IN RE: THE FRONTIER BANK LTD. Vs. STATE
HIGH COURT OF PUNJAB AND HARYANA
In Re: The Frontier Bank Ltd.
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Khosla, J. -
(1.) THE question for our decision in this case is whether this Court has jurisdiction to sanction a scheme of arrangement in respect of a company whose registered office is in Pakistan and which has complied with the requirements of Section 277, Indian Companies Act; in other words, whether Section 153 applies to such companies.
(2.) THE Company in question is the Frontier Bank Ltd., with its registered head office in Dera Ismail Khan (Pakistan). After 15 -8 -1947 the Bank complied with the requirements of Section 277, Companies Act, and thereafter on 14541 -48 a scheme under Section 153, Companies Act, 1951 Simla/19 and 20 was sanctioned by the Lahore High Courts A petition was also presented, to this Court on 16 -9 -48 and a scheme was sanctioned by that Court on 15 -7 -49. The registered office of the Bank was not transferred to India before the partition of the country, but it is said that, at the moment, all the Directors and most of the shareholders are in India. They had sot up an office in Delhi before reporting the fact to the Registrar of Joint Stock Companies under Section 277 of the Act. After a scheme of arrangement had been sanctioned by this Court, two further applications for the amendment of the scheme were made on 18 -10 -49 and 22 -10 -49 respectively. The object of these petitions was to seek an extension of time. This - necessitated the sanctioning of a new scheme. The question, therefore, arises whether this Court has jurisdiction to sanction such a scheme having regard to the provisions of Section 276, Companies Act. The argument for the Bank may be briefly summarised as follows. The Petitioner Company is to be treated as an unregistered Company by virtue of the provision of Section 271 of the Act and is, therefore, liable to be wound tip under part IX of the Act. That being so, it is to be treated as a company for the purposes of Section 153 because Section 153(6) brings such companies within the purview of that section. Section 153(6) reads as follows:
In this section the expression 'Company' means any company liable to be wound up under this Act....
(3.) AS against this, it may be argued that under the provisions of Section 276 an unregistered company (which includes a foreign company like the Frontier Bank Limited) can be treated as a company only for the purposes of Part IX of the Act and for no other purpose and, therefore, it is not a company within the meaning of Section 153(6) and, therefore, no scheme of arrangement in respect of such a Company can be sanctioned by the Court.;
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