HANSIPRA GMBH Vs. DRESDNER BANK FRANK FRUT

JUDGEMENT

(1.) This appeal is directed against the order dated 28th February, 1989 passed by a learned Single Judge of this Court in I As No-4666/85 and 8806/87 in Suit No-488/85. By this order the learned Single Judge has stayed further proceedings in the suit with liberty to have the proceedings revived in accordance with law on revival or re-registration of the plaintiff company.

(2.) The facts of the case briefly stated are that M/s. Hansipra GMBH (hereinafter referred to as 'Hansipra') the plaintiff in the suit was company with limited liability registered at Frankfurt, West Germany. Hansipra filed a suit under the provision of Order XXXIII of the Code of Civil Procedure in the Court of Civil Judge, Unnao for recovery of real pearls and precious stones mentioned in the plaint or recovery of Rs.2,07,00,000.00 in case the recovery of said peris and precious stones cannot be obtained and further for the recovery of Rs.93,00,000.00 towards compensation for wrongful detention of the goods. The suit had been transferred to this Court. In the plaint it has been alleged that Dr. B.B. Mehrotra is the managing director of Hansipra and he is authorised to sign and verify the plaint. IA 4666/85 filed under section 151 of the Code of Civil Procedure by the respondent praying therein that the suit may be dismissed as not maintainble or proceedings in the suit may be ordered to be stayed. In this application it was pleaded that Hansipra was deleted ex-officie from the Commercial Register on 5th April, 1982 according to the "Loschungsgesets" (Deletion Law) of October 9, 1934 because of lack of funds and assets. It was further pleaded that the said company was re-registered on or about 4th August, 1982 for the limited purpose of liquidation an Dr. B.B. Mehrotra was appointed as a liquidator. The company was once again deleted from the Commercial Register on or about 15th February, 1985. It was argued on behalf of the respondent before the learned Single Judge that the effect of deletion of the name of Hansipra from the Commercial Register on or about 15th February, 1985 was that the suit could not be continued by or on behalf of the said company by Dr. B.B. Mehrotra. It was further contended that in law Hansipra ceased to have any existence after the aforesaid deletion from the Commercial Register on 15th February, 1985 and as such the suit was liable to be dismissed or in any event further proceedings in the suit were liable to be stayed.

(3.) The appellant admitted before the learned Single Judge that Hansipra was dissolved in April 1982 and it was revived in August 1982. He, however, denied that the company had been ultimately dissolved in 1982. In the affidavit dated 5th September, 1987 filed by Dr. B.B. Mehrotra it was contended that the interest of the plaintiff company was assigned to him vide letter of assignement dated 30th June, 1984 under the provisions of Article 72 of GMBH Laws. The learned Single Judge held that on deregistration, deletion of Hansipra had taken place on 15th February, 1985. He held that Dr. B.B. Mehrotra, who claims himself to be the liquidator of Hansipra, a company which was dissolved and cesed existence, could not represent a non-existing company. Dealing with the letter of assignment dated 30th June, 1984 the learned Single Judge held that he could not act upon the said docuement since this document was placed on record nearly three years after its execution and further the right to continue the suit under the name of non-existing company could not have been assigned. The learned Single Judge, therefore, allowed the application being LA 4666/85 and stayed further proceedings in the suit with liberty to have the proceedings revived in accordance with law on revival or reregistration of Hansipra. The aforesaid order of the learned Single Judge has been challenged in this appeal. Mr. Tikku, the learned counsel for the appellant submitted that at the relevant time when the suit was filed, the name of Hansipra existed on the Commercial Register and after filing of the suit even if the name was deleted, the suit could be continued by or on behalf of the said company. In this connection he relied on Article 69 and 70 of GMBH Laws. The arguments on behalf of the appellant were followed by,Dr. B.B. Mehrotra, who claims himself to be the liquidator of the company. Dr. Mehrotra submitted that when the letter of assignment dated 30th June, 1984 was issued in his name of the plaintiff company was registered under the provisions of GMBH Laws. He, therefore, contended that in terms of the aforesaid letter of assignment he could continue the suit on behalf of the plaintiff company even if its name was deleted from the Commercial Register. Mr. Setalvad, learned Senior counsel for the respondent reiterated the arguments advanced on behalf of the respondent before the learned Single Judge. He further submitted that as per note at page 2 of exhibit 'C' (which is at pages 177-178 of the paper book), the plaintiff company was officially dissolved according to section 2 of the Law regarding dissolution and deletion of the companies and co-operative 263 societies of 9-10-1934 (Federal Law Gazette I Page 914), on 15th February, 1985 and in terms of clause (3) of section 2, the liquidator in such a case can be nominated by the court on the application of a partner. Since in the present case Dr. Mehrotra has not been appointed as liquidator by any court under the GMBH Laws, he cannot act as liquidator of the plaintiff company and as such the suit could not be continued by Dr. Mehrotra. In order to appreciate the point at issue it will be relevant to reproduce articles 69 and 70 of GMBH Laws which read as under:- "69(1):- Notwithstanding the dissolution of the company, the provision of the Second and Third Title as to the legal relation of the Company and of the share holders apply until the termination of the liquidation unless something different follows from the provisions of the present Title and from the nature of the liguidation. 69(2):- The Court having jurisdiction over the company at the date of its dissolution remains competent until the assets have been finally distributed. 70:- The liquidators shall terminate the current business and discharge the obligations of the dissolved company, collect its accounts receivable and convert the assets of the company into cash; they shall represent the company in and out of court. In order to terminate current transactions the liquidators may also enter into new transactions."