THE OFFICIAL LIQUIDATOR OF M E MOOLA SONS LTD Vs. PERIN R BURJORJEE

JUDGEMENT

(1.) This appeal is concerned with the question whether a creditor's proof lodged by the respondent in the liquidation of the company whose liquidator is the appellant and rejected by the liquidator was properly so rejected. On 23 December 1929, the trial Judge on the original side of the High Court of Judicature at Rangoon held that the proof was rightly rejected. On 4 August 1930 this decision was reversed on appeal to the appellate side of the Court. The proof in question was for Rs.68,219-15-0, damages alleged to have been incurred by the respondent by reason of the failure of the Company to complete the purchase of property agreed to be sold by the respondent by an agreement dated 27 July 1921. The only question in issue or debated at the hearing before the trial Judge, or on the appeal was whether the agreement for sale (on the face of which the purchaser was one M. E. Moolla) had been entered into by Moolla on his own account or whether the Company was the undisclosed principal of Moolla in respect of such agreement.

(2.) The trial Judge held that Moolla had entered into the agreement as principal and had afterwards transferred the benefits of it to the Company and that therefore the Company was under no liability to the respondent. The appellate Court held that the Company was the undisclosed principal and was liable to the respondent and that the proof had been wrongly rejected. Against this decision the liquidator appealed to His Majesty in Council and before their Lordships Board raised the contention that the agreement of 27 July 1921 required registration under the Indian Registration Act, that it had not been registered and that as it had not been registered it could not be used for any purpose whatever and ought to be ignored by the Court with the result that any claim for damages based by the respondent upon breach of that agreement must necessarily fail. The questions therefore which arise for their Lordships' consideration are: "(1) Ought the appellant to be allowed to raise now for the first time before the tribunal of last resort the question as to the registration of the agreement? (2) If the question as to registration can now properly be raised (a) did the agreement which admittedly was not registered require registration and (b) if it did require registration what is the effect of nonregistration in regard to the respondent's right to claim damages under the agreement? (3) If the question as to registration cannot now be properly raised or if it can be properly raised but upon consideration of the merits of the question it is held that the nonregistration of the agreement does not preclude the respondent from putting forward a claim for damages under the agreement whether the company was or was not the undisclosed principal of M. E. Moolla in regard to the agreement?"

(3.) To enable these questions to be considered, it will be convenient to state the facts as far as they are proved or admitted. The Company was formed under the Indian Companies Act 1913, on 21 January 1921, as a private company. Cl. 3 (6) of the Memorandum of Association enabled the Company to acquire by purchase, lease, exchange or otherwise land buildings and hereditaments of any tenure or description in Burma. By Articles of Association 115 and 116 (2) the directors had power to purchase for the Company any property which the Company was authorized to acquire.