ordered on 6/3/1946 and the Official Receiver of Vishakapatnam has been appointed the Official Liquidator of the Company. Thereafter it was transferred to the District Court of Visakhapatnam for further proceedings. Subsequently on an appti-cation I. A. No. 732/50, it was retransferred to thia Court. In the winding up proceedings, all the avail-able assets of the Company in India were sold and a sum of about two lakhs of rupees was realised.

37. In these proceedings, the foreign creditors of the Company, most of whom are either the respondents or the appellants in these appeals, also filed proof of their claims before the Official Liquidator. The Rajah of Vizianagaram, who is one of the creditors of the Company in respect of the various transactions objected to the claims of the foreign creditors being entertained on the ground that the present liquidation is only for the benefit of Indian creditors and that the foreign creditors are not entitled to prove their debts in this liquidation. The Official Liquidator overruled this objection and allowed the foreign creditors also to prove their claims.

38. Thereupon, the Rajah of Vizianagaram filed an application under Section 183 of the Indian Companies Act and Rule 87 of the Indian Companies Rules, Madras, 1940, in the Court of the District Judge, Visakhapatnam for expunging the proof of all foreign creditors and for deleting their names from the certificates of the Official Liquidator filed under Rule 90 of the Indian Companies Rules in the Court of the District Judge at Vizagapatam. The learned District Judge, agreeing with the view taken by the Official Liquidator that the foreign creditors are entitled to participate in the assets of the Company in India, dismissed the application filed on behalf of the Rajah of Vizianagaram. It is not necessary here to state the extent of the claims of the foreign creditors allowed either by the Official Liquidator or by the District Judge.

39. It is against that order of the District Judge that the Rajah has filed C.M.A. No. 249 of 1949. He has also filed other appeals against the order of the District Judge disallowing claim for the rents, etc. written off by the Court of Wards during their management and some other sums claimed by him. I will now confine myself in these appeals to the question whether the foreign creditors can prove their debts in this liquidation.

40. The main argument advanced by, Mr. Tiruvenkatachari, learned Counsel for the appellant, is that a winding up of an unregistered Company under part IX of the Indian Companies Act is a winding up only for the benefit of the Indian creditors and that the creditors who are not resident in India are not entitled to share in the assets of the Company. The main grounds on which this contention is rested are that since the provisions Of Part IX of the Indian Companies Act have a limited territorial application to foreign companies and arc not enforceable beyond the Indian Union, and the Courts in India have no jurisdiction either to realise the assets of the Company outside India or over the foreign Contributories it is but reasonable and equitable that these assets of the Company in India should be limited to the Indian creditors of the Company. According to him, if the foreign creditors are allowed to get a dividend here, that would militate against the principle of equality which underlies the scheme of both the Bankruptcy Act as well as the Companies Act. It is urged by him that while the creditors of the Indian Nationality are precluded from proving their claims in the liquidation of the foreign concern in the country of its domicile or to take any other appropriate 'proceedings in respect of the balance of amount due to them, the foreign creditors, if allowed to prove their debts here and get a dividend, could proceed against the foreign company and its assets elsewhere which amounts to an invidious distinction between the two sets of creditors. It should therefore be held, argues Mr. Tiruvenkatachari, that the liquidation of the Company in India Is for the benefit of the local creditors only.

41. According to him. Part IX of the Indian Companies Act' creates a new statutory entity so far as the Indian branch of the foreign Company is concerned and that the winding up can only be in regard to the working of the Company in India as under Sections 270 to 276 of the Companies Act it is-treated as a separate concern.

42. The answer given by Mr. Rajah Ayyar, the - teamed Counsel for some of the respondents, is that for all purpose there is only one Company, that there could not be as many companies as there are branches and that the winding up proceedings of one of the branches would not have the effect of making that branch a separate legal entity. He maintains that the acceptance of the right of the foreign creditors to file proof of their debts wquld not in any'way militate against the principle of equality and that, on the other hand, to deprive them of their right to get back the amounts advanced by them would be inequitable and unjust. He contends that a creditor irrespective of his nationality can realise his debt from the assets of the Company wherever they may be, the mode of his realisation depending upon the LEX FORI of the country in which these assets are situated. There is no disability, according to him, attaching to the Indian creditors to prove for the balance of their debts in the liquidation proceedings of the foreign concern or to file a suit in England for the debt due to him and obtain a decree.

43. I have now to consider which of the two con-tentions should prevail. In my opinion, though this question is bereft of authority it does not present much of difficulty. The point that falls to be decided is whether the winding up of an unregistered company which is incorporated in a foreign country is a proceeding relating to an independent entity in which the Indian creditors alone can prove their debts. To substantiate his contention, Mr. Tiruvenkatachari has relied upon some decisions of English Courts and of Indian Courts and upon the provisions of Part IX and Part X of the Indian Companies Act.

44. It is necessary for me at this stage to examine the decision placed by him before us. The learned counsel submitted that the view that such a winding up creates an independent and a separate legal entity has been gaining ground in England as disclosed in the recent decisions of that Court and that the view that the winding up proceedings of an unregistered company incorporated in a foreign country is ancillary to the liquidation of the parent company taken earlier by English Courts did not meet with approval in the later decisions. 'In re. Matheson Brothers Ltd., (1884) 27 Ch D 225 the question was whether an English Court had jurisdiction to wind up a concern incorporated in New Zealand and having a branch in England. Kay J. held that though, having re-' gard to the principles of international comity, the English Court would have great regard to the winding up order made in the country of domicile and be mainly influenced thereby, the existence of the winding up of the parent concern did not take away the jurisdiction of the English Court to make a winding up order in England. The observations of the learned Judge at page 231 are apposite :

'..... I consider that 1 am justified in tsking steps to secure the English assets until I see that proceedings are taken In the New-Zealand liquidation to make the English assets available for the English creditors PART PASSU with the creditors in New Zealand.'

In 'In re. Commercial Bank of South Australia', (188G) 33 Ch D 174 a similar question arose, and there also, it was held that the fact that at the time when the petition for winding up the English branch of the Commercial Bank of South Australia incorporated in Australia was filed, winding up proceedings in respect of the main concern were pending in Australia would not affect the jurisdiction of the English Court within whose jurisdiction the branch is located. But the learned Judge, North, J. expressed the opinion that the winding up in England would be ancillary to a winding up in Australia and- that there should be no conflict between the two Courts and that due regard should be had to the interest of all creditors and all contributories.

45. The procedure to be followed in the case of a winding up of a company, with branches in foreign countries, In the country of its domicile is laid down by Vaughan-Williams J. in 'In re English Scottish and Australian Chartered Bank (1893) 3 Ch D 385 as follows:

'....In construing the statute, one must bear in mind the principles upon which liquidations are conducted In different countries and in different Courts, of one concern. One knows that where there Is a liquidation of one concern the general principle is: 'ascertain what is the domieil of the Company in liquidation; let the Court of the country of domicile act as the principal Court to govern the liquidation; and let the other Courts act as ancillary, as far as they can, to the principal liquidation.'

In this case the Australian voters were admitted to vote with other creditors. Mr. Tiruvenkatachari has called into aid the following observations of the learned Judge In that case, in support of his contention :

'It seems to me that the right course to take under the section may vary according as the Court has to deal with the principal or ancillary liquidation. According to my view, I have here to deal with a principal liquidation, and, that being so, I am bound to make provision for creditors in all parts of the world coming in and being heard if they think fit'.

I do not think that these observations can be interpreted to mean that In the case of an ancillary liquidation the assets of the branch or the assets in that liquidation should be limited to the creditors of that country.

46. The principle that the liquidation of the unregistered Company should be treated as ancillary and the Courts dealing with it should act in aid of the liquidation of the company in the country of its incorporation which is the principal liquidation is recognised also in 'North Australian territory Co. v. Goldbrough Mort & Co.' (1890) 61 L T R 716 and also in 'Re Federal Bank of Australia Limited' 68 LT 728.

47. In 'New Zealand Loan and Mercantile Agency Company, Limited, v. Morrison' (1898) AC 349 the main question that arose was whether an arrangement made under the Joint Stock Companies Arrangement Act and agreed to by the statutory majority of the creditors in the winding up of an English Company having a branch in Victoria would bind a non-assenting creditor who has filed a suit against the company in Victoria to recover a loan advanced in Victoria to the Company and whether such a scheme of arrangement was a bar to his action in Victoria. Dealing with that question, Lord Davey observed that all the creditors of a company are entitled to be summoned to any meeting ordered by the Court and to participate therein and that the words 'all creditors' refer to the creditors not only resident in the United Kingdom but in the Colonies or in foreign countries. :

48. The Views of Maugham, J., in 'In re voca-tion (Foreign) (1932) 2 Ch 196 may be referred to usefully. There, a company incorporated in England which was carrying on business In Australia also was ordered to be wound up. An English creditor who had a claim against an Australian branch filed a suit in Australia. The question arose whether the creditor should be restrained from proceeding with his suit. In dealing with that point, Maugham, J., at page 207, after, stating that It has been the view of the English courts that the principal winding up should be in the principal domieil of the company, and that any other winding up is ancillary to the principal winding up, states:

'The effect of one winding up being ancillary to the principal winding up has, I think, been much considered in our Courts. This Court no doubt holds that in the winding up here all creditors, whether British or foreign, who can prove their debts have equal rights.'

Further down in the, same page, it is observed:

'If there are two winding up orders, one here and one abroad, it would seem to be impossible to contend that a foreign creditor is not to be allowed to prove his deot abroad and, if the lex fort permits it, to oring an action abroad.'

49. It looks to me that the principle deducible from these decisions is tnat, in the winding up of a company, all the creditors have to be treated alike irrespective of their nationality.

50. I will now examine the rulings cited to its by Mr. Thiruvenkataenari as marking a change in the approach to this question. Reliance was piaced by him on the speech of Lord Atkln in 'Russian and English Bank and Florence Montefiore Guedalla v. Baring Brother & Co.' (1936) AC 406. There, their Lordships of the Privy Council had to consider whether a suit could be filed in the name Of a foreign company which after carrying on the business in England was dissolved in tne country or its domieil and was wound up as an unregistered company in England, to recover a debt due to the company in England, at the time of its dissolution and still unpaid. The majority of the Lords, Lord Blanesburgh, Lord Atkin and Lord MacMilian, took the view that such a suit could be maintained despite its dissolution, while Lord Russel of Kilowen and Lord Maugham held otherwise. The relevant portion of the speech of Lord Atfcin relied on by Mr Tiruvenkatachari which is at page 423 is as follows :

'But, if the corporation does trade here, acquires assets here and incurs debts here, we shall not accept its dissolution abroad without a stipulation that, if desirable, it may be wound up here, so that its assets here shall be distributed amongst its creditors (I do not stay to consider whether its English creditors or creditors generally) and for the purpose of the winding up, it shall be deemed not to have been dissolved; for, that event would defeat our municipal provisions for winding up a corporation.'

I think these observations cannot lend themselves to the interpretation that the foreign creditors cannot participate in the dividends. They only indicate that the question was left open,

51. In 'Re Banca Commerciale Italiana' (1943) l All E R 480 the Banca Commercials Italians which was a bank established under the laws of Italy was carrying on banking business in England also. The English branch of the Bank was directed to be wound up by an order made under the Defence (trading with the Enemy) Regulations, 1940. It was held there that the winding up order under the Regulations created a new entity which can take into consideration its assets and liabilities in England only. But this case does not afford us any help as the liquidation was under the Defence Regulation of 1940 which has specifically provided for such a procedure.

52. In 'In re Suidair Ltd., (1950) 2 All E R 920. Wynn-Parry, J., laid down that although the Court of the country of domieil acts as the principal . Court to govern the liquidation and the other Courts act as ancillary to the principal liquidation, the desire to assist in the main liquidation should not make the Court acting as the ancillary to give up the forensic rules which govern the conduct of Its own liquidation. The passage on which reliance-was placed by the Counsel for the appellants occurs at page 924:

'It appears to me that the simple principle is that this Court sits to deal with the assets of tho South African Company which are within its jurisdiction, and for that purpose administers, and administers only, the relevant English law --that is, primarily the law as stated la the Companies Act, 1948, looked at in the light, where necessary, of the decided cases. If that principle be adhered to, no confusion will result. If it is departed from, I cannot see how any other resuit would follow than the utmost possible confusion.'

We do not think that this statement of law enunciated by Wynn-Parry, J., in any way supports the contention urged by Mr. Tiruvenkatachari. Nor does the decision of Venkataramana Rao, J-, in an unreportefl case in 'Re Liquidation of the Travan-core National Bank' Appln. No. 1897 of 1939, lend any support to the argument of Mr. Tiruvenkatachari, where the learned Judge confined the list of contributories to those in British India.

53. Another decision cited to us by Mr. Tiruven-katachari in support of his arguments is 'In re Travancore Quilon Bank, Limited', AIR (26) 1939 Mad 318. There, the learned Judge laid down 'inter alia that', though the principal domicile of the Bank was Travancore, the Courts in the state of Madias, which had seisin of the liquidation proceedings of the Madras Branch which is an unregistered company, to which Part IX of the Indian Companies Act was applicable, had complete control over its own liquidation according to its 'lex fori', and could pass an order of winding up which would secure its assets in British India and for the benefit of the British Indian creditors. Mr. Tiruvenkatachari maintained that this statement of law substantiates his contention that the liquidation of an unregistered company should be confined to the assets and liabilities over which the Courts in British India have jurisdiction. We are not able to accede to this. That it was not the intention of the learned Judge that the foreign creditors should be excluded from participation in the assets of an unregistered company is clear from a passant which occurs at page 325:

'A separate order for winding up will be passed in this Court for the purpose of having control over the British Indian assets in the interests of the British Indian creditors and this Court will not permit a foreign Court in any way to interfere with the just rights of the British Indian creditors and the endeavours will be as far as possible to secure equal distribution for all creditors, British Indian or foreign. The underlying principle seems to be one of co-operation based on the essential principles of justice and equity.'

54. A reference to the relevant passages in the standard books on the Companies law has convinced us that there is no basis for a distinction based on the nationality of a creditor as sought to be drawn by the learned Counsel for the appel-lants; that is, between the creditors of the Company resident within the jurisdiction of the Court over the unregistered Company and its foreign creditors. At page 409 of 'Buckley on the Companies Act' 12th Edition, under the topic 'Class of creditors', it is stated that:

'foreign or colonial creditors (in the sense in which these words are used above) may of course come in and prove; and, as against the assets with the jurisdiction, they may, upon the principles above suggested, be bound by the scheme.'

Palmer in his book on Company Law, (19th Edition by Topham) says at page 379 that any person to whom money is due by a company is a creditor entitled to present a petition for the 'winding up of the company. This view seems to be shared by the other writers on the subject.

55. The passages referred to above seem to negative the contention put forward by Mr. Tiruvenkatachari.

56. As I have already pointed out, Mr. Rajah Ayyar contended that in the case of a company like the present there is only one legal entity and not as many companies as there are branches In foreign countries and that a creditor who advances money to the Company expects to be paid out of Its assets wherever he may be whether the creditor can reach the assets of the company at any particular place depending upon the law of the country where those assets are to be found. As substantiating this proposition he placed reliance upon a decision of the House of Lords in Compagnie Generate Trans-At-lantique v. Thomas Law & Co.' (1889) A C 431. There, a French company formed under the French law with its head office at Paris which was doing part of its business In England in such a way as could be said to be resident in England was sued in England for enforcing a claim for damages. It was held, affirming the decision of the Court of Appeal, that such an action was maintainable in England, No ruling was cited to us which has taken a contrary view.

57. There can be no doubt' that the law is the same in India. The relevant provision of law is enacted in Section 20 of the Civil Procedure Code which provides that :

'a corporation shall be deemed to carry on business at its sole or principal office in British India, or in respect of any cause of action arising at any place where it has also a subordinate office, at such place.'

It is clear that under the Civil Procedure Code of India a suit could be filed by a creditor against a foreign company which is carrying on business in the Indian Union.

58. That being so, can it be said that a person who can enforce his claim against an unregistered company is precluded from proving his debt if the affairs of that company are wound up. That such a creditor can present a petition for winding up an unregistered company is seen from Sections 162, 163 and 166 of the Indian Companies Act. Though these provisions of law are contained tn Part V of the Companies Act, by virtue of the provisions of Section 276 of the Companies Act, all these provisions of Part V relating to the liquidation of companies are applicable to an unregistered company also, it could not with any reason, be postulated that a creditor who can enforce a claim against an unregistered company and could also apply for its liquidation, is precluded from proving his debt the moment that company's affairs are wound up. It has also to be noted that by reason of Sections 169 and 171, a creditor is prevented either from filing a suit or from continuing it if he has already filed it the moment the company is liquidated. It follows that if a creditor is prevented from pursuing his remedies against the company by the intervention of its liquidation, he would be entitled to prove his claim in liquidation, and the winding up cannot be to his disadvantage. Further an examination of relevant sections of the Companies Act shows that no such distinction between the creditors resident in India and foreign creditors as sought to be made on behalf of the appellant is contemplated under the Act. It is not necessary to refer to them in detail. Suffice it to say that the scheme of the Act seems to be to treat all the creditors alike irrespective of their nationality.

59. In reaching a conclusion on this question, I think the principle laid down in the following cases with regard to the proof of debts in bankruptcy is a valuable guide; 'Graham v. Campbell' (1872) 7 Ch D 490; Banco De Portugal v. Waddell' (1880) 5 AC 161 and 'Wiskemann In re, (1923) 92 L JCh 349. The rule of law stated in those decisions is that a foreign creditor can prove his debt in bankruptcy irrespective of his nationality subject to the condition that he must bring Into the estate whatever dividend he has received elsewhere (Vide also Hals-bury's laws of England, 2nd Edition by Hallsham page 278, paragraph 367). The same statement of law is contained at page 808 of Dicey's Conflict of Laws, 6th edition, where the learned author says that a foreigner proving (e. g. for a foreign debt) stands in the same position as does an English creditor proving for an English debt. To the same effect is the passage in 'Private International Law' by Cheshire. At page 647, it is stated that a foreigner could prove his debt in an English bankruptcy in spite of the debt having been contracted abroad, and that he is in the same position as the English creditor in all matters concerning the administration of the estate. I think there is no difference between the English law and the Indian law in this respect. I feel that the principle governing the proof of debts by foreign creditors in the bankruptcy proceedings is applicable to that of the winding up proceedings also. I have therefore arrived at the conclusion that a foreign creditor is as much entitled to a share in the assets of an unregistered company in liquidation as a creditor resident in the country where the unregistered company is situated, the nationality of the creditor not making a point of difference.

60. Alternatively, it was argued by Mr. Tirtiven-katachari that the situs of the debt rtot being in India, a foreign creditor cannot prove his debt in the liquidation of an unregistered company. According to him, unless the debt has some relation to the business of the unregistered company in India, the foreign creditor cannot claim to participate in the assets ot an unregistered company in liquidation.

61. For ths position that a debt is capable of local situation, Mr. Tiruvenkatachari referred us to a number of decisions of English Courts and to passages in Cheshire's 'Private International law' and Dicey's 'Conflict of Laws'. But I think the question of situs of a debt has not much of a bearing on the point whether a foreign creditor is excluded from participation in the assets of an unregistered company which is wound up. I think it is in connection with administration and succession actions that the situs of a debt has relevancy. In Cheshire's Private International law' it is stated at page 598,

'The fact, however, that a debt possess a definite situation for some purposes does not necessarily imply that its assignment should be governed by the 'lex situs'.'

Even apart from that, the provision of law enacted in Section 20 of the Civil P. C. is an answer to the argument based upon the situation of the debt. In this view of the matter, it is not necessary for me to refer to the various decisions cited to us by Mr. Thiruvenkatachari on the question of situs of debt.

62. For the foregoing reason, the contentionurged on behalf of the appellant that proof ofdebts of the foreign creditors should be expunged 'snot acceptable to us. I entirely agree with mylearned brother in his conclusions in other respects.


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