Registrar Joint Stock Companies, Jammu and Kashmir Govt. vs Mr. Harbans Bhagat and others

Shahmiri, J.—The facts giving rise to this appeal against an order of the learned Judge in Chambers, Wazir C.J. are briefly these:

The Jammu and Kashmir Industries Ltd. had been voluntarily wound up. The Registrar Joint Stock companies presented an application before the

learned Single Judge of this Court praying for winding up of the aforesaid company by the Court or failing that under supervision of the Court. The;

learned Judge in chambers held that the applicant, Registrar Joint Stock companies, had no locus standi to make this application in this Court, but

inasmuch as no objection had been raised on behalf of the Creditors to the liquidation proceedings being continued under the supervision of the

Court and as the Voluntary liquidator had himself made a similar prayer the learned Judge ordered that the liquidation proceedings should in future

be conducted under the supervision of the Court and directed the voluntary Liquidator to furnish the list of the assets and liabilities of the Company

to the Court within two weeks. The registrar Joint stock companies has preferred an appeal against this order of the learned Judge in Chambers.

It would be seen that as the alternative prayer of the appellant, i.e., that the Company be wound up under the supervision of the Court, has

already been granted the issue raised in this appeal has merely an academic interest. We have heard' the learned counsel for the parties in regard to

this issue and we come to the conclusion that the finding of the learned Judge in Chambers in this case to the effect that the appellant could not

make an application of this nature is substantially correct. In this connection two main points have been argued by the learned counsel for the

appellant.

The first point urged is that the voluntary winding up in this case was not valid, inasmuch as the resolution that was passed by the Company that

it could not by reason of its liabilities continue its business was a special resolution and not an extraordinary resolution as required by S. 209A read

with Ss. 207(3) and 203(3) of the Jammu and Kashmir Companies Act, 1977. The only difference between an extraordinary resolution and a

special resolution is that in order to move a special resolution a notice of not less than 21 days, specifying the intention to propose a resolution, is to

be given, vide S. 81 of the Jammu and Kashmir Companies Act 1977.

Thus, where a special resolution has been passed, it does not show that any prejudice has been caused to the interests of either the members or the

creditors of the Company. The passing of a special resolution instead of an extraordinary resolution would rather more fully safeguard the interests

of both. In a case where all the formalities specified in S. 209-A have been complied with, a mere technical mistake in giving the resolution its

proper name could not, in my opinion, amount to a defect which would in any way vitiate or invalidate the act of voluntary winding up of the

Company. There is, therefore, no force in this point.

The second point urged is that even in a case where a Company has been voluntary wound up there is no express bar which prevents the

Registrar Joint stock companies to approach the Court for compulsory winding up of the Company. As observed by the learned Judge in

Chambers in his judgment, under S. 166 of the Companies Act the Registrar is entitled to present an application for winding up of the company

where it is carrying on its business and not after it has gone into liquidation. There is no other provision in the Companies Act by which the

Registrar has the right to institute an application for compulsory winding up of a Company when it has already been voluntarily wound up.

On the other hand while the right of applying to the Court for winding up has been given to the Company or to any of its creditors or contributories

or the Registrar under S. 166 of the Jammu and Kashmir Companies Act, 1977, S. 218 of the Act expressly lays down that winding up of a

Company shall not bar the right of a creditor or a contributory to have it wound up by the Court. The omission of the Registrar from the provision

of. S. 218 is exceedingly significant and this fortifies me in my conclusion that the Registrar had no right to take initiative in this matter. For the

foregoing reasons the order passed in this case by the earned Judge in Chambers is affirmed, and this appeal is dismissed without making any

order as to costs.

Kilam J.:

Agreed to.