Foreign creditors in winding up of an unregistered foreign company may prove debts unless statute expressly excludes them.

Foreign creditors of a company incorporated outside India and wound up in India as an unregistered company were entitled to prove their debts because the Companies Act, 1913 drew no distinction between Indian and foreign creditors for winding-up purposes. The statutory scheme treated the Indian liquidation as ancillary to the winding up of the company itself, and required pari passu satisfaction of liabilities and admission of claims against the company. On that basis, debts owed outside India or connected with the foreign business did not exclude proof, and the objection to the foreign creditors' claims was rejected.

---

---

Issues: Whether foreign creditors of a company incorporated outside India and wound up in India as an unregistered company are entitled to prove their claims in the winding-up proceedings.

Analysis: The statutory scheme under the Indian Companies Act, 1913, contained no distinction between Indian and foreign creditors for the purpose of winding up. The provisions dealing with unregistered companies, contributories, applications for winding up, the operation of winding-up orders, distribution of property, and proof of debts all indicated that the winding up was of the foreign-incorporated company itself, not of a separate Indian entity. Since the liquidation in India was ancillary to the overall winding up of the company and the Act required pari passu satisfaction of liabilities and admission of all claims against the company, foreign creditors were not excluded merely because their debts were owed outside India or were connected with the foreign business of the company.

Conclusion: Foreign creditors were entitled to prove their claims in the winding-up proceedings, and the objection to their proofs was rightly rejected.

Ratio Decidendi: In the winding up in India of a company incorporated outside India as an unregistered company, all creditors stand on the same footing for proof of debts unless the statute expressly creates a distinction.

---