TMI Blog1950 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, Limited, a company carrying on chit fund business in as many as 114 branches scattered throughout the southern districts of this Province, got into financial difficulties and was ordered to be wound up by an order of this Court dated 12th January, 1948, in O.P. No. 190 of 1947, a petition filed by the creditors of the company. By its order dated 16th November, 1948, in O.P. No. 301 of 1948, this Court sanctioned a scheme of arrangement under section 153-A of the Companies Act. The order of this Court provided that for the purpose of carrying out the said scheme the Official Liquidators of the Pudukottah Benefit Fund, Ltd., should transfer its assets and liabilities to another limited company the Central Finance Syndicate Limited, Erode, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder a deed of indenture, dated 10th January, 1049, referred to as A-2 in the order of reference. The Central Finance Syndicate Limited, Erode, floated joint stock companies in some of the places where the branches of the Pudukottah Benefit Fund Limited, had been functioning for the purpose of taking over the assets and liabilities of those branches. The Sahayanidhi (Virudhu-nagar) Limited, was one such company and the assets and liabilities of the Virudhunagar branch of the Pudukottah Benefit Fund, Limited, were transferred to it by the Central Finance Syndicate Limited under a deed of indenture, dated 4th February, 1929, referred to as A-3 in the order of reference. The assets so transferred consisted mostly of book debts and promissory n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 10th January, 1949, by which the Official Liquidators transferred the assets and liabilities of the Pudukottah Benefit Fund, Limited, to the Central Finance Syndicate, in consideration of the latter agreeing to pay eight annas in the rupee to the creditors of the Pudukottah Benefit Fund Limited, in pursuance of the order of this Court sanctioning the scheme, was a composition deed liable to stamp duty under Article 22 of the Stamp Act (Schedule I-A, Article 18 of the Act as amended in Madras). With regard to the transfer A-3, dated 4th February, 1949, by which the assets and liabilities of the Virudhunagar branch of the Pudukottah Benefit Fund, were transferred by the Central Finance Syndicate to the Sahayanidhi (Virudhunagar), Limited, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nary law. There is not only a vesting of assets and property but also the imposition of a liability to discharge the debts of the transferor company as a result of the order of Court passed under section 153-A. The physical handing over of the property and assets transferred would in many cases have to be effected by the Official Liquidators who are in possession of the assets and properties of the company under liquidation and section 153-A (1), clause ( a ) , of the Companies Act empowers the Court to pass an order directing such transfer or delivery of assets to the transferee company. The title of the transferee company to the property and assets transferred as the result of the order of Court under section 153-A is derived from and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers passed by the parties in token of their having carried out the terms of the Court's order. The Stamp Act subjects to duty instruments falling within the description of documents specified in Schedule I and for fixing the duty payable, the substance of the documents should be looked into. It is not possible therefore to accept the contention of the plaintiff that these documents merely incorporated the terms and conditions of the order passed by this Court and therefore they do not require to be stamped as independent transfers of property. The document referred to as A-2 purports not only to carry out the terms of this Court's - order but goes much further. There is an undertaking on the part of the transferee company to pay a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents referred to as A-2 and A-3 ex facie purport to transfer moveable property in the shape of book debts and promissory notes and the consideration for such transfer is partly in the shape of a cash payment and partly in the shape of covenants entered into by the transferee. We are therefore of the opinion that these two documents fall within Article 23 of Schedule I and are to be stamped as such. It is suggested on behalf of the plaintiff that these documents could be viewed as deeds of compositions within the meaning of Article 22 of Schedule I of the Act. Composition is an arrangement to which a debtor and his creditors are parties whereby the creditors agree to accept in full satisfaction of their debts something less than or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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