Delhi High Court
Hansipra Gmbh vs Dresdner Bank, Frankfurt And Ors. on 1 December, 1991
Equivalent citations: 1992(22)DRJ260
JUDGMENT Sat Pal, J.
(1) This appeal is directed against the order dated 28th February, 1989 passed by a learned Single Judge of this Court in I As No-4666/85 and 8806/87 in Suit No-488/85. By this order the learned Single Judge has stayed further proceedings in the suit with liberty to have the proceedings revived in accordance with law on revival or re-registration of the plaintiff company.
(2) The facts of the case briefly stated are that M/s. Hansipra Gmbh (hereinafter referred to as 'Hansipra') the plaintiff in the suit was company with limited liability registered at Frankfurt, West Germany. Hansipra filed a suit under the provision of Order Xxxiii of the Code of Civil Procedure in the Court of Civil Judge, Unnao for recovery of real pearls and precious stones mentioned in the plaint or recovery of Rs.2,07,00,000.00 in case the recovery of said pearls and precious stones cannot be obtained and further for the recovery of Rs.93,00,000.00 towards compensation for wrongful detention of the goods. The suit had been transferred to this Court. In the plaint it has been alleged that Dr. B.B. Mehrotra is the managing director of Hansipra and he is authorised to sign and verify the plaint. Ia 4666/85 filed under section 151 of the Code of Civil Procedure by the respondent praying therein that the suit may be dismissed as not maintainable or proceedings in the suit may be ordered to be stayed. In this application it was pleaded that Hansipra was deleted ex-office from the Commercial Register on 5th April, 1982 according to the "Loschungsgesets" (Deletion Law) of October 9, 1934 because of lack of funds and assets. It was further pleaded that the said company was re-registered on or about 4th August, 1982 for the limited purpose of liquidation an Dr. B.B. Mehrotra was appointed as a liquidator. The company was once again deleted from the Commercial Register on or about 15th February, 1985. It was argued on behalf of the respondent before the learned Single Judge that the effect of deletion of the name of Hansipra from the Commercial Register on or about 15th February, 1985 was that the suit could not be continued by or on behalf of the said company by Dr. B.B. Mehrotra. It was further contended that in law Hansipra ceased to have any existence after the aforesaid deletion from the Commercial Register on 15th February, 1985 and as such the suit was liable to be dismissed or in any event further proceedings in the suit were liable to be stayed.
(3) The appellant admitted before the learned Single Judge that Hansipra was dissolved in April 1982 and it was revived in August 1982. He, however, denied that the company had been ultimately dissolved in 1982. In the affidavit dated 5th September, 1987 filed by Dr. B.B. Mehrotra it was contended that the interest of the plaintiff company was assigned to him vide letter of assignment dated 30th June, 1984 under the provisions of Article 72 of Gmbh Laws. The learned Single Judge held that on deregistration, deletion of Hansipra had taken place on 15th February, 1985. He held that Dr. B.B. Mehrotra, who claims himself to be the liquidator of Hansipra, a company which was dissolved and cesed existence, could not represent a non-existing company. Dealing with the letter of assignment dated 30th June, 1984 the learned Single Judge held that he could not act upon the said document since this document was placed on record nearly three years after its execution and further the right to continue the suit under the name of non-existing company could not have been assigned. The learned Single Judge, therefore, allowed the application being La 4666/85 and stayed further proceedings in the suit with liberty to have the proceedings revived in accordance with law on revival or re-registration of Hansipra. The aforesaid order of the learned Single Judge has been challenged in this appeal. Mr. Tikku, the learned counsel for the appellant submitted that at the relevant time when the suit was filed, the name of Hansipra existed on the Commercial Register and after filing of the suit even if the name was deleted, the suit could be continued by or on behalf of the said company. In this connection he relied on Article 69 and 70 of Gmbh Laws. The arguments on behalf of the appellant were followed by,Dr. B.B. Mehrotra, who claims himself to be the liquidator of the company. Dr. Mehrotra submitted that when the letter of assignment dated 30th June, 1984 was issued in his name of the plaintiff company was registered under the provisions of Gmbh Laws. He, therefore, contended that in terms of the aforesaid letter of assignment he could continue the suit on behalf of the plaintiff company even if its name was deleted from the Commercial Register. Mr. Setalvad, learned Senior counsel for the respondent reiterated the arguments advanced on behalf of the respondent before the learned Single Judge. He further submitted that as per note at page 2 of exhibit 'C' (which is at pages 177-178 of the paper book), the plaintiff company was officially dissolved according to section 2 of the Law regarding dissolution and deletion of the companies and co-operative 263 societies of 9-10-1934 (Federal Law Gazette I Page 914), on 15th February, 1985 and in terms of clause (3) of section 2, the liquidator in such a case can be nominated by the court on the application of a partner. Since in the present case Dr. Mehrotra has not been appointed as liquidator by any court under the Gmbh Laws, he cannot act as liquidator of the plaintiff company and as such the suit could not be continued by Dr. Mehrotra. In order to appreciate the point at issue it will be relevant to reproduce articles 69 and 70 of Gmbh Laws which read as under:- "69(1):- Notwithstanding the dissolution of the company, the provision of the Second and Third Title as to the legal relation of the Company and of the share holders apply until the termination of the liquidation unless something different follows from the provisions of the present Title and from the nature of the liguidation. 69(2):- The Court having jurisdiction over the company at the date of its dissolution remains competent until the assets have been finally distributed. 70:- The liquidators shall terminate the current business and discharge the obligations of the dissolved company, collect its accounts receivable and convert the assets of the company into cash; they shall represent the company in and out of court. In order to terminate current transactions the liquidators may also enter into new transactions."
(4) It is admitted case of the parties that the plaintiff company was re-registered on 4th August, 1982 and Dr. Mehrotra was appointed as liguidator. Further as contended on behalf of the appellant, the interest of the plaintiff company was assigned to Dr. Mehrotra vide letter of assignment dated 30th June, 1984. Before the impugned order was paused by the learned Single Judge, the aforesaid letter of assignment had been placed on record. It is also the case of the appellant that the assets of title plaintiff company have not been finally distributed. In terms of sub- clause (2) of Article 69 of Gmbh Laws, a Court having jurisdiction over the company on the date of its dissolution remains competent until the assets have been finally distributed. Since the assets of the plaintiff company have not been finaly distributed, the suit filed on behalf of the appellant company could be continued particularly when the interest of the plaintiff company had already been assigned to Dr. Mehrotra on 30th June, 1984 when the name of the plaintiff company had not been deleted from the Commercial Register. It is only on a subsequent date i.e. 15th February, 1985 when the name of the plaintiff company is alleged to have been deleted from the Commercial Register.
(5) The learned Single Judge has held that the letter of assignment dated 30th June, 1984 cannot be acted upon inasmuch as the same was placed on record nearly three years after its execution and further the rights to continue the suit in the name of the non- existing company could not be assigned. We are unable to agree with the reasoning of the learned Single Judge failed to take into consideration a material fact that the date. on which the letter of assignment was stated to be executed, the name of the plaintiff company very much existed on the Commercial Register and on that date it was not a non-existing company. Further, in our view the learned Single Judge was not right in rejecting the said letter of assignment at this stage simply on the ground that it was placed on record nearly three years after its execution. The genuinesness of the said letter of assignment could have been gone into only after affording opportunity to the plaintiff to prove this document.
(6) The contention of the learned counsel for the respondent that Dr. Mehrotra cannot act as a liquidator of the plaintiff company as he has not been appointed so by any court under the Gmbh Laws after the deletion of the name of the company on 15th February, 1985 has no force in view of the fact that the interest of the plaintiff company was assigned to Dr. Mehrotra on 30th June, 1984 when the name of the plaintiff company existed in the Commercial Register. The learned Single Judge relying on two judgment of the Supreme Court reported as Miss Violet Wapshare and others vs. Peirce & Leslie & Co. Ltd., and others, 1969 (39) Company Cases 808 and Narendra Bahadur Tandon vs. Shankar Lal, 1982 (52) Company Cases 62 held that the dissolution puts an end to the existence of the company and that the share holders of the dissolved company cannot maintain any action for recovery of its assets. But the facts of the cases relied on by the learned Single Judge are different from the facts of the present case inasmuch as in those cases the companies were governed by the Indian Laws whereas in the present case the plaintiff company is governed by Gmbh Laws. For this proposition, our view is supported by the judgment reported as Russian and English Bank vs. Boring Brothers and Company Limited, 1932 (1) Chancery Division 435 which has also been relied upon by the learned Single Judge. In this case it has been clearly laid down that in the case of artificial persons, the existence of such a person depends on the law of the country under whose law it is incorporated, recognised in other countries by international comity, though its incorporation is not in accordance with their law. In terms of Gmbh Laws as stated above, a Court having jurisdiction over the company on the date of its dissolution remains competent until the assets have been finally distributed.
(7) In view of the above discussion the appeal is allowed and the order passed by the learned Single Judge is set aside. The learned Single Judge is directed to proceed with the suit on merits. However, we make no order as to osts.