# THE RAJAH OJ<' VIZIANAGAHA!il v. OFFICIAL RECEIVEit, VIZIANAGARAM

- **Citation:** [1962] Supp. 1 S.C.R. 344
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** K. Subba Rao, J. c. SHAH, Raghuhar Dayal, J. R Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-rajah-oj-vizianagaha-il-v-official-receiveit-vizianagaram-2425
- **Pages:** 14

## Headnote

JV inding up-Com puny I 11Wrporaled in England-U111-.uistered
company-Fureign credit-Or1-l/ can prove their
claims-Indian Companies Act, ]913 (VII of 1913), ss. 270
to 276.
The company was incorporated in England. The company took lease of certain land from the appellant. On the
application of the appellant the company was being wound up
as an unrcghtcrcd company. Certain foreign creditors of the
company filed proofs of their claim before the official liquidator. The appellant objected to their claim• being entertained on the ground that these liquidation proceedings were
only for the benefit of the Indian creditors, and that the
foreign creditors were not entitled to prove their debts in' these
proceedings. The official liquidator rejected these objections
and allowed the foreign crediton to prove their claims.
Htld, that both on account of specific provisions of the
Act and of the general principles, foreign creditors can prove
their claims in the winding up of an unregistered company.
The order of winding up of an unrcgiitercd company
operates in favour of all the crcd.itors and of all the c_ontributorics of the company. There 1s no reasonable basu for
depriving the foreign creditors
from participa~in~ in t~e
I
distribution of the assets collected by the official hqu1dator m
the winding up proceedings
in India.
All the creditors
including the foreign creditors will get ratcably out of the
assets of the company which have been collected.
When that
company itself is wound up, all of them would be enutled to
(1) S.C.H..
SUl'REME COURT REPORTS
345
similar rateable •hare in the assets collected during the winding up proceedings of the company in the country Y..'here it is
incorporated. The liquidation of the company_in countr~es
other than where the company is incorporated and has its
principal office, is just ancillary to the simultaneous liquidation
of that company in the country of its domicil. or any winding
up of the company in future. .
The rights and liabilities of the creditors and contributories respectively when a company is wound up in the
country of its domicil will be limited to their original rights
and liabilities after taking into consideration how much of
those rights and liabilities have been already satisfied during
the winding t1p proceedings of its offices in other countries.
The couits of a country dealing with the winding up of
a co1npany can ordinarily deal with the assets within their
jurisdiction and not with the assets of the company outside
their jurisdiction.
It is therefore necessary that if a company
carries on business in countries other than tht country in which
it is incorporated, the courts of those countries too should be
able to conduct winding up proceedings of its business, in their
respective countries.
Such winding up of the business in a
country other than the country in which the company was
incorporated is really an ancillary winding up of the main
company whose winding up may have been taken up already
in that country or may be taken up at the proper time.
'·
In re Commercial Bank of South Australia, L. R. [1886]
33 Ch. D. 174; In re Hibernian Met·chants Ltd., L. R. [1958]
I Ch. D. 76; In re English, Scottish, and Australian Chartered
Bank, L. R. [!893] 3 Ch. D. 385; Russian and English Bank
v. Baring Bros. [l 936] I All. E. R. 505 and Re Azoff-Don
Commercial Bank, [!954] I All. E. R. 947, referred to.
CIVIL APPELLATE JumsDIOTION: Civil Appeal
No. 225 of 1£61.
Appeal from the judgment and order dated
February 9, 1951, of the Madras High Court in
A. A.O. No. 249 of 1949.
R. Thiagarajan and P . .Ram Reddy, for the
appellant.
K. Bhimasankaram and T. V. R. 'I'atachari, for
respondent No. 1.
D. N. Mukherjee and B. N.
Ghosh, for
respondent No. 2.
1961
The Rajah of
Vizianagaram
••
Official Rtctiver,,
Vizianegaram
j !JtjJ
'J'/1e ltajah oJ.
Vi::ianogart7m
v.
Official Rei:efrer,
Vi.:Mrtagd1am
lf aglmbar Dayal J,
34U
SUPREME COl.JRT RJ<.:.i:'ORTS [l!l62] SUPP.
l961. November 6.
The Judgment of

## Text

1961
;.·tsar Sing.'a
V,
Ba/u:ant SinKh
1Vanrh~ J.
1961
}lo~mbtr G.
;144 SUPHEME COURT REPORTS (19li2] SUPP.
1
which they arc servitors. In view of our decision
on issue No. li, it is unnecessary to consider issull
No. 2 on which a finding was called for by this
Court by ita interlocutory judgment in 1958.
The appeal therefore fails;
there would be
no order as t-0 costs.
Ap11eril dismissed.
THE RAJAH OJ<' VIZIANAGAHA!il
v.
OFFICIAL RECEIVEit, VIZIANAGARAM
(K. SUBBA RAO, J. c. SHAH, RAGHUHAR DAYAL
and J. R MUDHOLKAR, JJ.)
JV inding up-Com puny I 11Wrporaled in England-U111-.uistered
company-Fureign credit-Or1-l/ can prove their
claims-Indian Companies Act, ]913 (VII of 1913), ss. 270
to 276.
The company was incorporated in England. The company took lease of certain land from the appellant. On the
application of the appellant the company was being wound up
as an unrcghtcrcd company. Certain foreign creditors of the
company filed proofs of their claim before the official liquidator. The appellant objected to their claim• being entertained on the ground that these liquidation proceedings were
only for the benefit of the Indian creditors, and that the
foreign creditors were not entitled to prove their debts in' these
proceedings. The official liquidator rejected these objections
and allowed the foreign crediton to prove their claims.
Htld, that both on account of specific provisions of the
Act and of the general principles, foreign creditors can prove
their claims in the winding up of an unregistered company.
The order of winding up of an unrcgiitercd company
operates in favour of all the crcd.itors and of all the c_ontributorics of the company. There 1s no reasonable basu for
depriving the foreign creditors
from participa~in~ in t~e
I
distribution of the assets collected by the official hqu1dator m
the winding up proceedings
in India.
All the creditors
including the foreign creditors will get ratcably out of the
assets of the company which have been collected.
When that
company itself is wound up, all of them would be enutled to
(1) S.C.H..
SUl'REME COURT REPORTS
345
similar rateable •hare in the assets collected during the winding up proceedings of the company in the country Y..'here it is
incorporated. The liquidation of the company_in countr~es
other than where the company is incorporated and has its
principal office, is just ancillary to the simultaneous liquidation
of that company in the country of its domicil. or any winding
up of the company in future. .
The rights and liabilities of the creditors and contributories respectively when a company is wound up in the
country of its domicil will be limited to their original rights
and liabilities after taking into consideration how much of
those rights and liabilities have been already satisfied during
the winding t1p proceedings of its offices in other countries.
The couits of a country dealing with the winding up of
a co1npany can ordinarily deal with the assets within their
jurisdiction and not with the assets of the company outside
their jurisdiction.
It is therefore necessary that if a company
carries on business in countries other than tht country in which
it is incorporated, the courts of those countries too should be
able to conduct winding up proceedings of its business, in their
respective countries.
Such winding up of the business in a
country other than the country in which the company was
incorporated is really an ancillary winding up of the main
company whose winding up may have been taken up already
in that country or may be taken up at the proper time.
'·
In re Commercial Bank of South Australia, L. R. [1886]
33 Ch. D. 174; In re Hibernian Met·chants Ltd., L. R. [1958]
I Ch. D. 76; In re English, Scottish, and Australian Chartered
Bank, L. R. [!893] 3 Ch. D. 385; Russian and English Bank
v. Baring Bros. [l 936] I All. E. R. 505 and Re Azoff-Don
Commercial Bank, [!954] I All. E. R. 947, referred to.
CIVIL APPELLATE JumsDIOTION: Civil Appeal
No. 225 of 1£61.
Appeal from the judgment and order dated
February 9, 1951, of the Madras High Court in
A. A.O. No. 249 of 1949.
R. Thiagarajan and P . .Ram Reddy, for the
appellant.
K. Bhimasankaram and T. V. R. 'I'atachari, for
respondent No. 1.
D. N. Mukherjee and B. N.
Ghosh, for
respondent No. 2.
1961
The Rajah of
Vizianagaram
••
Official Rtctiver,,
Vizianegaram
j !JtjJ
'J'/1e ltajah oJ.
Vi::ianogart7m
v.
Official Rei:efrer,
Vi.:Mrtagd1am
lf aglmbar Dayal J,
34U
SUPREME COl.JRT RJ<.:.i:'ORTS [l!l62] SUPP.
l961. November 6.
The Judgment of the
Court was delivered by
-
.
RAGHUBAR DAYAL, J.-This i~ an appeal un
certificate granted by the H;igh Court of Madras.
The question for determination in this appeal is
whether foreign creditors of a firm which was incorpox:ated in England and carried on business in
India can "'prove their clailps in the winding up
proceedhigs of the firm as an unregistered company
in India.
The facts leading to tho appeal are that the
Vizial.lAgaram Mining Co. Ltd., hereinafter called the
company, was incorporated in England,
u~der the
English Companies Act then in force, on December
8, 180.4, tho object of the company being
to
mine manga~~se ~re and some other minerals hi
India. Its princ,ipal pl1j-pe of business in India was
at Kodur, :Vizagapatam. District.
·
The company took certain land' on lease
from tho Rajah ofV-izianagaram, the appellant ..
Its
business did
not
prove
profitable
and
it
was not in a position
to pay the rent to
the lessor or to pay
its creditors.
On tho
application on b&half of the Rajah Vizianagaram, ordE.>rs for the winding qf the company were
passed by the High Court on March 6, 194<>.
The
Official Receiver of Vizagapatam was appointed
Official Liquidator of the company.
Thereafter,
the liqui~tion proceedings were transferred to the
District Court of Vizag'apatam. The. Official Liquidator realised about two lakhs of rupees from the
assets of the company in India.
Corbin foreign
creditors of the company...filed proofs of their 'claims
before the Official
~iqdidator.
The appellant
objected to their claims4/eing entertained on the
ground that these liquidation proceedings were only
for the benefit of tho~ndian creditors and that
foreign creditors were not entitled to prove their
debts in these proceedings. 'The Officia1 Liquidator
'
,
-
( lJ S.U.lt.
SUPREME COUltT REPOlt'l'S
347
rejected these objections and allowed the foreign
crnditors to prove their claims.
The appellant then filed an ap]Jlicatiu11 under
s.183 of the Indian Companies Aut, 1913 (Act VII of
1913), hereinafter called the Act, for the expunging
of the proofs of all foreign creditors and for delet·
ing their names from the certificate of the Official
Liquidator filed under rule 90 of the rules framed
under the Act, in the Court of the District Judge,
Vizagapatam. The application was dismissed by
the District Judge. Against this order the appellant filed an appeal, C. M. A. 249 of 1941), in the
High Court. The High Court dismissed the appeal
holding that the foreign creditors could prove their
claims in the proceedings. Thereafter, the appellant applied for a certificate under Art. 133 of the
Constitution. The High Court granted the certificate and hence this appeal.
Learned counsel for the appellant has supported the contention that foreign creditors cap.not
prove their debts in a winding up of the company
in India, on three grounds. They are :
(i)
the winding up of a comI.Jany incorporated outside India as an unregistered company, in pursuance of the provisions
of
sub-s. (3) of s. 271 of the Act is really the
winding up of the unregistered company as
an independent and separate entity from that
of the main company incorporated outside
India, and is therefore limited to the realisation of Indian assets and their distribution
to Indian creditors;
(ii) as the Liquidator appointed by the
Court in India cannot get at the foreign assets and contributories, it is just that foreign
creditors be not allowed to prove their debts
here;
1961
The RaJah 1J,,
Vizianagaram
v.
Offitial Receiver,
Vizianagaram
Raghubar Dayal J.
19GJ
7 lit Raja11 of
Vi.:ianqo1a111
v.
Uffi1ia/ 11trticr,
Vi;;ianagar.,,11
:J-!8 SUPREME (;OURT REPORTS f 1962] SUPP.
1
(iii)
ev,011 if foreign creditors can prove
their debts in such winding up procet->dings
they should be allowed to prove only such
debts which have some relation to the business of the company in India.
On the other hand, it is contended for the
respondents that the Indian creditors are free to
prove their claims in foreign countries and therefore no prejudice is caused to them by allowing
foreign creditors to prove their claims in the winding up proceedings in India, th<lt the Act made no
distinction between foreign and Indian creditors
for tho purpose of the proceedings under the Act
and that in reality it is the main company which
is being wound up though only with respect to tho
business conducted by it through its offices in India
and therefore there should be
no bar to the
proving of their claims by the foreign creditors.
\Ve are of opinion that the High Court took tho
correct view of the legal position in holding that
the foreign creditors could prove their claims in
these winding up proceedinge.
Section 27 0 of the Act defines 'unregistered
company' and it include& any partership, association or company consisting of more than seven
members and does not include certain companies
which come within the companies excluded by the
section. This definition of 'unregistered company'
is for the purpose of Part IX of the Act, w hi oh
consists of as. 270 to 276 and deals with the winding up of unregistered oompanies.
Sub-section (3)
of a.271 provides that where a company incorporated outside India which has been carrying on business in India ceases to carry on business in India,
it may be wound up as an unregistered company
under Part IX, notwithstanding that it has been
dissolved or othorwiRe oeased to exist as a company
under or by virtue of the laws of the country under
which it was incorporated. It is in pursuance of
..
(1) S.C.R.
SUPREME COURT REPORTS
349
the provisions of this sub.section that the company
is being wound up as an unregistered company.
Sub-section (1) of s. 271 which deals with the
winding up of unregistered companies, pruY:des
that any unregistered company may be wound up
under the Act and all the provisions of the Act
with respect to winding up shall apply to the un·
registered company, with the exceptions and addi·
tions specified in the sub-section. This makes all
the winding up proceedings subject to the provisions
in other parts of the Act as well. Clause (iii) of
sub. s. (1) mentions the circumstances in which an
unrei;istered company' may be wound up.
Section 272 deals with the contributories with.
the winding up of unregistered companies, and does
not make any distinction between the persons who
can be contributories on the ground of their being
Indian na tional8 or foreigners. All persons who
are liable to make certain payments are considered
contributories. Similarly other provisions of the
Act which have a bearing on the winding up proceedings makes no distinction between Indian or
foreign creditors or between debts with respect to
the business carried on in India or with respect to
the business of the company outside India.
Section 156 provides, in its sub-section (I),
that every present and past mem her would be
liable to contribute to the assets of the company
to any amount sufficient for payment of its debts
and liabitities when a company is being wound up.
Section 158 defines tho expression 'contributory'
which means 'every person liable to contribute to
the assets of the company in the event of its being
wound up'.
Section 166 provides for an application to the
Court for the winding up of a company. Any
creditor or contributory is entitled to apply for
the winding up of the company. No distinction
is made between the creditors resident in India or
outside India. Section 167 specifically states that
1961
Th, Rq:ah of
Vizianagarll?'I
OfficialRectfoer,
VizianagarQJn
RagAuhar Dayal J.
11~1
Tiu Rajah of
Vi.:ianataram
Y,
O.lfi~iol &uft·fY,
f,.z.:1cnagmam
350 SUPREME CO"L'RT REPORTS [1962] SUPP.
an order for winding up of a company shall operate
in favour of all the creditors anrl of all the contributories of the company 11s if made on the joint
petition of a creditor and of n contributory. It is
not possible therefore, to urge succes~fully, that
Ilaihuhar Da;al J. thn order of winding-up of an unrPgistcred company
does not operate in favour of nil the l·rcditors and
of all the contributories of the cr•mpnny. All the
creditors of the company ca.n tiikc advantage of the
winding up of tho company aR opcrnting in India
when it has ceased to carry on lmsinc,s tlwrc.
There is no reasonable basis for 1.lepri\•i.J1g thPm
from participating in the distribution of the ns8ets
collected by Official Liquirlator in tht> win<ling up
proceedings. All the creditors including tho foreign
creditors will got rateably out of the assds of the
company which ha.vo been collected. When that
company itself is wound up, a.II of them won Id br
entitled to similar rateable share in the nBActs
collcckd during the winding up proceedings of tl1e
cfJmpuny in tho country where it is incorporatcrl.
Likewise, s. 211, provides th<tt the property
of a company shall, on its winding up, be applier!
in satisfaction of it~ liabilit.ie8 pari prr..~.m and,
subject to such application, shall, unlt>ss the articles
otht>rwis€l
provi<le, be
<listrihutrd amoug
tht>
mem!wrs <tccording to their riizhts and interests in
thr company. and thns me.kc~ it f'l<•ar t.hat all the
creditors of th" company ha\"c to get a rnteab)P
share out of the property of the company and that
surplus, if any, will be
disrrihnkcl
among the
memhers of the company.
Section 228 provides t.hat in every winding np
all dcbta payable on a contingency and al! claimg
against the company shall be admi•sible to proof
against the company. No exception is made. All
the debts against the company in the winding up
can be proved. Such claims can include the claims
of foreign creditors.
(I) s.c.R. SUPREME COURT REPORTS
351
It is therefore clear that no support can be
found for the contention for the appellant from the
provisions of the Act.
The Courts of a country dealing with th"' winding up of a company can ordinarily deal with the,
assets within their jurisdiction and not with the
assets of the company outside their jurisdiction.
It is therefore necessary that if a company carries
on business in countries other than the country in
which it is incorporated, the Courts of those countries too should be able to conduct winding-up
proceedings of its business, in their respective
countries. Such winding up of the business in a
country other than the country in which the
company was incorporated is really an ancillary
winding up of the. main company whose winding up
may have already taken up in that country or may
be taken up at the proper time.
It appears that. so long as the company as
such is able to carry on business profit'l.bly and be
in a position to meet its liabilities, neither the
company nor its creditor nor its contributory would
think of the winding up proceedings even if the
company ceases to carry on bnsine~ in any particular country. The persons interested in the
company will be getting their proper return on the
amount lent or contributed. Ordinarily, the winding up of the company will be proceeding simultaneously in the various countries where it carried
on business whenever the business of the company
has ceased to be profitable and the company is
reduced to a position in which it is not expected to
make good its liabilities.
It is the company incorporated outside India
which is really wound up as an un-registered company in this country. In fact, there is no separate
un-registered company which is being wound up
here. The various branch offices of the company
in India cannot be deemed to be the branches of
1961
The Rajah of
J' i,;;ianagaram
v.
Official Receii·er,
Vizianagaram
Ra:hubar- Dayal J.
1961
Th Rajah of
Viziatiagarmn
Y.
OJTuial P.euiver,
Vi.:ianagaram
Raghu'bar Dayal ·J,
352 SUPREME COURT REPO~TS [1962] SUPP.
l
an independent unregistered company. Sub-section
(3) of s. 271
itself.say~ that-·the ·company incorpo.
rated outside India may be wound up as an unre_gistered company_ whei:i it ce;ises to carry on
brisiness in tndia. Further, th~re are no separate
creditors or contriblJtories of "the so called
unregistered company. There arc. no separate creditors. or contri~utories pf thti: offices or branches of
the company .in India.
All the creditors and
co1}trib4totiea are really oreditors and contrihi1tories of the corripa:ny incorporated outside India
and.therefore .all of, the;m, on· princfple, should be
able to do what creditors and -contribu.torios
resident in India cap d~ in the will¢!ing up proceed.
in~.
.
-
'
.
-
.
There hall' been ca,se law _with respect to the
rn,i.ture of winding 'up proceedings in the various
countries and the procequre followed in such wind.
ii)g up.
In In .re Gommer()ial Bp,nk.of South A1tstralfo(i)
a company incorpm;ated in Australia. carried on
business in England where it haa a large number of
creditors and a large nmpbe'r, of assets.
.A. pet_1.ion
for winding up was miide in England. Subsequeμtly,
proceedings for the winding μp of the !lOmpany
were also taken in Australia.
The jurisdiction of
the English Court to continue the winding up proceedings was questioned. In considering this question, North J., said at·pa,ge 178:
"I think, tlierefore, that the English cretlitors are entitled to have a winding-up· order
made by this Court. I do not think it would
be ·right ~o insert any special ~irections i~ ~he
order; tlhs is not the proper time for g1vmg
such-<lirecti~. But l. will say this, that I
think the winding-up here. will be. ancillary to
·a winding-up in Australia, and, if I have the
control of the proceedings here, I will take
care that there shall . be no conflict between
(l) L.R. [l886P3 Ch.D. 174.
{I) S.C.R. SUPREME COURT REPORTS
353
the two Courts, and I sha.11 have regard to the
interests of all the creditora and all the contributories and shall endeavour to keep down
the expenses of the winding-up so far as is
possible ...... I do not think that I ought to
insert any special directions in the order. But
I think that the liquidator ought not to act
without the special directions of the Judge in
Chambers, except for the purpose of getting
in the English assets and settling a list of the
English creditors."
This order was construed in In re Hibernian
Merchants Ltd. {') to be not a restriction of the
rights of the liquidator to deal with the English
assets alone for the benefit of the English creditors
only, but to be a direction for the English Liquidator to take directions of the Judge when he had to
take action with respect to the other assets and
when settling a list of cr'lditors other than the English creditors. It is to be noticed that North J.,
himself said that he would have regard to the interest of all the creditors and of all the contributories
which means that the winding-up
proceedings
were not concerned with respect to the English
creditors a.lone.
In In re English, Scottish, aiul .4.ustmlian Chartered Bank {') a chartered banking company, the
principal business of which was in Australia, stopped
payment, and was ordered to be wound up in England. Meetings of the shareholders and creditors
were held under the orders of the Judge to ascertain
their wishes as to the proposed scheme of reconstructbn. The wishes of the creditors resident in
Australia were obtained through proxy papers which
were sent to those creditors. The creditors recorded
their views on those papers and deposited them at
the offices of the company at the principal cities in
Australia.' The particulars and number of the proxies for and against the scheme were then
(I) L.R. [1953) I Ch. D. 76.
(2) L.R. [1893] 3 Ch. D. 365.
1961
The Rajah of
Vizionagaram
••
Offuial Rereiver1
Vizianagaram
Baehub11r Da1al J.
/!Ml
Th. Rajah of
J'~iana1.,am
v.
1 0 Jf~~a/ Rutiur,
Vi.:umt1garam
.Haghubar DIJJa/ J,
354 SUPREME COURT :REPORTS [1962) SUPP.
telegraphed to the Official Receiver in England. It
was found that ifthe votes of the Australian creditors
were taken into consideration, the scheme had the
necessary majority in its favour, but if they were
excluded, the majority were against the scheme.
The Judge sanctioned the scheme.
On appeal,
objection was taken to the procet'ldings on several
grounds. The objections did not include an objection similar to the one before us for determination,
but considering the various objections, it was Haid
at page 394 :
"One knows that where there is a liquidation of one concern the general principle isascertain what is the domicil of the comp1my
in liquidation; let the Court of the country of
domicil act as the principal Court to govern
tho liquidation; and let the other Courts act
as ancillary, as far as they can, to the principal liquidation. But although that is so, it
has always been held that the desire to assist
in tho main liquidation-the desire to act as
ancillary to the Court where the main liquidation is going on-will not ever make the
Court give up the forensic rules which govern
the conduct of its own liquidation."
This makes it clear that the liquidation of the
company in countries other than where the company
is incorporated and ha.s its principal office, is just
ancillary to the simultaneous liquidation of that
company in the country of its domicil or any winding up of the company in future. That is to say,
the winding up of the company in those countries
is just complementary to the winding up of the
company in the country of its domicil. The rights
and liabilities of the creditors and contributories
respllctively when a company is wound up in the
country of its domicil will be limited to their qriginal rights and liabilities after taking into consideration how much of those rights and liabilities have
-f
(l) S.C.R. SUPREME OOURT REPORTS
355
be<'n already satisfied during the winding up proceedings of its offices in other countries.
In Russian and English Bank v. Bari111J Brotliers(') the facts were that the Bank incorporated
in Russia under Russian law, with its head office
at Petrograd, was dissolved sometime in January
1918. This Bank had a branch iin England. The
London branch of the Bank had two large sums of
money with Baring Brothers. On March 23, 1921,
·the Bank brought a.n action against the Ba.ring
Brothers i_n the Chancery Division of the High Court
of Justice for the recovery of those sums. The
Baring Brothers prayed that all further proceedings
in the action be stayed on the ground that the
'action bad been commenced or, at all events, was
being continued in the name of a plaintiff who was
non-existent.
In 'considering this matter, Lord
Atkin ea.id: .
"The legislature has provided that a.
dissolved foreign corporation may be wound
up in accordance with the provisions of the
Companies Act. The provisions of the Companies Act as to winding up are only applicable to corporations which are in existence.
Are we to say that the legislative enactment
is completely futile : or is there another solu.
tion? My '.Lords, I think that we are entitled
to imply, indeed I think it is a necessary
implication, that the dissolved foreign comp'lny is to be wound up as though it had not
been dissolved and therefore continued in
existence. This seems to me with respect
the necessary result of saying that it shall be
wound up in accordance with the provisions
of the Act ......... I see nothing incongruous in
the legislature saying in effect, we accept
the existence of a foreign corporation coming
to trade in this country;, we shall only
(I) (1936) I. All. E. R. 505, SIS.
1961
The Rajah of
Yititinagaral'JI
••
Official Rtceivu,
Vizianagaram
R•g/,,,bar D'!)'al J.
10~/
T/,, R•jal: of
Vi;:iana:aram
Y,
0 fficial R#flHr,
VUianagmam
356 SUPREME COURT REPORTS [1962] ruPP.
impose a condition of registration. But if
the corporation does trade here,
acquires
assets here, and
incurs debts here,
we
shall not accept
its dissolution
abroad
without a stipulation that if desirable it may
be wound up here so that its assets here shall
be distributed amongst its creditors (I do not
stay to considert whether its English creditors
or creditors generally) and for the purpose of
the winding up it shall be deemed not to have
been dissolved: for that event would defeat
our municipal provisions for winding up a
corporation. This does not appear to me to
be re-creating or reconstituting a new corporation: it is for particular and limited purposes refusing to recognise the dissolution of
t.he old."
It is clear from these observations that the winding
up of the dissolved company incorporated in Russia
was deemed to be the winding up of that very
company and not of any factitious company composed of the branch of that company in England.
'fhe main qut>,stion before us however was deliberatoly left open for consideration later. The observations however go against the appellant's contention
that the so called un-£egistered company which is
being wound up should be deemed to be a separate
entity from the original company incorporated in
Englll.nd.
In Re AzoJf-Don Commercial Bank(') proceedings for the winding up of a Russian company
which had been carrying on business in England
was taken in England. This company had been
dissolved prior to the proceedings under the laws
of the Union of Soviet Socialist Republios.
The
petitioners for the winding up of this company were
certain Norwegian Banks who were creditors of the
company. The petition was opposed by the Crown
and another person who was held to have no locus
(1) [l 9S4] I. All. E. R. 947.
1
( l) S.C.R SUPREME COURT REPORTS
357
st.andi to object. Of the grounds on which the
Crown objected to the petition, one was that the
Court should not make a winding up order at the
suit of foreign creditors in respect of debts payable
in Norwegian kroner, but that it should leave the
Crown to get in the English assets with a view to
the Crown being in a position to make ex gratia
payments among English creditors in respect of
rouble debts. In considering this objection it was
said at page 956 :
"The object of a winding-up order is to
ensure distribution of the assets among the
whole body of creditors.
No other basis of
distribution would be fair."
In In re HibernwnMerchants Ltd.(') a creditor
applied for the winding up of a company incorporated in the Republic of Ireland and having a place
of business and assets in the United Kingdom. A
request was made that the winding up order should
include the expression 'that the Liquidator shall
not aot in pursuance of the order except for the
purpose of getting in the English assets and settling the list of the English creditors without applying
to the Court for directions'. It was held that the
provisions of the Companies Act, 1948, do not
provide for making such exceptions in the winding
up order.
We are therefore of opinion that both on
account of the specific provisions of the Act and of
the general principles, the view taken by the Court
below that foreign creditors can prove their claims
in the. winding up of the unregistered company is
correct.
We therefore dismiss the appeal with coats.
Appeal disrnissed.
--
L.R. [1958] I Cb. D. 76.
1961
TlieRajaliof
Vizillrlagaram
v.
Official Receiver,
Vi.cianagaram
Rathuhar Dayal J,