1949 (12) TMI 30 - HC - Companies Law

Court lacks jurisdiction over Bombay Evacuee Act disputes

Liquidator, Janda Rubber Works Ltd. Versus Collector of Bombay and Deputy Custodian of Evacuee Property, Bombay

The High Court held that it lacks jurisdiction to interfere with actions under the Bombay Evacuee (Administration of Property) Act, 1949, and subsequent ... Winding up – Delivery of property to liquidator Issues Involved:1. Jurisdiction of the High Court to interfere with actions taken under the Bombay Evacuee (Administration of Property) Act, 1949.2. Power of the Court under the Companies Act to adjudicate disputes regarding ownership of property claimed by the liquidator.Issue-wise Detailed Analysis:1. Jurisdiction of the High Court to Interfere with Actions Taken under the Bombay Evacuee (Administration of Property) Act, 1949:The learned Advocate-General argued that the High Court's jurisdiction is barred by the Bombay Evacuee (Administration of Property) Act, 1949, and the subsequent Central Government Ordinance (No. XXVII of 1949). Section 4 of the Bombay Act states that all evacuee property within the Province vests in the Custodian. Sections 6(1), 7, 20, and 24 further elaborate on the Custodian's powers, the process for claims, and the bar on civil court jurisdiction. The new Ordinance repealed the Bombay Act but maintained the bar on civil court jurisdiction (Sections 24, 25, and 43).The Court agreed with the Advocate-General, citing several precedents, including *Thin Yen v. Secretary of State*, *The Queen v. Essex County Court Judge*, *Sultan Ali v. Nur Hussain*, and *Raleigh Investment Co., Ltd. v. The Governor-General in Council*. These cases establish that when a statute provides a specific remedy, that remedy must be pursued exclusively. The Court concluded that the liquidator must seek remedy under the provisions of the Bombay Act and Ordinance, which provide a special machinery for adjudication of claims to evacuee property.2. Power of the Court under the Companies Act to Adjudicate Disputes Regarding Ownership of Property Claimed by the Liquidator:The Advocate-General contended that the Companies Act does not empower the Court to adjudicate disputes over property ownership between the liquidator and third parties. Section 216 of the Companies Act allows the liquidator to apply to the Court to determine questions arising in the winding up of the company but does not extend to disputes over property ownership. The Court referenced several cases, including *In re Vimbos Limited*, *In re United English and Scottish Assurance Company*, *In re East of England Bank*, *In re Ilkley Hotel Company*, and *John Bros. v. Official Liquidator, Agra Spinning and Weaving Mills Co., Ltd.*, which support the view that the Court's jurisdiction under the Companies Act is limited to administrative functions and does not extend to adjudicating property disputes with third parties.Mr. Chawla, representing the petitioner, argued that the Custodian's actions under the Bombay Act or Ordinance required the Court's leave under Section 171 of the Indian Companies Act. He cited *Governor-General in Council v. Shiromani Sugar Mills Ltd.*, where it was held that the Income-tax Officer must obtain the Court's leave before moving the Collector under Section 46(2) of the Indian Companies Act. However, the Court distinguished this case, stating that the Custodian's actions are executive acts, not legal proceedings, and thus do not require leave under Section 171.The Court concluded that the liquidator's application fails as the jurisdiction to adjudicate the dispute lies with the special machinery provided under the Bombay Act and the Ordinance. The application was dismissed with costs assessed at Rs. 150.Conclusion:The High Court ruled that it lacks jurisdiction to interfere with actions taken under the Bombay Evacuee (Administration of Property) Act, 1949, and the subsequent Ordinance. Additionally, the Court does not have the power under the Companies Act to adjudicate disputes regarding property ownership claimed by the liquidator. The liquidator must seek remedy through the special provisions provided by the Bombay Act and the Ordinance. The application was dismissed with costs.