TMI Blog1977 (2) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... case which has to be clarified so that an interference by this court under article 136 of the Constitution, in order to vindicate a correct principle and to meet the ends of justice, is called for. despite the fact that an order staying proceedings under section 442(b) of the Act may not, strictly speaking, be final, yet a question of general principle of wide application, as to the circumstances in which an apparently discretionary power may become annexed with a duty to exercise it in a particular way, having arisen here, we consider this to be a fit case for interference under article 136 of the Constitution. Appeal allowed. - 126 OF 1976 - - - Dated:- 10-2-1977 - M.H. BEG, AND P.S. KAILASAM, JJ. L.N. Sinha and Suresh Sethi for the Appellant. C.K. Garg, S.S. Khanduja and C.L. Sahu for the Respondent. JUDGMENT Beg, CJ. The official liquidator attached to the High Court of Rajasthan, in-charge of the liquidation of Golcha Properties (Pvt.) Ltd. (hereinafter referred to as "Golcha Company"), has come up in appeal to this court by special leave against a judgment and order of a Division Bench of that High Court, passed on a special appeal from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the court. It is, therefore, not surprising that the learned company judge of the Rajasthan High Court rejected the Dhan Company's application under section 442( b ) of the Act on 9th May, 1974. It is, however, somewhat surprising that a Division Bench of that High Court should have allowed an appeal from the judgment of the company judge and ordered stay of proceedings under section 446(2) of the Act against the respondent, Dhan Company, even though this was subjected to the condition that "the appellant-company produces the entire documentary evidence inclusive of account books, vouchers, files and other documents and papers in its possession or power relating to the claim in question, as it may desire to produce or the official liquidator desires to summon or as the learned company judge may direct in his discretion and also produces a list of witnesses that the appellant-company may desire to examine in its defence in respect of the claim in question along with an affidavit of what each witness is likely to depose". Thus, the Division Bench had, while making the stay order, attempted to safeguard the interests of the Golcha Company by making an order which, in the opinion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, apply to the court having jurisdiction to wind up the company, to restrain further proceedings in the suit or proceeding ; and the court to which application is so made may stay or restrain the proceedings accordingly on such terms as it thinks fit". The clear object of the section is that claims in suits and proceedings pending elsewhere which have a bearing on the company's liabilities, may be stayed only until the winding-up order is made, because after the winding-up order has been passed, section 446 begins to operate so as to automatically transfer with certain exceptions proceedings against the company being wound up to the court exercising the jurisdiction to wind it up. Section 446 reads : "446. (1) When a winding-up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose. (2) The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnifies a conferment of power. That power may, having regard to the context in which it occurs, and the requirements contemplated for its exercise, have annexed to it an obligation which compels its exercise in a certain way on facts and circumstances from which the obligation to exercise it in that way arises. In other words, it is the context which can attach the obligation to the power compelling its exercise in a certain way. The context, both legal and factual, may impart to the power that obligatoriness. Thus, the question to be determined in such cases always is whether the power conferred by the use of the word "may" has, annexed to it, an obligation that, on the fulfillment of certain legally prescribed conditions, to be shown by evidence, a particular kind of order must be made. If the statute leaves no room for discretion the power has to be exercised in the manner indicated by the other legal provisions which provide the legal context. Even then the facts must establish that the legal conditions are fulfilled. A power is exercised even when the court rejects an application to exercise it in the particular way in which the applicant desires it to be exercised. Where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damus lies to enforce it: that depends on the nature of the duty and the position of the donee". The principle laid down above has been followed consistently by this court whenever it has been contended that the word "may" carries with it the obligation to exercise a power in a particular manner or direction. In such a case, it is always the purpose of the power which has to be examined in order to determine the scope of the discretion conferred upon the donee of the power. If the conditions in which the power is to be exercised in particular cases are also specified by a statute then, on the fulfillment of those conditions, the power conferred becomes annexed with a duty to exercise it in that manner. This is the principle we deduce from the cases of this court cited before us: Bhaiya Punjalal Bhagwandin v. Dave Bhagwat-prasad Prabhuprasad [1963] 3 SCR 312 (SC), State of Uttar Pradesh v. Jogendra Singh [1964] 2 SCR 197 (SC), Sardar Govindrao v. State of M.P. [1965] 1 SCR 678 (SC), A.C. Aggarwal, Sub-Divisional Magistrate, Delhi v. Mst. Ram Kali [1968] 1 SCR 205 (SC), Bashira v. State of U.P. [1969] 1 SCR 32 (SC) and Prakash Chand Agarwal v. Hindustan Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general principle arises in this case which has to be clarified so that an interference by this court under article 136 of the Constitution, in order to vindicate a correct principle and to meet the ends of justice, is called for. Thirdly, learned counsel for the respondent submitted that the order under appeal before us is not final so that we need not interfere under article 136 of the Constitution for this reason. It is true that this court does not, as a rule, interfere with interlocutory orders. It is not necessary for us to embark on this occasion on a discussion of the meaning of a "final" order. That is certainly a question fraught with difficulties. It is sufficient for us to observe that our powers of interference under article 136 of the Constitution are not confined to those in respect of final orders, although finality of an order is a test which this court generally applies in considering whether it should interfere under article 136 of the Constitution with it. We think that we have indicated sufficiently why, despite the fact that an order staying proceedings under section 442( b ) of the Act may not, strictly speaking, be final, yet a question of general principl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
