ALLEPPEY CHIT FUND PRIVATE LTD Vs. STATE

JUDGEMENT

(1.) On the 2nd July 1959, the petitioner herein applied to the District Court, Alleppey for a winding up order against a company of which he was a contributory, and winding up was ordered by that court on the 16th October of the same year. The very institution of the petition was after the issue of Notification, G. S. R 663, dated 29th May 1959, by the Central Government under S.10(2) of the Companies Act, 1956. This notification was in supersession of all previous notifications issued by the Provincial and State Governments under the proviso to sub-section (1) of S.3 of the Indian Companies Act, 1913, and it did not confer on District Courts the jurisdiction to order winding up. It is therefore not disputed that the District Court, Alleppey had no jurisdiction with respect to the subject matter of the proceeding, in other words, that it had no inherent jurisdiction as distinguished from a mere lack of territorial jurisdiction. Therefore its order was void; and, in this view, expressly so stated, the petitioner applied to this court by C. P. 31/60 for a fresh winding up order. Subsequently he seems to have thought better of it for he has now come seeking a direction that the District Court, Alleppey do retain and continue the proceedings; and he would have it that S.437 of the Companies Act, 1956 warrants such a direction.

(2.) S.437 runs as follows:

(3.) S.219 [1] of the English Act of 1948 which combines S.436 and 437 of our Act says that the winding up, or any proceedings therein, may be transferred from one court to another court, or may be retained in the court in which the proceedings were commenced although it may not be the court in which they ought to have been commenced. And sub-section [2] of the section specifies the authorities by whom the powers of transfer given by sub-section [1] may be exercised. Apparently sub-section [2] uses the word, transfer to include also the retention for which sub-section [1] provides - See also the marginal note which speaks only of transfer of proceedings and not of retention. It will be noticed that with regard to retention in the court in which the proceedings have been commenced, the language employed in sub-section [1], although it may not be the court in which they ought to have been commenced is identical with the language of our S.437. It is regarded as settled law that the another court to which proceedings may be transferred must be a court which has itself jurisdiction to wind up [See Palmers Company Precedents, 16th Edition, Part 2, page 542 and Buckley 13th Edition, page 447]. The law was thus settled by In re Real Estates Company [1893] I Chancery 398 with reference to the identical language of S.3 of the Companies [Winding-up] Act, 1890. It follows by parity of reasoning that the court in which proceedings may be retained although it may not be the court in which they ought to have been commenced must likewise be a court which has such jurisdiction.