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Central Bank of India Vs. Atlas Works P. Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberTransferred Company Suit No. 9 of 1977 (Title Suit No. 59 of 1976)
Judge
Reported in[1985]58CompCas243(Cal)
ActsCompanies Act, 1956 - Section 446
AppellantCentral Bank of India
RespondentAtlas Works P. Ltd. and ors.
Cases ReferredRanulal v. Daudas and
Excerpt:
- .....winding-up order passed against defendent no. 1, this court acquired jurisdiction to have the the suit transferred from the alipore court to this court, exercised such jurisdiction and the suit was validly transferred to and is pending before this court. the question to be decided is whether on account of the permanent stay of the winding-up proceeding, this court has lost its jurisdiction to try this suit.12. section 446 of the companies act, 1956, provides that when a winding-up order has been made, the court which is winding up the company would, notwithstanding anything contained in any other law, have jurisdiction to entertain or dispose of any suit or proceeding by or against the company.13. the section further provides that notwithstanding anything contained in any other law, any.....
Judgment:

Dipak Kumar Sen, J.

1. The Central Bank of India filed a suit in the District Court of Alipore marked as Title Suit No. 59 of 1976 claiming, inter alia, a money decree and also enforcement of mortgage of immovable properties of Atlas Works P. Ltd., defendant No. 1, in favour of the bank.

2. Thereafter, defendant No. 1 having failed to pay rent for its factory premises, at the instance of the landlord as the creditor, was directed to be wound up by this court. On August 17, 1977, this court in its company jurisdiction directed the said Title Suit No. 59 of 1976 to be transferred from Alipore Court to this court. Pursuant thereto, the said suit has been transferred arid is now pending in this court marked as Transferred Company Suit No. 9 of 1977.

3. During the pendency of the winding-up proceedings the claim of the creditor was paid off in full by defendant No. 1 in instalments granted by this court. The proceedings for winding up has thereupon been permanently stayed.

4. The present application moved on a notice dated September 13, 1983, the plaintiff seeks, inter alia the following orders:

' (a) Transferred Suit No. 9 of 1977 and its records and proceedings be retrajisferred to Alipore Court with a direction for disposal of the suit by the Alipore Court expeditiously ;

(b). The receiver appointed herein be directed to continue till the disposal of the suit. '

5. The plaintiff contends: that under the special jurisdiction conferred by Section 446 of the Companies Act, 1956, this court was entitled to transfer to itself and dispose of the said suit filed in the Alipore Court. This, court had no jurisdiction otherwise to entertain and try this suit inasmuch as this suit is a suit for land, the properties mortgaged being situated outside the original jurisdiction of this court. The plaintiff contends further that as the winding up of defendent No. 1 has been permanently stayed, this court has lost its jurisdiction to entertain and try this suit as there is no winding up order in existence.

6. Prauab Kumar Bose, defendant No. 2, has affirmed an affidavit on September 22, 1983, which has been filed in opposition to this application, It is contended in this affidavit, inter alia, that the said suit having been duly transferred to this court, the latter retains its jurisdiction to dispose of the same. The suit, it is contended, is primarily a suit for money lent and advanced. Even assuming that the suit is a suit for land, the same was properly instituted in the Alipore Court and lawfully transferred to this court. It is alleged that a retransfer will result in needless and unnecessary delay and harassment and unnecessary costs and expenses will be incurred.

7. The manager of the branch of the plaintiff involved in this transaction has affirmed an affidavit on September 26, 1983, which has been filed in reply to the aforesaid affidavit of defendant No, 2. He submitted further that the suit had been filed in the proper court, viz., the Alipore Court, which had jurisdiction to entertain and try the same. Thereafter, the suit was duly transferred to this court under a special provision of law. Both the institution and the transfer of the suit were lawful and effective. There was no provision in the Companies Act, 1956, that a transferred suit should be retransferred in the event the winding-up proceedings of the company was permanently stayed.

8. Learned advocate finally submitted on instructions that if the suit istried in this court, the defendants would raise no objection at the trial asto the jurisdition of this court to try this suit.

9. In support oi his contentions, learned advocate for the defendantcited:

Ranulal v. Dawdas, . In this case, a learned judge of the Rajasthan High Court, following Chokkalinga Pillay v. Velayudha Mudaliar, AIR 1925 Mad 117, Ramier v. Muthu Krishna Ayyar, AIR 1932 Mad 418, Mahhanlal Lolaram v. Panchan Lal Sheoprasad, AIR 1933 Nag 318 and Ishwar Mahto v. Naipal Singh : AIR1956Pat280 , held that once a suit is validly commenced in any court, a subsequent change in the matter of jurisdiction did not affect the jurisdiction of the court trying it, unless there was a clear provision of law which robbed the court of its jurisdiction expressly or by necessary implication.

10. Learned advocate for the plaintiff submitted, on the other hand, that by consent of parties jurisdiction could not be conferred on a court if the court did not have such jurisdiction otherwise. The plaintiff, it was submitted, was apprehensive that if a decree is passed in the suit in favour of the defendant by this court, the same would be impugned as a nullity on the ground that this court had no jurisdiction to try the suit.

11. It is not in dispute that the suit was validly instituted in the Alipore Court which had jurisdictian to try the suit. It is also not in dispute that by reason of the winding-up order passed against defendent No. 1, this court acquired jurisdiction to have the the suit transferred from the Alipore Court to this court, exercised such jurisdiction and the suit was validly transferred to and is pending before this court. The question to be decided is whether on account of the permanent stay of the winding-up proceeding, this court has lost its jurisdiction to try this suit.

12. Section 446 of the Companies Act, 1956, provides that when a winding-up order has been made, the court which is winding up the company would, notwithstanding anything contained in any other law, have jurisdiction to entertain or dispose of any suit or proceeding by or against the company.

13. The section further provides that notwithstanding anything contained in any other law, any suit against the company pending in any court other than the winding up court may be transferred to and disposed of by the latter court.

14. There is no corresponding provision for retransfer of such a suit where ultimately the winding up of the company is not effective.

15. It was laid down by the Supreme Court in State of Kerala v. TV. Rawa-swami lyer & Sons : [1966]61ITR187(SC) , that even where a legislation is passed excluding the jurisdiction of a civil court expressly or by clear implication, the same will not affect the pending cases before the court unless specifically mentioned.

16. In the light of the decision of the Supreme Court, I respectfully agree with the view taken by the Rajasthan High Court in Ranulal v. Daudas and hold that the fact that the winding-up proceedings of defendant No. 1 has come to an end, the same will not affect the jurisdiction of this court in respect of the suit against defendent No. 1 which is pending in this court.

17. I also note that a retransfer of this suit to the Alipore Court will entail multiplicity of proceedings, delay, harassment and further costs. For the above reasons, there will be no order in this application. Cost costs in the suit.


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