GOURDHAN DAS BADRI PRASAD KHEMKA Vs. SHILWATI DEVI

JUDGEMENT

(1.) This is a first appeal from order of the District Judge of Varanasi dated the 14th of January 1958 whereby under the provision of Section 176 of the Indian Companies Act and Rule 52 framed thereunder, one of the three liquidators appointed was removed on the ground that the expenses of liquidation could thereby be brought down without in any way impairing the efficiency of the liquidation proceedings. Benaras Cotton and Silk Mills Limited was a public limited company and by an order of this Court dated the 4th of May 1955 it was directed to be wound up on the application of some of the creditors under section 164 of the Indian Companies Act, 1913 (hereinafter referred to as the Act). It was directed that the liquidation proceedings would be carried on under the supervision of the District Judge of Varanasi. The said District Judge appointed three persons as liquidators of the Company by an order dated the 13th August, 1955. These were Sri C. D. Parikh, Advocate, Sri Ragho Ram Verma and Sri P. L. Tandon. Their remuneration was fixed at Rs. 300/- per month each together with one per cent as commission on the total receipts. They were appointed as liquidators on furnishing security of Rs. 15,000/- each. The mills were not worked by the liquidators and ultimately on the 2nd of October 1956 the mills were leased out by an order of the District Judge to Messrs. Ramlal Rajaram of Kanpur. On the 14th of January 1958 one of the registered share-holders who is opposite party to these proceedings, but has not appeared to oppose this appeal, filed an application that the strength of the liquidators be reduced in order to curtail expenses and because three liquidators were wholly superfluous and unnecessary. No notice of this application appears to have been given to any share-holder or any other party and the learned District Judge, after taking into consideration, that the milts had been teased out and were not worked by the liquidators and that there was a competent superintendent who was a retired Manager of the State Bank of India looking after the liquidation proceedings of the Company, held that three liquidators were unnecessary and he, therefore, directed that Mr. R. R. Verma be removed from 14th of January 1958. Against the said order the present appeal has been filed.

(2.) The preliminary question which arises is as to whether an appeal under Section 202 of the Act lies against an order of the District Judge removing one of the liquidators. Section 202 of the Act runs:

(3.) The question, therefore, that arises is whether the order removing one of the three liquidators can be said to be an order determining the final rights of the parties. It would not be possible to hold that such an order determines the final rights of the parties. The removal of the liquidator is not a matter which adjudges, much less finally determines the rights of the parties in liquidation proceedings. An order appointing a liquidator or removing a liquidator would not also fall under Section 96 or Section 104 read with Order 43, Rule 1, C. P. Code.