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Perumal Koundan and ors. Vs. the Thirumalarayapuram Jananukoola Dhanasekara Sanka Nidhi Ltd. Through Its Official Liquidator A. Venkataswami Nayudu - Court Judgment

LegalCrystal Citation
SubjectCompany;Civil
CourtChennai
Decided On
Reported inAIR1918Mad362; 45Ind.Cas.164; (1918)34MLJ421
AppellantPerumal Koundan and ors.
RespondentThe Thirumalarayapuram Jananukoola Dhanasekara Sanka Nidhi Ltd. Through Its Official Liquidator A. V
Cases Referred and Manaji Rajiyi (Rao Saheb) v. Khandoo Baloo I.L.R.
Excerpt:
- - now a registered company or any other association may be unable to pay the court fee payable like any ordinary person and there is no reason to suppose that the legislature did not intend order 33 to apply to such cases especially when it is remembered that the effect would be to allow debtors to escape payment and defeat on defraud the creditors and share-holders of the company......and an official liquidator was appointed. he as liquidator, applied under order 33 of the civil procedure code to file a suit on behalf of the nidhi in forma pauperis against the petitioners before us who are alleged to owe the nidhi about re. 8,524 under a promissory note. the allegations in the petition show that the nidhi was bankrupt and that the only properties it had (except the subject of the suit) were worth es. 12. the subordinate judge allowed the nidhi to sue in forma pauperis and the respondents have filed this petition against the order.2. the chief contention raised before us is that order 33 of the civil procedure code, does not apply to companies, corporations or other associations. it is argued that as the explanation to order 33 rule 1 refers to necessary.....
Judgment:

1. The Thirumalarayapuram Jananukoola Dhanasekhara Sanka Nidhi Ltd., which was a company registered under the Indian Companies Act went into liquidation and an official liquidator was appointed. He as liquidator, applied under Order 33 of the Civil Procedure Code to file a suit on behalf of the Nidhi in forma pauperis against the petitioners before us who are alleged to owe the Nidhi about Re. 8,524 under a promissory note. The allegations in the petition show that the Nidhi was bankrupt and that the only properties it had (except the subject of the suit) were worth Es. 12. The Subordinate Judge allowed the Nidhi to sue in forma pauperis and the respondents have filed this petition against the order.

2. The chief contention raised before us is that Order 33 of the Civil Procedure Code, does not apply to companies, corporations or other associations. It is argued that as the explanation to Order 33 Rule 1 refers to necessary wearing apparel and Rule 3 requires presentation of the petition by the 'applicant in person' the order necessarily excludes petitioners who are not human beings.

3. We are unable to accept this contention. The word ' person' is not defined in the Code of Civil Procedure and consequently the definition of the word 'person' as including any company or association or body of individuals whether incorporated or not, in the General Clauses Act (X of 1897) would apply unless there is something repugnant to the subject or context. Order 33 of the Civil Procedure Code refers to suits by paupers and Rule 1 enacts that any suit may, subject to the provisions of the order, be instituted by a pauper and does not exclude official persons. Now a registered company or any other association may be unable to pay the court fee payable like any ordinary person and there is no reason to suppose that the legislature did not intend Order 33 to apply to such cases especially when it is remembered that the effect would be to allow debtors to escape payment and defeat on defraud the creditors and share-holders of the company. The explanation to Rule 1 no doubt states that where no court-fee is prescribed, the petitioner should not be entitled to property more than Rupees 100 'other than his necessary wearing apparel.' The explanation simply allows deduction of the value of wearing apparel and can only mean that if the applicant has necessary wearing apparel he can deduct its value. We do not think it can be construed to mean that only persons who in law can possess wearing apparel, can sue. as paupers. In Cortis v. The Kent Water Works Company (1827) 7 B. & C. 314 the argument that an enactment (47, Geo. 3, Ch. Ill) did not apply to corporations as it allowed a person to appeal on entering into a recognizance which a corporation was not competent to do, was negatived by Bayley, J. who observed as follows : 'But assuming that they cannot enter into a recognizance, yet if they are persons capable of being aggrieved by and appealing against a rate, I should say that that part of the clause which gives the appeal applies to all persons capable of appearing and that the other part of the clause which requires a recognizance to be entered into applies only to those persons who are capable of entering into a recognizance but is inapplicable to those who are not.'

4. The word used in the explanation is 'person ' and there is nothing repugnant in applying the definition given in the General Clauses Act. Where the applicant is a company which ex hypothesis can have no wearing apparel, then it will not be entitled to deduct anything on account of wearing apparel and will not be a pauper if it has property worth Rupees 100 and the suit is one for which no fee is prescribed.

5. As regards Rule 3 which requires personal presentation of the application to sue in forma pauperis, it seems to us that where the law in consequence of personal appearance in courts being impossible either by reason of the party being a company or an infant or lunatic, allows appearance by somebody else, appearance by such person would be sufficient. For example Order 32 of the Civil Procedure Code which relates to minors and persons of unsound mind authorises appearance by the next friend and guardian ad litem and it cannot be said that where the minor or lunatic is a pauper, the presentation of a petition to sue in forma pauperis by the next friend would be invalid or contravening the provisions of Order 33 Rule 3. So far as companies are concerned, the Companies Act provides for the mode in which the company is to be represented. Under Section 179 of the Indian Companies Act the liquidator may institute any suit or other legal proceedings in the name and on behalf of the company and under Order XXIX of the Civil Procedure Code, the principal officer of the company may act in legal proceedings on behalf of the company and may be required to appear when personal appearance is necessary. The liquidator can therefore fulfil all the obligations required of a pauper petitioner under Order 33. Rule 3 of Order 33 of the Civil Procedure Code in our opinion only prohibits a pauper who is competent in law to appear in person from taking advantage of Order III of the Civil Procedure Code and appearing by a pleader or recognised agent instead of being present personally. It does not cover cases in which from the nature of the case, physical presence is impossible or where the law owing to any disability directs that all acts required by the code should be performed by a next friend. We are of opinion that there is nothing in Rule 3 to prevent an official liquidator from appearing and presenting the petition. A company or other association being a 'person' within the meaning of the definition of the General Clauses Act which applies to the Civil Procedure Code of 1908, could prima facie apply for leave to sue in forma pauperis and as we see nothing in Order 33 Rule 1 and 3 which will be repugnant to the application of the definition we think a company can take advantage of the provisions of Order 33 if it is a pauper.

6. It is next argued that as the liquidator is not a pauper though the Company may be so, Order 33 would not apply. The suit is really by the company and as the liquidator only acts for the company, being so to say its agent, his financial standing is immaterial. We think the case is covered by Venkatanarasayya v. Achemma I.L.R. (1881) M. 3. where it was held that a next friend who is not a pauper can sue in forma pauperis if the minor is proved to be a pauper. Reference was made to In the matter of the will of Dawubai I.L.R. (1893) B. 237 and Manaji Rajiyi (Rao Saheb) v. Khandoo Baloo I.L.R. (1911) B 279. These were cases of executors suing and without expressing any opinion as to the correctness of these decisions, it is sufficient for the purposes of this case to say that in the case of executors the estate vests in them and they are the real plaintiffs, though they sue not for their own benefit but for the benefit of the beneficiaries. For the purpose of Order 33 the real question is who is the actual plaintiff, and is he a pauper within the meaning of the explanation to Order 33 Rule 1 of the Civil Procedure Code.

7. The last contention is that as the liquidator received by his order of appointment a commission, he is interested in the subject matter of the suit within the meaning of Order 33 Rule 5 of the Code of Civil Procedure, The provision only applies to agreements between the pauper and a third person with reference to the subject matter of the suit. Where a court or a company appoints a liquidator he is an officer who is appointed under statutory authority and the fact that he is paid a percentage of the collections does not bring him within clause (e) of Order 33 Rule 5. No particular debt is ear-marked with the payment and even if it were so, an agreement in pursuance of the Companies Act to remunerate the liquidator for winding up the Company would be on the same footing as an agreement by the pauper with his vakil to pay him the legal fees for conducting the suit.

8. We see no reason to interfere and dismiss the petition with costs.


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