UNION OF INDIA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This is an appeal from an order made by S.P. Mitra J, on the 9th March, 1961 declaring certain rules framed by the Supreme Court of India under the provisions of the Indian Companies Act, 1956 ultra vires.

(2.) In course of the winding up of Fire and General Insurance Co. of (India) Ltd. and other companies in liquidation the question for payment of Auditor's fees in terms of Rule 304 of the Companies (Court) Rules 1959 as framed by the Supreme Court of India under Section 643 of the Companies Act 1956 came up for consideration before the learned Company Judge. On the 25th November, 1960 upon going through the report of the Assistant Registrar (Company) the learned Judge directed the matter to be placed in his list on 16th December 1960 to give an opportunity to the Central Government and the Official Liquidator to make their submissions on the points raised. On the 16th December, 1960 the learned counsel Mr. R. Chaudhuri appeared for the Central Government and the Official Liquidator and wanted to contend that the relevant rules of the Supreme Court were ultra vires the companies Act, 1956. The learned Judge thereupon requested Mr. Gouri Mitter a learned counsel of this Court, to appear as emicus curiae. On 20th January, 1961 after hearing the argument of Mr. Chaudhuri, the learned Judge directed the Assistant Registrar (Company) to write to the Registrar of the Supreme Court informing him of the contentions raised by Mr. Chaudhuri. The Assistant Registrar thereupon wrote to the Registrar of the Supreme Court as directed but no reply was received from the Registrar.

(3.) The relevant rules of the Companies (Court) Rules 1959 which have a bearing on the question at issue are Rules 301, 302, 303 and 304 of the Rules framed by the Supreme Court. Before the learned Company Judge it was strenuously contended by Mr. Chaudhuri appearing for the Central Government and the Official Liquidator that these Rules which had been framed by the Supreme Court under Section 643 of the Companies Act, 1956 which empowers the Supreme Court to frame certain specific Rules as contemplated by that section after consulting the High Courts were ultra vires and it was after hearing the arguments if Mr. Chaudhuri and of Mr. Gouri Mitter that the teamed Judge upheld the contentions put forward on De-half of the Central Government. Having thus succeeded before the teamed Company Judge in inducing the learned judge to give effect to the contentions raised on its behalf, the Central Government has now preferred an appeal against their success and It is contended by Mr. Subimal Roy, the learned counsel representing the Union of India before us, that the said Rules 301 to 304 are more vires and the whole argument of Mr. Chaudhuri challenging the vires of those provisions was based on misconception and the decision of the learned Judge on the points is erroneous. As we entertained doubt about our Jurisdiction to entertain such an appeal by the Union of India who was the successful party before the trial Court and whose contentions were fully given effect to by the learned Judge and the party appealing could by no stretch of Imagination be regarded as a party aggrieved by the order or the learned Judge, we asked the learned counsel to address be on the question of maintainability of the appeal. The learned counsel has therefore argued not only the the question of maintainability of the appeal but also the main question as to the vires of Rules 301 to 304 of the companies (Court) Rules of 1959.