1965 (2) TMI 66 - HC - Companies Law

Court grants leave to file suit in Bombay upon deposit, emphasizing Companies Act and Bombay Act objectives. Costs determined accordingly.

Osler Electric Lamp Manufacturing Co. Ltd., In re

Osler Electric Lamp Manufacturing Co. Ltd., In re - [1967] 37 COMP. CAS. 306 (CAL.) Issues involved:1. Determination of tenancy status of M/s. Osier Electric Lamp Manufacturing Co. Ltd.2. Jurisdiction to try the suit for ejectment and other reliefs.3. Validity of the application for leave to sue the official liquidator.4. Conditions for granting leave to file the suit in Bombay.Detailed Analysis:1. Determination of tenancy status of M/s. Osier Electric Lamp Manufacturing Co. Ltd.:The applicants claimed that M/s. Osier Electric Lamp Manufacturing Co. Ltd. became a monthly tenant after the expiry of the initial lease term on October 30, 1955. The official liquidator, however, contested the tenancy status, stating that he was not aware of the tenancy and was not in occupation of the premises. The court noted the vagueness in the applicants' affidavit regarding how the company became a monthly tenant and who was in actual possession of the flat. Despite these criticisms, the court found that the allegations did disclose a cause of action, although the averments were not explicit and clear.2. Jurisdiction to try the suit for ejectment and other reliefs:The official liquidator argued that the High Court of Calcutta had exclusive jurisdiction under section 446 of the Companies Act, 1956. Conversely, the applicants contended that the City Civil Court of Bombay had exclusive jurisdiction under section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The court examined both statutes and concluded that the Bombay Act provided exclusive jurisdiction to the Court of Small Causes, Bombay. However, section 446 of the Companies Act, 1956, as amended in 1960, conferred concurrent jurisdiction to the winding-up court without expressly taking away the jurisdiction of other competent courts. Consequently, the court determined that both the winding-up court and the Court of Small Causes, Bombay, had concurrent jurisdiction.3. Validity of the application for leave to sue the official liquidator:The official liquidator's counsel argued against granting leave due to the absence of a copy of the plaint and the vagueness of the affidavit. The court acknowledged that while it would have been preferable to annex the plaint, there was no statutory requirement to do so under the Companies Act or the Rules. Therefore, the absence of the plaint was not sufficient ground to dismiss the application. The court found merit in the criticisms regarding the vagueness of the affidavit but ultimately held that the application disclosed a cause of action.4. Conditions for granting leave to file the suit in Bombay:The court considered the practical implications of directing the applicants to file the suit in Calcutta, noting the additional expenses and inconvenience. The court decided to grant leave to file the suit in Bombay, subject to specific conditions to balance the interests of both parties. The applicants were required to deposit Rs. 300 with the official liquidator within four weeks. This amount would be used to cover the official liquidator's travel and residence expenses if the suit failed and the awarded costs were insufficient. If the official liquidator failed, the amount would be returned to the applicants.Conclusion:Leave to file the suit in Bombay was granted, subject to the applicants depositing Rs. 300 with the official liquidator. The court emphasized the need to consider the objectives of both the Companies Act and the Bombay Act in granting leave. Costs of the application were to be costs in the proposed suit, and if the suit was not filed, the official liquidator would be entitled to the costs of the application.