THE RIPON PRESS AND SUGAR MILL CO LIMITED, BELLARY Vs. V GOPAL CHETTI

JUDGEMENT

(1.) This is an appeal from a judgment and decree of the High Court of Judicature at Madras, dated 13th November 1924, reversing a judgment and order dated 3 November 1922, of a single Judge of the same High Court in its ordinary original civil jurisdiction. These orders were made in the matter of a petition presented to the Court on 1 May 1922, for the compulsory winding-up of the appellant company. By the order of 3 November 1922, Kumaraswami Sastri, J., dismissed the petition with costs. On appeal his order was discharged by that of 13 November 1924, and the compulsory winding-up of the company was thereby decreed. This appeal from that order reached the Board for hearing more than six years after it had been made. Its discharge accordingly involved the supersession of all proceedings in a liquidation which as a result of it had then been in operation for more than eight years. To this fact are attributable the grave difficulties which have confronted the Board in disposing of the appeal.

(2.) The company was constituted in 1882 for the purpose (1) of erecting a cotton pressing factory at Raichur in Hyderabad and (2) of erecting a sugar factory at Hospet in the Madras Presidency of British India. It was registered in Madras solely because part of its business was to be carried on in British India. But for the Hospet project it would have been registered in the Nizam's Dominions. And the Hospet factory did not materialize. It was definitely abandoned as a project in 1909. The company has never done any business in British India. Its sole activities have been centred at Raichur in connexion with the factory which in due course was erected there. The fact that the fixed property of the company and its business have thus been in one jurisdiction and its place of incorporation and statutory obligations in another has always been a source of difficulty. It hampered the company in its competition with local rivals: it exposed it to the risk of double taxation: its accounts were necessarily kept at Raichur in the local vernacular, and the compilation of the annual statements at Bellary from these materials in a form to meet the requirements of the statute law of British India must always have been difficult and never quite satisfactory. It is unfortunate that in the liquidation no allowance appears so far to have been made for, or consideration given to, these difficulties inherent in the situation.

(3.) The company was not a private company, but its shareholders were never numerous. Its Articles of Association were those of Table A of the Act of 1882 with modifications introduced which did not affect its status as a public company. It had a nominal capital of Rs. 1,25,000 divided into 250 shares of Rs. 500 each. Of these, 200 shares were issued at the time of its formation, Rs. 250 being then called up on every share. This paid-up capital sufficed for the establishment of the Raichur factory. The 200 shares with Rs. 250 paid up were in May 1922, in the hands of 24 holders or sets of holders.