HEMENDRALAL ROY Vs. INDO SWISS TRADING CO LTD

JUDGEMENT

(1.) This is an appeal by de-fendants 1 to 4 from an order passed by the learned Additional Subordinate, Judge of Hazaribagh in Title suit No. 2 of 1944 granting an injunction restraining them from tak-ing possession of the disputed property. The application in revision which is also filed by them is directed against an order allowing amendment of the plaint. Defendants l to 3 are brothers, who, will be referred to hereinafter as the Roys. In 1928 they formed a partnership called Lalji and Co., (defendant 4). In the same year Lalji & Co. applied to the Provincial Government for a license under the Electricity Act (9 of 1910) to, supply electrical energy to Giridih town and the neighbourhood. They intimated to the Government that they wanted to float a company, and after that was done, the business would be transferred to the company. On 9 July 1929. the Government granted, a license to Lalji & Co. Then a company was floated called the Giridih Electric Supply Corpora, tion which was registered on 6 September 1929. This Corporation is defendant 7 and will be referred to hereinafter as the company.. On 14th September 1929 two agreements were entered into between Lalji & Co. and the company to the effect that Lalji & Co. would be the Managing Agents of the company and the company would conduct the business in their name during the period previous to the transfer of the license. In due course a powerhouse was erected and the necessary plant, machinery etc., were installed ; and the company began to supply electrical energy to Giridih town and the neighbourhood from about 14 March 1931. In November 1932 Lalji & Co., applied to the Government for permission to transfer the business to the company. Permission was, however, refused in 1933.

(2.) On 17 July 1984 the Roys were adjudicated insolvent by the Calcutta High Court on the application of certain creditors. In the list of assets filed by the Roys in the insolvency proceeding, they claimed the plant, machinery etc., that is to say, the entire electrical undertaking, valued at Rs. 2,41,898-13-8 to be theirs. The Official Assignee appointed in the insolvency proceeding could not be put in actual possession of the undertaking by reason of the provisions of the Electricity Act. He appointed N. L. Roy, defendant 3, to Carry on the electrical undertaking at Giridih on his behalf. On 20 August 1935 this Court passed an order winding up:the company, and on 6 September 1935 an Official Liquidator was appointed. This gentleman desired to take possession of the assets of the company, but he was told by Lalji & Co., that the undertaking belonged to them to whom the license had been granted and as they had been adjudged insolvents by the Calcutta High Court, the undertaking was in the possession of the Official Assignee of that Court. At the instance of the creditors and the Official Liquidator, the Official Assignee of the Calcutta High Court made enquiries as to whether the electrical undertaking at Giridih really belonged to the company or to the insolvents. The Official Assignee, being of opinion that the undertaking really belonged to the company, gave up all claim to the electrical undertaking in March 1938. The Official Liquidator thereupon pressed the Roys to give up possession to him of the assets of the company. They refused to do so, whereupon the Official Liquidator filed an application under Section 185, Companies Act, in this Court. That application was allowed by Wort J. on 5 January 1940. In pursuance of his order, the Official Liquidator took possession of the entire undertaking on 12th January 1940. Against the decision of Wort J. the Roys preferred a Letters Patent appeal which was allowed on 9 May, 1940, by Harries C. J. and Manohar Lall J. on the ground that the Roys being in possession of the undertaking not as officers or agents of the company but in assertion of their own right, the application under Section 185, Companies Act, was not maintainable, and possession could only be obtained from them by means of a suit. It was, however, found that "the company were prima facie entitled to the moveable properties which had been acquired by the corporation, though they were not entitled to posses, sion of the land upon which the power-house stood."

(3.) The Roys then applied for restitution, but their application was rejected by Agarwala J. on 16 August 1940. Against his decision the Roys preferred a Letters Patent appeal which was eventually allowed on 26 October 1943, in these terms: In the oircumstances, restitution must be allowed, but subject to this condition, which is necessary to impose for the ends of justice, that delivery of possession to the appellants will be postponed for three months from this date to enable the respondent to bring a suit, if so advised, and obtain such relief as may be open to him in law.