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1960 (8) TMI 43 - HC - Companies LawWinding up Power of court to assess damages against delinquent directors, etc. and Enforcement of orders of courts
Issues Involved:
1. Maintainability of Special Appeal No. 5 of 1960. 2. Application of Section 45N of the Banking Companies Act. 3. Characterization of proceedings under Section 235 of the Companies Act. 4. Payment of court fees. Detailed Analysis: 1. Maintainability of Special Appeal No. 5 of 1960: The primary issue was whether Special Appeal No. 5 of 1960 is maintainable. The respondent's counsel argued that under Section 45N of the Banking Companies Act, an appeal is only permissible when the amount or value of the subject-matter exceeds Rs. 5,000. Since the amount involved was below Rs. 5,000, the appeal would not lie. The appellant's counsel contended that the appeal is maintainable under Section 202 of the Companies Act and Section 18 of the Rajasthan High Court Ordinance, asserting that the inhibition of Section 45N of the Banking Act cannot defeat the right of appeal. However, the court held that the provisions of the Banking Act override those of the Companies Act, making the appeal not maintainable. 2. Application of Section 45N of the Banking Companies Act: The appellant argued that his right of appeal vested when the winding-up proceedings started in April 1952, and since Part IIIA of the Banking Act came into operation in 1953, it should not affect him. The court dismissed this contention, stating that the applications under Section 235 of the Companies Act were filed in 1957, long after the operation of Part IIIA of the Banking Act. The court emphasized that the material point of time is when the application under Section 235 was actually filed, and since Part IIIA was in force at that time, its provisions govern the case. 3. Characterization of Proceedings under Section 235 of the Companies Act: The appellant contended that proceedings under Section 235 of the Companies Act, read with Section 45H of the Banking Act, are not civil proceedings, and thus Section 45N should not apply. The court rejected this argument, stating that the proceedings are in the nature of civil proceedings. The court referred to various cases and concluded that the proceedings under Section 235 are civil, distinguishing them from criminal proceedings, and thus Section 45N of the Banking Act applies. 4. Payment of Court Fees: The respondent contended that ad valorem court fees should be paid on the value of the subject matter in the appeal, arguing that the order is enforceable as a decree. The appellant argued that the order, while enforceable as a decree, is not a decree itself and thus should not require ad valorem court fees. The court agreed with the appellant, stating that there is a distinction between an order having the force of a decree and an order enforceable as a decree. The court held that the court fees paid by the appellant, as in the case of any appeal from an order, are sufficient. The court emphasized that a fiscal statute should be strictly construed, and in case of doubt, the benefit should go to the person sought to be made liable. Conclusion: The court concluded that Special Appeal No. 5 of 1960 is not maintainable due to the application of Section 45N of the Banking Companies Act. The proceedings under Section 235 of the Companies Act are characterized as civil proceedings, and the court fees paid by the appellant were deemed sufficient.
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