Skip to content


Shree Choudhary Cold Storage (1972) Vs. Ruby General Insurance Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberAppeal No. 415 of 1978
Judge
Reported inAIR1982Cal124,[1983]54CompCas639(Cal),86CWN59
ActsGeneral Insurance Business (Nationalisation) Act, 1972 - Section 16(1); ;National Insurance Company Limited (Merger) Scheme, 1973 - Section 8
AppellantShree Choudhary Cold Storage (1972)
RespondentRuby General Insurance Co. Ltd.
Appellant AdvocateP.C. Sen, Adv.
Respondent AdvocateS.K. Kapur and ;Sudipta Sarkar, Advs.
DispositionAppeal dismissed
Cases ReferredC. Muttu v. Bharat Match Works
Excerpt:
- .....rule 11 of c. p. c. it appears, that a suit was instituted by the plaintiff/appellant against ruby general insurance company limited. in view of the contentions raised it would be appropriate to set out the description of the defendant in the cause-title which reads as follows:--'ruby general insurance company limited of which the management is vested in the government of india by the provisions of the general insurance (emergency provisions) act 17 of 1971 having its registered office at ruby house at 6, india exchange place, calcutta-1 within the aforesaid jurisdiction.'2. the cause-title indisputably mentions the provisions of general insurance (emergency provisions) act 17 of 1971. the suit in question was filed on the 18th sept. 1975. in para 2 of the plaint it has been stated that.....
Judgment:

Sabyasachi Mukharji, J.

1. This is an appeal from an order and judgment passed by Ajay K. Basu, J., dated 1st June 1976 dismissing the suit on an application made by National Insurance Co., Ltd. under Order 7 Rule 11 of C. P. C. It appears, that a suit was instituted by the plaintiff/appellant against Ruby General Insurance Company Limited. In view of the contentions raised it would be appropriate to set out the description of the defendant in the cause-title which reads as follows:--

'Ruby General Insurance Company Limited of which the management is vested in the Government of India by the provisions of the General Insurance (Emergency Provisions) Act 17 of 1971 having its registered office at Ruby House at 6, India Exchange Place, Calcutta-1 within the aforesaid jurisdiction.'

2. The cause-title indisputably mentions the provisions of General Insurance (Emergency Provisions) Act 17 of 1971. The suit in question was filed on the 18th Sept. 1975. In para 2 of the plaint it has been stated that the defendant, a public limited company carrying on business in General Insurance, was taken over and its management was vested in the Government of India by virtue of the provisions of the General Insurance (Emergency Provisions) Act 17 of 1971 as amended by the General Insurance (Emergency provisions) Amendment Act 27 of 1972. Since then for the purpose of convenience the aforesaid Ruby General Insurance Company Ltd., thereafter referred to as the 'Insurance Company,' was functioning and was being managed by Messrs. National Insurance Company and/or was a unit of the latter.

3. It appears that the National Insurance Company Limited (Merger) Scheme, 1973 came into force, under Section 1, Sub-section (2), on the 1st of Jan. 1974 and in that scheme, which was published in the Government of India Gazette Extraordinary on the 21st Dec. 1973, there is a definition of the Act which means the General Insurance Business (Nationalisation) Act 1972 and under Section 8A merged company shall on the specified day stand dissolved without winding up. Therefore, the Ruby General Insurance Co. Ltd. by virtue of the aforesaid provisions has stood dissolved since that date. As we have mentioned before the suit was filed in Sept. 1975. The main point that was urged in this application and which found favour with the learned trial Judge was that the suit being against a dissolved company was an incompetent suit and liable to be dismissed under the provisions of Order 7, Rule 11, C. P. C. On behalf of the appellant/plaintiff it was urged that the cause-title clearly indicated that this was a mere misdescription of the defendant. It was emphasised that there was no question of the present applicant being taken by surprise and if it was mis-description the plaint should be allowed to be amended on an oral prayer which was made at the time of hearing of the application before the learned trial Judge. The question, therefore, is whether the description of the defendant in the cause-title was a mere misdescription or was against a dissolved company. It is well settled that a company ceasesto exist on dissolution. For this proposition reliance was placed on the observations of the Supreme Court in the case of Narendra Bahadur v. Shanker Lal, : [1980]2SCR821 where the Supreme Court observed that after a company was dissolved the liquidator could not thereafter claim to represent the company and execute a registered deed of sale. Once the company was dissolved it ceased to exist and the company became a non-existing company.

4, In this connection reference was made to the observations of the Division Bench of this Court in the ease of Malhati Tea Syndicate v. Revenue Officer, Jalpaiguri, : AIR1973Cal78 of the report the Court observed as follows:--

'There can be no doubt that on the day en which the appeal was filed, there was no company in existence by the name of Malhati Tea Syndicate Ltd, and the appeal purported to have been filed by a company which was not on the Register of Joint Stock Companies, and had therefore no existence in accordance with the provisions of the Companies Act, 1956, cannot but be held to be incompetent. Learned Advocate for the applicant contended that the appeal was competent by reason of the provisions in Sub-section (3) of Section 23, Companies Act, 1956. That sub-section runs as follows:-- 'The change of name shall not affect any rights or obligations of the company or render, defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name.'

There the Court was dealing with an appeal preferred by the dissolved company. It was held, an appeal filed by the dissolved company would mean an appeal by non-existent person. The same principle would be applicable in respect of a suit initiated by a dissolved company. Our attention was also drawn to the observations of the Division Bench of the Allahabad High Court in the case of Modi Sugar Mills v. Union of India, 1978 Tax LR 673 (All) where at page 675 of the report the Allhabad High Court observed that under civil law it was well known that an order against the dead person was a nullity. The Allahabad High Court applied thisprinciple in the case of an assessment against the dissolved company. Counsel for the respondent also drew our attention to the decision in the case of Hiralal v. Kali Nath : [1962]2SCR747 . There, at p. 200 of the report, the Supreme Court observed that the Court was lacking inherent jurisdiction, if the suit was against a person, who was dead at the time of the institution of the suit, The same principle that a suit against a dead person is a nullity was reiterated by the Division Bench of Mysore High Court in the case of C. Muttu v. Bharat Match Works, AIR 1964 Mys 293. In that case, the Mysore High Court reiterated that there was no scope for amending the plaint where the Court has no jurisdiction. Because of it being a nullity, there is no scope for making an application for amendment. In this case the suit indisputably, as the cause title of the defendant indicates, was against the dissolved company and, as such, was incompetent. Learned counsel for the appellant contended that the Government was mentioned as a party and this was misdescription. That even was incorrect. The Ruby General Insurance Co. did not vest in the Government. The assets and liabilities of the company had vested in a company, which was a Government company. A Government company is a different entity from the Government of India. As such, this contention on behalf of the appellant also cannot be accepted. In view of the framing of the suit, in the description of the cause title, we are unable to accept the contention that it was a misdescription. Therefore we are on this aspect of the matter in agreement with the view taken by the learned trial Judge.

5. It was contended that in this case, in any event, in view of the arbitration clause which indicated that the claim had to be instituted in terms of Clause 19 of the arbitration agreement where it was stipulated that the company should not be liable for any loss or damages after the expiry of 12 months from the happening of loss or damages unless the claim was the subject matter of pending arbitration clause. In this case an attempt was made for the arbitration on behalf of the plaintiff. But there (as?) was clear from the affidavit, it was contended on behalf of the respondent, by the letter dated 21st March. 73 which was reiterated on 9th July, 1973 and 27th Aug. 1973 there was total repudiationof the claim and the question of the right of repudiation could, in any event, be not subject matter of arbitration because the arbitration clause covered only a limited dispute and that clause provided, inter alia, as follows:--

'If any difference arises as to the amount of any loss or damage such difference shall independently of all other questions be referred to the decision of an arbitrator, to be appointed in writing by the parties in difference, or, if they cannot agree upon a single arbitrator, to the decision of two disinterested persons as arbitrators, of whom one shall be appointed in writing by each of the parties within two calendar months after having been required so to do in writing by the other party. In case either party shall refuse to appoint an arbitrator within two calendar months after receipt of notice in writing requiring an appointment the other party shall be at liberty to appoint a sole arbitrator; and in case of disagreement between the arbitrators, the difference shall be referred to the decision of an umpire who shall have been appointed by them in writing before entering on the reference and who shall sit with the arbitrators and preside at their meetings. The death of any party shall not revoke or affect the authority or powers of the arbitrator; arbitrators or umpire respectively and in the event of the death of an arbitrator or umpire, another shall in each case be appointed in his stead by the party or arbitrators (as the case may be) by whom the arbitrator or umpire so dying was appointed. The costs of the reference and of the award shall be in the discretion of the arbitrator, arbitrators or umpire making the award. And it is hereby expressly stipulated and declared that it shall be a condition precedent to any right or action or suit upon this Policy that the award by such arbitrator, arbitrators or umpire of the amount of the loss or damage if disputed shall be first obtained.'

But in this case the repudiation could not be the subject matter of the arbitration at all. In this case the plaintiff had made an attempt to refer the matter to arbitration and had appointed its arbitrator. The respondent also had appointed its arbitrator without prejudice to its contention that this was wholly without jurisdiction. Thereafter the arbitrationdid not proceed and by an order of this Court dated the 11th Sept. 1975 of Mr. Justice Salil K. Roy Chowdhury the authority of the arbitrators was revoked. It was, therefore, contended on behalf of the appellant that in view of these proceedings it could not be said ex facie under Order 7 Rule 11 that the claim was barred by limitation and was not maintainable. Though we are inclined to think that there is good deal of substance in the contention raised on behalf of the respondent that the claim was barred on this score also, in the view we have taken on the first aspect of the matter it is not necessary to adjudicate on this aspect of the matter.

6. In the premises, the appeal fails and is accordingly dismissed with costs.

C.K. Banerji, J.

7. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //