CHUNNILAL ONKARLAL Vs. VIKRAM SUGAR MILLS LTD.

JUDGEMENT

(1.) THIS appeal under clause 10 of the Letters Patent is against the dismissal of an application for grant of leave to continue a suit by Newaskar J. excising jurisdiction under the Indian Companies Act, 1913 (hereinafter referred to as the 'Companies Act'. References to sections are to the sections of the Act of 1913.

(2.) VIKRAM Sugar Mills Limited were incorporated as a limited Company in 1945 in the erstwhile State of Dewas. On 23 -1 -19JO a petition was filed for winding up of the Company on various grounds. While this petition was pending consideration, the appellants filed petition on 21 -7 -1950 for leave to file a suit; but it was rejected, as no winding up order was till then passed. The appellants then filed the suit on 31 -8 -1950 (Civil Suit No. 59 of 1950, Court of District Judge, Indore). The Court dealing with the winding up proceedings appointed a provisional Liquidator to take the assets of the Company on 2 -4 -1961. Finally, an order for winding up the Company was passed. Thereafter, an application under sect ion 171 of the Companies Act was filed for leave to continue the suit. It was dismissed on 6 -10 -1958 by the order under appeal.

(3.) THE learned counsel for the appellants submits that his suit does not affect the interest of the Company inasmuch as all that he wants is the substitution of his name by the names of others. All the same, the Company is a necessary party. He points out that his suit cannot proceed without the leave of the Court under section 171 of the Companies Act and as the matter involved is such that it must he tried by a separate suit and not by the winding up Court, leave should have been granted. Shri Dhanda for one of the creditors of the Company contents that as the suit was filed after the date of the winding up petition, on which date the winding up is deemed to have commenced under section 168, there was no right to have the rescission of the contract of purchase of shares. The suit is thus not tenable and leave should be refused. Shri Chitale for another creditor contends that the third and the fourth reliefs which are directed against the Company can only be tried sati factorily and conveniently by the winding lip Court and leave cannot therefore be granted. He also pointed out that no prejudice would be caused to the appellants if the matter is tried by the Company Court.