MOHAMMAD AMIN BROS LTD Vs. DOMINION OF INDIA

JUDGEMENT

(1.) This appeal is directed against a decision of a Bench of the Calcutta High Court dated September 13, 1949, by which an order of Sinha J., directing the compulsory winding-up of the Appellant company, was set aside and the case was sent back to the trial Court to be heard at a future date in accordance with the directions contained in the judgment. The Appellants before us are a private limited company, having their registered office at 25/26, Waterloo Street, Calcutta and they carry on inter alia the business of exporters and importers of hides, skins and other commodities. On March 30, 1948, the company was assessed to income-tax, corporation tax and excess profits tax at various sums of money aggregating to Rs. 35,00,796-5. After notices of demand were served on the Assessee, proceedings were taken by the revenue authorities for recovery of the amounts due on these assessments and on May 15, 1948, nine certificates under the Public Demands Recovery Act (Bengal) were forwarded to the Collector of 24-Pargands, in execution of which certain assets of the company were attached. The attachment, it is admitted, is still subsisting. The company filed several appeals against the assessment orders to the Income-tax Appellate Tribunal. Some of these appeals have been heard and disposed of resulting in a reduction of the assessed amounts to the extent of about Rs. 8 lakhs, while the other appeals are still pending hearing. On January 26, 1949, the directors of the company made and filed a declaration of solvency under Section 207 of the Indian Companies Act and on the day following, an extraordinary general meeting of the company was held, at which a special resolution was passed for voluntary winding-up of the company and a pleader named B.C. Bhattacharjya was appointed liquidator. On February 7, 1949, the Dominion of India, which claimed the sum of over Rs. 35 lakhs from the company on account of the taxes mentioned aforesaid, presented an application on the Original Side of the Calcutta High Court for compulsory winding-up of the company and on February 15, following, two provisional liquidators were appointed. The company resisted the application for compulsory winding-up and raised a number of points in opposition to it. The matter came up for hearing before Sinha J. and by his judgment dated April 12, 1949, the learned Judge overruled the objections raised by the company and made a winding-up order as was prayed for by the Dominion of India. Against that order, an appeal was taken to a Bench of the Calcutta High Court which came up for hearing before Trevor Harries C.J. and Chatterjee J. In support of the appeal, it was contended inter alia on behalf of the Appellants that, under Section 226(2) of the Government of India Act, 1935, the Original Side of the High Court had no jurisdiction to entertain the application for winding-up, which was presented by the Dominion of India for recovery of revenues due to it by the company. It was said that the proceeding was intimately connected with the collection and recovery of revenue alleged to be due to the revenue authorities and as Section 226(2) of the Government of India Act precluded the Court from, investigating whether the alleged debts were just and payable, the section would operate as a bar to the Court's dealing with the matter at all. The learned Judges, who heard the appeal, did not accept this contention and held that Section 226(2) of the Government of India Act did not make the winding-up petition unentertainable by the High Court. They held, however, that, as there was a bona fide dispute relating to a substantial part of the debt on which the winding-up petition was based and as the solvency or otherwise of the company could not be determined until the amount of its liability for taxes was finally decided by the Income-tax Appellate Tribunal, it was just and proper that the winding-up proceedings should be stayed till the appeals preferred by the company against the orders of assessment were finally disposed of. The result was that the order of Sinha J. ordering the compulsory winding-up of the company was set aside and the application for winding-up was directed to be kept on the file, to be taken up for hearing after the final determination of the income-tax and excess profits tax cases or appeals then pending. The provisional liquidators were to continue in the meantime and the costs of hearing before Sinha J. as well as of the appeal were to abide the final result of the winding-up application. As there was a question of interpretation of Section 226(2) of the Government of India Act involved in the case, the High Court granted a certificate under Section 205(2) of the Government of India Act and on the strength of this certificate, the present appeal has been brought to this Court.

(2.) Sir Noshirwan Engineer appearing on behalf of the Dominion of India, the principal Respondent before us, took a preliminary objection challenging the competency of the appeal. His contention is that, as the order appealed from is not a final order, the appeal is incompetent under Section 205(1) of the Government of India Act, 1935, even though the High Court has granted a certificate in terms of that sub-section. The contention, in our opinion, is well founded and must prevail. Under Section 205(2) of the Government of India Act, the appellate jurisdiction of the Federal Court can be invoked only in respect to a judgment, decree or final order passed by a High Court, provided the High Court certifies that the case involves a substantial question of law as to the interpretation of the Constitution Act or of any Order-in-Council or the Indian Independence Act, 1947, as mentioned therein. If the order appealed from does not amount to a final order, judgment or decree, a certificate given by the High Court is ineffectual by itself to attract the operation of Section 205(7) of the Government of India Act.

(3.) The expression "final order" has been used in contradistinction to what is known as "interlocutory order" and the essential test to distinguish the one from the other has been discussed and formulated in several cases decided by the Judicial Committee. All the relevant authorities bearing on the question have been reviewed by this Court in their recent pronouncement in S. Kuppuswami Rao v. The King,1947 FCR 180 and the law on point, so far as this Court is concerned, seems to be well settled. In full agreement with the decisions of the Judicial Committee in Ram Chand Manjimal v. Goverdhandas Vishandas Ratanchand,1920 LLR 918and Abdul Rahman v. D.K. Cassim and Sons,1933 11 ILR(Rang) 58and the authorities of the English Courts upon which these pronouncements were based, it has been held by this Court that the test for determining the finality of an order is, whether the judgment or order finally disposed of the rights of the parties. To quote the language of Sir George Lowndes in Abdul Rahman v. D.K. Cassim and Sons .--