MOHAMED HASAN KHALEELI Vs. PVARADARAJULU NAIDU, LIQUIDATOR OF THE TAMIL NADU LTDIN VOLUNTARY LIQUIDATION

JUDGEMENT

(1.) This appeal raises a question with regard to costs in a winding up petition. In November, 1936, a resolution was passed for the voluntary winding up of the "Tamil Nadu Limited", a company registered under the Indian Companies Act, 1913. The company had been formed for the purpose of publishing a daily newspaper in Tamil in Madras. On the 11 December, 1936, the appellant filed a petition on the Original Side of this Court asking that an order might be passed for the winding up of the company under the supervision of the Court. This action was taken as the result of a resolution passed at a meeting of creditors held on the 2nd December, 1936. On the 15 December, a further application was filed for the appointment of an interim official liquidator. These petitions came before Gentle, J., on the 27 April of this year. The learned advocate appearing for the appellant then informed the Court that his client did not propose to pursue the winding up petition and he had no interest in it. The learned Judge enquired whether any other creditor would proceed with the petition. I should mention that six creditors had entered appearances and professed to support the petition. Two of them, respondents 2 and 7, asked for time to look into the matter. Time was accordingly granted until next day when the case was again placed in the list. The learned advocate for the second respondent intimated that his client would like to continue the petition in the place of the petitioner, but later realising that he was not in a position to prove facts which would justify a supervision order being passed he informed the Court that he was not in a position to proceed further. The seventh respondent was also not willing to go on with the petition. In his case there was only a small amount due by the company. The learned Judge then passed an order dismissing both the petitions; and in respect of the petition for a supervision order, he directed that the petitioner should pay the costs of all parties appearing before him. As there were seven respondents, the voluntary liquidator and six creditors, this meant that the petitioner was required to pay seven sets of costs which would amount, we are told, to a sum of over Rs. 2,000. The petitioner has appealed against this order and contends that the learned Judge was not entitled to pass any order for costs against him.

(2.) While the position of the creditors who appeared is on a different basis, it is quite clear that the voluntary liquidator would have been entitled to his costs, because he had successfully opposed the petition. But he had agreed before the case came into Court on the 27 April that he would not press for his costs and that there should be an order dismissing the petition without costs. In these circumstances he does not ask for the dismissal of the appeal. In fact, he is quite agreeable to the appeal being allowed. The third respondent in the appeal leaves the matter in the hands of the Court. Respondents 2, 4, 5, 6 and 7 in the appeal strongly oppose the appeal.

(3.) The question involves a reference to the provisions of the rules of the Court and consideration of the principles which apply. Dealing first with the rules, Rule 27 of the Rules of the Original Side of this Court under the Companies Act, provides that every petition for the winding up of any company by the Court, or subject to the supervision of the Court shall after admission, be advertised fourteen clear days before the hearing, and the advertisement is required to be in the terms of Form No. 9 to be found at page 324 of the rules. The form reads as follows: Notice is hereby given that a petition for the winding up of the above-named company by the (or subject to the supervision of the) High Court of Judicature at Madras was on the day of 19 , presented to the High Court of Judicature at Madras, by the said company (or A.B. of a creditor or contributory of the said company, or as the case maybe). And that the said petition is directed to be heard on the day of 19: and any creditor or contributory of the said company desirous to oppose the making of an order for the winding up of the said company under the above Act, should appear at the time of hearing by himself or his Counsel or Vakil for that purpose; and a copy of the petition will be furnished to any creditor or contributory of the said company requiring the same, by the undersigned, on payment of the regulated charge for the same. Attorneys or Vakils for the Petitioners.