STRAUSS AND CO LIMITED; IN RE BHIMRAJ HARLALKA Vs. STATE
LAWS(BOM)-1935-4-1
HIGH COURT OF BOMBAY
Decided on April 16,1935

STRAUSS AND CO LIMITED; IN RE: BHIMRAJ HARLALKA Appellant
VERSUS
STATE Respondents

JUDGEMENT

Rangnekar, J. - (1.) THIS petition raises a somewhat difficult and important question under Sections 270 and 271 of the Indian Companies Act, 1913. In form the question is whether this Court has jurisdiction to make a winding up order against an unregistered foreign company not consisting of more than seven members.
(2.) THE facts which do not seem to be in dispute are briefly as follows : THE respondent company was incorporated in England with limited liability under the English law. It carries on business in India and its principal place of business in India is situate in Bombay. It was stated in the petition that the company consisted of more than seven persons, but it is now admitted that that statement was made, inadvertently and that the company consists of five members only. THE petitioning creditor is a creditor in the sum of about Rs. 60,000 and admittedly there are other creditors whose claims exceed that of the petitioning creditor. THE petition is founded upon the allegation that the company has stopped payment and has ceased to carry on business, and this is not disputed. From the affidavits made at a later stage of the hearing of this petition, it appears that a winding up petition was presented against the company in England on January 29, 1935, and an official liquidator was appointed. THE actual winding up order was made on February 11, 1935, that is five days after the presentation of the present petition to this Court. From the report made by the official liquidator in England it appears that there are heavy liabilities of the company and a heavy deficit, and that the unsecured creditors in England are not likely to get even half a shilling in a pound. THE company has more than forty branches in India and used to carry on extensive business in Bombay, Karachi, Madras and other places in India. The main question which is raised is as regards the jurisdiction of this Court. The material sections are Sections 270 and 271. Section 270 is in these terms : 270. For the purposes of this Part, the expression 'unregistered company' shall not include a railway company incorporated by Act of Parliament or by an Act of the Governor General in Council, nor a company registered under the Indian Companies Act, 1866, or under any Act repealed thereby, or under the Indian Companies Act, 1882, or under this Act, but save as aforesaid, shall include any partnership, association or company consisting of more than seven members. Section 271 provides that subject to the provisions of this Part, (i. e. Part IX), any unregistered company may be wound up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with certain exceptions and additions, to which it is not necessary to refer. These two sections are placed in Part IX of the Act, the heading of which is " Winding up of unregistered companies. " The expression ' company' is defined in Section 2 (2) as meaning a company formed and registered under this Act or an existing company. Sub-section (7) defines " existing company " as follows : (7) 'existing company' means a company formed and registered under the Indian Companies Act, 1866, or under any Act or Acts repealed thereby, or under the Indian Companies Act, 1882 : Having regard to the definitions, it seems to me to be clear that the expression ' company' under Sections 270 and 271 has a wider meaning.
(3.) UNDER the English Act of 1862, Section 199, it was held that an unregistered company could not be wound up under that Act unless there were more than seven members: In re Bowling and Welby's Contract [1895] 1 Ch. 663. Then came the Act of 1908, which by Section 267 gave a definition of the expression " unregistered company " materially different from that contained in Section 199 of the Act of 1862. The Act of 1908 was followed by the Act of 1929, and the corresponding section in that Act is Section 337, which is in the terms following : 337. For the purposes of this Part of this Act, the expression ' unregistered company' shall include any trustee savings bank certified under the Trustee Savings Bank Act, 1863, and any partnership, whether limited or not, any association and any company with the following exceptions : (1) a railway company incorporated by Act of Parliament, except in so far as is provided by the Abandonment of Railways Act, 1850, and the Abandonment of Railways Act, 1869, and any Acts amending them; (2) a company registered in any part of the United Kingdom under the Joint Stock Companies Acts or under the Companies Act, 1862, or under the Companies (Consolidation) Act, 1908, or under this Act; (3) a partnership, association or company which consists of less than eight members and is not a foreign partnership, association or company; (4) a limited partnership registered in England or Northern Ireland. As observed by Palmer in his Company Precedents, Vol. II, 14th Edn. , at p. 48, the definition of " unregistered company " in this Act differs from that contained in Section 267 of the Act of 1908, especially in providing that a partnership, association or company which consists of not less than eight members is not an unregistered company unless it is a foreign partnership, association or company. Section 270 of the Indian Companies Act is in the same terms as Section 267 of the English Act of 1908. Section 270, I think, consists of two parts. It begins by stating what will not be included in the expression " unregistered company ", and the excepted bodies are : a railway company incorporated by Act of Parliament or by an Act of the Governor General in Council, or a company registered under the Indian Companies Act, 1866, or under any Act repealed thereby, or under the Indian Companies Act, 1882, or under the Indian Companies Act of 1913. If the section had stopped there, it is clear that the respondent company, which is a foreign unregistered company, could not be brought within the exception, and would be included within the expression " unregistered company ". The marginal note of the section is : " Meaning of 'unregistered company. ' " In my opinion, the section, as far as it goes and confined to what I called the first part of it, is a definition of the expression " unregistered company. " Then the second part does not tell us what bodies will fall within the expression " unregistered company ", but that some particular kinds of bodies would be included within the expression. As a matter of construction it is clear that the section is not exhaustive. The words " shall include " do not amount to " shall mean and include ". It is well established that the word " include " in the interpretation clauses is intended to be enumerative and not exhaustive. It has an extending force and it does not limit the meaning of the term to the substance of the definition. When it is intended to exhaust the signification of the word interpreted, the word " means " is used. Therefore, this part of the section merely says that a partnership, association or company consisting of more than seven members is an unregistered partnership, association or company. It is clear, therefore, that other partnerships, associations or companies may be included within the expression " unregistered company ".;


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