Kerala High Court
K.Manoj@Kadakampalli Manoj vs K.Manoj@Kadakampalli Manoj on 30 January, 2020
Author: Sunil Thomas
Bench: Sunil Thomas
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SUNIL THOMAS
THURSDAY, THE 30TH DAY OF JANUARY 2020 / 10TH MAGHA, 1941
CRP.No.248 OF 2019
AGAINST THE ORDER/JUDGMENT IN CMA 7/2019 DATED 18-03-2019 OF
I ADDITIONAL DISTRICT COURT, KOLLAM
OS 77/2019 DATED 13-02-2019 OF PRINCIPAL MUNSIFF COURT , KOLLAM
REVISION PETITIONERS/RESPONDENTS & PLAINTIFFS:
1 K.MANOJ@KADAKAMPALLI MANOJ
AGED 45 YEARS
S/O. KUTTAPPAN, KADAKAMPALLIL VEEDU,
VADAKKEVILA P.O, KOLLAM-691 101,
SAKHA NO. 5240, MAMBER NO. 1520757
2 K.N. RAJAPPAN
AGED 84 YEARS
S/O. NARAYANAN, PRASANTHI,
THAMARAKKULAM, KOLLAM, PIN-691 010,
SAKHA NO. 3838, MAMBER NO. 79683.
BY ADV. SRI.K.JAGADEESCHANDRAN NAIR
RESPONDENTS/APPELLANTS/DEFENDANTS 1 AND 2 AND ADDL. RESPONDENTS 3
TO 5:
1 SREE NARAYANA DHARMA PARIPALANA YOGAM,
KOLLAM
REPRESENTED BY ITS GENERAL SECRETARY,
V.K. NATESAN, S.N.D.P. YOGAM OFFICE,
KOLLAM-691 001
2 V.K. NATESAN
AGED 82 YEARS, S/O. KESAVAN,
GENERAL SECRETARY, S.N.D.P YOGAM,
KOLLAM RESIDING AT VELLAPPALLY HOUSE,
KANICHUKULANGARA P.O,
CHERTHALA, ALLEPPEY DISTRICT-688544
3 SREE NARAYANA DHARAMA PARIPALANA YOGAM
ADOOR UNION ADMINISTRATIVE COMMITTEE,
REPRESENTED BY ITS CONVENER,
ADVOCATE K. MOHANAN.-685 590
C.R.P.248/19
2
4 SREE NARAYANA DHARMA PARIPALANA YOGAM,
PANDALAM
UNION COMMITTEE REPRESENTED BY ITS UNION SECRETARY
DR. A.V. ANANDA RAJ-689 501
5 SREE NARAYANA DHARMA PARIPALANA YOGAM, ADOOR
PATHANAMTHITTA UNION COMMITTEE REPRESENTED BY ITS
UNION SECRETARY,
ANILKUMAR-685 590
R1-2 BY ADV. SRI.A.N.RAJAN BABU
THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON
28-11-2019, THE COURT ON 30-01-2020 PASSED THE FOLLOWING:
C.R.P.248/19
3
'CR'
ORDER
The plaintiffs in O.S.No.77 of 2019 of Principal Munsiff Court, Kollam in a suit for permanent prohibitory injunction are the revision petitioners. Respondents are the defendants before the court below.
2. The plaintiffs are the members of first defendant, Sree Narayana Dharma Paripalana Yogam ('Yogam' in short), represented by its General Secretary, the second defendant. Other defendants are the representatives of the constituent unions of the yogam. The prayer sought in the suit was to permanently injunct the second defendant from convening, holding and conducting annual general meeting of the first defendant proposed to be held on 15.02.2019 or any other annual general meeting, for moving the amendments proposed in the notice produced along with the plaint. Along with the suit, an interim injunction in the above terms was sought, by filing I.A.No.562 of 2019. Defendants appeared and filed objections, inter alia, contending that, being a non trading company, in the light of the bar under the Companies Act, suit was not maintainable. Repelling the above objections, interim injunction as sought was granted by the learned Munsiff. This was challenged by the defendants 1 and 2 in C.M.A.No.7 of 2019. Learned first Additional District Judge, Kollam, by the impugned judgment allowed the appeal and C.R.P.248/19 4 held that the suit was not maintainable, in the light of the Companies Act 2013, which provided for an alternate forum of adjudication of the disputes. Consequently, the court below was directed to return the plaint. It was held that the suit was not maintainable in a civil court. This is under challenge at the instance of the plaintiffs.
3. Heard the learned counsel for the revision petitioners and learned counsel for the respondents.
4. The short question that arises in the present revision is whether the suit is maintainable. Two contentions were advanced by the defendants. Firstly, Rule 71 of the bye-law provides an arbitration clause which was not invoked by the plaintiffs. The second contention was that, under section 430 of the Companies Act 2013, no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal was empowered to determine by or under the Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act or any other law for the time being in force, by Tribunal or the Appellate Tribunal. Under section 241 of the Companies Act, any person was entitled to apply to the Tribunal if the affairs of the company was prejudicial to the public interest. C.R.P.248/19 5
5. Regarding the first contention, plaintiffs relied on the decision of this Court in Sathyan v. Yogam and others (2019(1) KLT 76) to contend that, there was no arbitration clause. The defendants countered this contention on the basis of the decision of this Court in Writ Petition No.20945 of 2004. Lower appellate court held in tune with the decision reported in Sathyan v. Yogam and others (supra), which appears to be the correct law.
6. The contention of the plaintiffs regarding the second limb of the objection was that, yogam was governed by the Kerala Non Trading Companies Act 1961 (Act 42/1961, hereinafter referred as Non Trading Act for short'), and consequently, Companies Act 2013 had no application. This contention was rejected by the lower appellate court in the light of section 3 of the Non Trading Act on a premise that the said Act had made the Companies Act mutatis mutandis applicable. Consequently, it was held that the suit was not maintainable.
7. Admittedly, yogam is a non trading company as defined under the Non Trading Act. Defendants have a contention that, yogam was originally registered under the Travancore Regulation No.1 of 1063 (adopting the Indian Companies Act 4/1882). After the commencement of the Companies Act, 1956, as an existing company, it was deemed to be registered under the Indian Companies Act, 1956. Even after commencement of Kerala Non Trading Companies Act, 1961, SNDP C.R.P.248/19 6 Yogam continued to be governed by the Companies Act, 1956 till the Central Government passed order dated 23.08.2005 under section 399(4) of the Companies Act, 1956 finding that the appropriate authority would be the State Government under the Kerala Non Trading Companies Act, 1961. Though this is not admitted by plaintiffs, there seems to be unanimity in the contention of both sides that yogam is governed by the Kerala Non Trading Companies Act 1961.
8. The Non Trading Act came into operation with effect from 01.03.1962. The entire dispute between the parties revolve around the interpretation of section 3 of the Non Trading Act. The above provision reads as follows:
Section 3 : Applications of the Companies Act 1956 (Central Act 1 of 1956) to non trading companies with objects confined to the State of Kerala The Companies Act 1956 (Cental Act 1 of 1956) in so far as it is the law relating to companies, other than trading corporation (including banking, insurance and financial corporations) with objects not confined to one State, shall mutatis mutandis and subject to the modifications specified in the Schedule to this Act, be applicable to the State of Kerala, and shall be the law relating to companies, other than trading corporation (including banking, insurance and financial corporation) with objects confined to the State of Kerala.
C.R.P.248/197
9. Section 3 provided that the Companies Act 1956 will apply subject to the modifications mentioned in the schedule. Essentially, the modifications relate to formal changes in nomenclature like; reference to the "Central Government" being construed as the "Government of Kerala", term "Parliament" to be construed as referring to "Kerala State Legislature" and reference to the "Comptroller and Auditor-General of India", to be construed as referring to the Accountant-General of India. Likewise, the Supreme Court, wherever it appeared was to be construed as the "High Court". Hence, the Companies Act, subject to such modifications referred to in the schedule, was expected to apply, mutatis mutandis.
10. The gravamen of the contention of the plaintiffs was that the Companies Act 1956, which was in existence as on 01.03.1962, the date on which the Non Trading Act came into force, was the Act that was referred to in section 3 of the Non Trading Act by incorporation and hence, any amendment made to the Companies Act thereafter would not be applicable to the Non Trading Act. Consequently, the amendments introduced by the Companies Act 2013 would not apply. Consequently, the suit filed by the members of the yogam before the Munsiff Court was not hit by Section 430 of the Companies Act 2013 and hence the suit was maintainable. On the other hand, the precise contention of the defendants was that, section 3 of the Non Trading Act was an instance of C.R.P.248/19 8 legislation by reference and hence, all subsequent amendments to the Companies Act would mutatis mutandis apply.
11. To evaluate the impact of the said Act and the relation vis-a-vis Indian Companies Act, statement of objects of the non Trading Act is essential to be referred to. The statement of objects of the statute reads as follows:
The Indian Companies Act, 1913, was extended to the Travancore-Cochin area of the State by the Part B States Laws Act 1951, and the Travancore Companies Act, 1114 and the Cochin Companies Act, 1120, were repealed.
Subsequently, the Indian Companies Act, 1913, was superseded by the Companies Act 1956 (Cental Act 1 of 1956) The Indian Companies Act, 1913, as also the Travancore and Cochin Companies Act provided for the incorporation, regulation and winding up of companies, including non-trading corporations with objects confined to the State.
The subject matter "incorporation" regulation and winding up of corporations whose objects confined to one State falls under entry 32 of List II of the Seventh Schedule to the Constitution of India and therefore the State Legislature has exclusive power to make laws with respect to that matter. Hence, the provisions of the Companies Act, 1956, passed by Parliament, cannot have any application to such non trading corporations in the State. As regards the C.R.P.248/19 9 incorporation, regulation and winding up of such corporations, the provisions of Travancore Companies Act 1114 and the Cochin Companies Act 1120, continue to be in force in the Travancore and Cochin areas respectively, since the repeal of these Acts by Parliament cannot have effect so far as those provisions are concerned. Similarly, the provisions of the Indian Companies Act, 1913 relating to non trading corporations with objects confined to one State, continue on force in the Malabar area, notwithstanding the repeal of that Act by the Companies Act 1956.
The Non Trading Act got assent of Governor on 22.12.1961. It was published in the Government Gazette on 26.12.1961, notified on 20.02.1962 by G.O.No.3310/A4/62/1D and came into effect on 01.03.1962.
Consequently, the Act came into force with effect from that date.
12. By Section 8 of the Non Trading Act, the Travancore Companies Act 1114, Cochin Companies Act, 1120 and the Indian Companies Act 1913 which were in force in the Malabar District referred to in section 5(2) of the State Reorganization Act 1956 in so far as it related to companies other than Trading Corporation with objects confined to one State, stood repealed.
13. In the light of the above rival contentions, the question now boils down to whether section 3 is an instance of legislation by incorporation as claimed by the plaintiffs or was a legislation by reference as contended by the defendants. The defendants contended that, C.R.P.248/19 10 Companies Act was not incorporated into the Non Trading Act and it was an instance of adaptation by reference to Companies Act 1956, without incorporation.
14. This issue came up before the judicial committee of privy council in one of its earliest decision in Secretary of State for Indian in Council v. Hindusthan Co-operative Insurance Society Ltd. (AIR 1931 PC 149). That was a case wherein Land Acquisition proceedings were initiated for the purpose of the Calcutta Improvement Act. It referred to certain provisions of the general statute, Land Acquisition Act 1894. The contention in that case was that the provisions of Land Acquisition Act 1894 having been incorporated into the Calcutta Improvement Trust Act, 1911, it became an integral part of it and hence, subsequent amendment of the Land Acquisition Act 1894, by the addition of subsection 26(2), had no effect on Calcutta Improvement Trust Act and could not be read into it. Privy council held that, it was accepted that, where a statute was incorporated by reference into a second statute, the repeal of the first statute do not affect the second. It proceeded to hold that, independent existence of the two Acts was, therefore, recognized; despite the death of the parent Act, its offspring survives in the incorporating Act. It was further held that, it seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which was not expressly made applicable C.R.P.248/19 11 to the subsequent Act, can be deemed to be incorporated in it, at all events, if it is possible for the subsequent Act to function effectually without the addition.
15. The Constitution Bench of the Supreme Court in Ram Sarup v. Munshi and Ors. (AIR 1963 SC 553) had occasion to consider the above aspect in detail. Section 15 of Punjab pre-emption Act 1913, defined "agricultural land" to mean land as defined in Punjab Alienation of Land Act, 1900. By Adaptation of Laws (3 rd amendment) Order 1951, Punjab Alienation of Land Act 1900 was repealed. Answering the question whether the repeal of the Punjab Alienation of Land Act, 1900 will affect the continued operation of the Pre-emption Act, it was held that the expression agricultural land in the later Act has to be read as if the definition in the Alienation of Land Act has been bodily transposed into it and hence, repeal of 1900 Act will have no impact. It was held to be a case of legislation by incorporation.
16. The distinction between the above two legislative tools came up before the Supreme Court in Mahindra & Mahindra Ltd. v. Union of India & Anr. (1979 KHC 562). Supreme Court was called upon to consider the scope of an appeal provided under section 55 of the Monopolies and Restrictive Trade Practices Act, 1969. It provided that, any aggrieved person may prefer an appeal on one or more of the grounds specified in section 100 of the Code of Civil Procedure 1908. As on the date C.R.P.248/19 12 of the enactment of MRTP Act, section 100 of the CPC specified three grounds on which a second appeal could be brought to the High Court. Later, CPC was amended and substituted by section 37 of the CPC Amendment Act 1976, with effect from 01.02.1977, by which the amended section 100 provided that the second appeal shall lie to the High Court only if the High Court was satisfied that the case involved a substantial question of law. The question that was set up before the Supreme Court in the above case was whether the appeal could be entertained under MRTP Act only if there was any substantial question of law. Naturally, the true purport of section 55 MRTP Act with reference to section 100 of the Code of Civil Procedure, as to whether it was an instance of legislation by incorporation or one by reference came up for consideration. Section 8(1) of the General Clauses Act was pressed into service. It provided that, where the Act or any Central Act or Regulation made after the commencement of the Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then reference in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted. It was contended by the respondent that the substitution of new section 100 in the Code amounted to repeal and re-enactment of the former section 100 and, therefore on an application of the rule of interpretation enacted in section 8(1) of the General Clause Act, reference in section 55 MRTP Act to section C.R.P.248/19 13 100 CPC must be construed as a reference to new section 100 CPC and the appeal could be maintained only on the ground specified in the new section 100CPC; that was, on a substantial question of law.
17. Rejecting the above contention, Supreme Court held that the contention ignored the distinction between a mere reference to or citation of one statute in another and an incorporation which in effect means, bodily lifting a provision of one enactment and marking it in a part of another. Elucidating the clear and wide distinction between amendment by incorporation and amendment by reference, Supreme Court proceeded to explain that, where there was a mere reference to or citation of one enactment in another by incorporation, section 8(1) applies and the repeal and re-enactment of the provision referred to or cited has the effect set out in that section and the reference to the provision repealed was required to be construed as reference to the provision as re-enacted. However, it was further held that, where a provision of one statute was incorporated in another, the repeal or amendment of the former does not affect the latter. The effect of incorporation was as if the provision incorporated was written out in the incorporating statute and was a part of it. Legislation by incorporation was a common legislative device employed by the legislature, where the legislature for convenience of drafting incorporates provisions from an existing statute by reference to that statute instead of setting out for itself at length the provisions which it desires to adopt. Once the C.R.P.248/19 14 incorporation was made, the provision incorporated becomes an integral part of the statute to which it was transposed and thereafter there was no need to refer to the statute from which the incorporation was made and any subsequent amendment made in it has no effect on the incorporating statute.
18. The Supreme Court profitably referred to the comment of Lord Esher, M.R. in re.Wood's Estate (1886) 31 Ch D 607, wherein, it was held as follows:
"If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all"
19. Ultimately, Supreme Court held that, section 55 was an instance of legislation by incorporation and not a legislation by reference. It was held that the grounds specified in section 100 CPC might be changed from time to time having regard to the legislative policy relating to second appeal and the Court could not see any valid reason why the Legislature should have thought it necessary that these changes should also be reflected in section 55 which dealt with the right of appeal in a totally different context. Hence, it was concluded by the Supreme Court that the C.R.P.248/19 15 grounds specified in the then existing section 100 CPC were incorporated in section 55 MRTP Act and the substitution of the new section 100CPC did not affect or restrict the grounds as originally incorporated.
20. In Bolani Ores Ltd. v. State of Orissa (AIR 1975 SC 17) identical issue came up before the Honourable Supreme Court. The question involved in that case was regarding the interpretation of the term Motor vehicle as defined under the Motor Vehicles Taxation Act of few states. It was defined with reference to the Motor Vehicles Act. Subsequently, section 2(18) of the Motor vehicles Act was amended by Act 100 of 1956, but no corresponding amendment was made in the definition contained in the taxation Act. The argument advanced was that the definition in the Taxation Act was not a definition by incorporation but only a definition by reference and the meaning of "motor vehicle" must, therefore, be taken to be the same as defined from time to time in section 2(18) of the Motor Vehicles Act, 1939. Refuting the above argument, it was held that, it was a case of incorporation and not reference and the definition in section 2(18)of the Motor Vehicles Act, 1939 as then existing, was incorporated in section 2(c) of the Taxation Act and neither repeal of the Motor Vehicles Act nor any amendment in it would affect the definition of motor vehicle in section 2(c) of the Taxation Act. The Supreme Court held that when two acts were complementary or interconnected, legislation by reference may be an easier method because a definition given in one Act C.R.P.248/19 16 may be made to do as the definition in another Act, both of which being enacted by the same legislature. To arrive at the above conclusion, the Supreme Court, referred to the decision in re.Wood's Estate (supra).
21. The same legal issue came up for consideration before the three Judges Bench of the Supreme Court again in Bharat Coop. Bank (Mumbai) Ltd. v. Coop. Bank Employees Union ((2007)4 SCC 685 ). In that decision, the question as to which was the appropriate Government in relation to a multi-state cooperative bank carrying on business in more than one State came up for consideration. Section 2(bb) of the Industrial Disputes Act defined "banking company" as to mean "banking company as defined in section 5 of the Banking Companies Act 1949 (10 of 1949) having branches or other establishments in more than one state, and includes the Export Import Bank of India, the Industrial Reconstruction Bank of India, the Industrial Development Bank of India, the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989, the Reserve Bank of India, the State Bank of India (a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970) (a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) and any subsidiary bank, as defined in the State Bank of India (subsidiary Banks) Act, 1959". Subsequently, the C.R.P.248/19 17 Banking Companies Act was renamed as the Banking Regulation Act. The question raised for consideration before the Supreme Court was whether amendments carried to the Banking Regulation Act, particularly insertion of section 56 in the new format, after the insertion of the definition of "banking company" in the Industrial Dispute Act would apply mutatis mutandis in the matters governed by the Industrial Disputes Act. Supreme Court held that, in the Industrial Disputes Act, there was no indication to the applicability or otherwise of the subsequent amendments in the Banking Regulation Act and hence the question posed before the Court had to be answered in the light of two concepts of statutory interpretation; namely, incorporation by reference and mere reference or citation of one statute into another.
22. Supreme Court noticed the distinction between the two concepts of statutory interpretation viz, a mere reference or citation of one statute in another and incorporation by reference. It was observed that legislation by incorporation was a common legislative device where the legislature, for the sake of convenience of drafting incorporate provisions from an existing statute by reference to that statute instead of verbatim reproduction of the provisions, which it desired to adopt in another statute. Once incorporation was made, the provision incorporated became an integral part of the statute to which it was transposed and thereafter there was no need to refer to the statue from which the incorporation was made C.R.P.248/19 18 and any subsequent amendment made in it has no effect on the incorporating statute. On the contrary, in the case of a mere reference or citation, a modification, repeal or re-enactment of the statute, that was referred will also have effect on the statute in which it was referred.
23. Supreme Court referred to the law laid down in Ram Sarup's case and Bolani Ores Ltd.'s case (supra). Supreme Court held that when there is a mere reference to a provision of one statute in another without incorporation, then, unless a different intention clearly appears, the reference would be construed as a reference to the provision as may be in force from time to time in the former statute. But, if a provision of one statute is incorporated in another, any subsequent amendment in the former statute or even its total repeal would not affect the provision as incorporated in the latter statute.
24. However the Supreme Court noted that the precise distinction between incorporation by reference and adoption of provisions by mere reference or citation was not too easy to be highlighted. It was held that the distinction was one of difference in degree and was often blurred. The fact that no clear cut guidelines or distinguishing features have been spelt out to ascertain whether it belongs to one or the other category makes the task of identification difficult. The semantics associated with interpretation play their role to a limited extent, it was observed. The Court held that ultimately, it was a matter of probe into legislative intention and/or taking C.R.P.248/19 19 an insight into the working of the enactment, if one or the other view was adopted. Therefore, the kind of language used in the provision, the scheme and purpose of the Act assume significance in finding answer to the question.
25. Applying the above principle, Supreme Court held that from the plain language in which section 2(bb) of the Industrial Disputes Act was made, the intention of the legislature was very clear and held that, reference of section 5 of the Banking Companies Act 1949 was an instance of legislation by incorporation and not legislation by reference. It was held that, by the introduction of the above provision, it has become an integral part and therefore, subsequent amendments in the Banking Regulation Act would not have any effect on the expression "Banking Company" as defined in the said Section.
26. In the light of the above legal exposition of law as clarified by the Honourable Supreme Court through its decisions, including the Constitution Bench decision, the effect of the amendments to Companies Act 1956 on the Kerala Non Trading Companies Act, 1961 and the question whether, reference to the Companies Act 1956 in section 3 of the Non Trading Act was one of legislation by incorporation or legislation by reference has to be answered.
27. Section 3, as mentioned earlier, provides that the Companies Act 1956 in so far as it was the law relating to companies, other than C.R.P.248/19 20 trading corporations with objects not confined to one State, shall, mutatis mutandis and subject to the modifications specified in the Schedule to this Act, be applicable to the State of Kerala and shall be the law relating to companies, other than trading corporations with objects confined to the State of Kerala. The Schedule suggests modification to terms like "Central Government", "Government", "Parliament", Comptroller and Auditor- General", "Supreme Court", with corresponding words which are required to make a Central Statute applicable to a State. The effect of section 3 is that, the provisions of the Companies Act 1956, with certain limited modifications to the words mentioned in the Schedule of the Act, are made completely applicable to the Non Trading Act. It is pertinent to note that, no specific provision of the Companies Act, is sought to be incorporated in the Non Trading Act. In fact entire provision of the Companies Act 1956 to the extent applicable are made applicable by a single reference. None of the provision of the Companies Act is lifted and incorporated in the Non- trading Act. There is nothing in the Non-trading Act to indicate that, any single provision in the Companies Act was introduced in the incorporating Statute and made part of it. Further, there is nothing in the Act to show that it was an instance of legislation by incorporation. For the purpose of deciding the various aspects of law applicable to Non Trading Companies, other than trading corporations with objects not confined to more than one State, one has to search the various provisions of the Companies Act. The C.R.P.248/19 21 opening words of the Non-trading Act indicate that the Act was intended to provide for the incorporation, regulation and winding up of the companies other than the trading corporation with objects confined to the State of Kerala. However, in the Non Trading Companies Act, there is absolutely no provision relating to the incorporation or winding up of the companies other than the non trading corporation. For the detailed provisions, one has to search for the Companies Act. Even the charging section, which is section 3 of the Non Trading Act, does not lay down any specific provision, except referring to the Statute that would apply. Reference to various provisions of the Non Trading Act also gives an indication which supports the above conclusion. Section 4 provides that, every existing company with its registered office in any place in the State of Kerala shall be deemed to be registered under the Companies Act, 1956 as applied to the State of Kerala by section 3, and shall be governed by the said Act accordingly.
28. Perusal of the Non Trading Act shows that, regarding incorporation, regulation and winding up of companies, specific provisions are not available in the Non Trading Act. One has to refer to the Companies Act for that purpose. In other words, it cannot be said that, any specific provision of the Companies Act has been bodily lifted and incorporated in the Non Trading Companies Act or that, after incorporation, the former Act has lost its applicability in so far it relates to the provisions covered by the Non Trading Act. Unlike the provisions of legislation by C.R.P.248/19 22 incorporation, one has to refer to the Companies Act. Necessarily, Companies Act has not been incorporated into the Non Trading Act by legislation and can only be stated to be an instance of legislation by reference. This leads to the conclusion that, any amendment made to the Companies Act thereafter will be extended to Non Trading Companies Act and will operate and apply to such companies.
29. The above discussion hence leads to the conclusion that the suit is not maintainable in relation to matters that are governed by the Companies Act. Consequently, it has to be held that the suit as framed was not sustainable and to that extent, contention of the defendants has to be upheld. The conclusion of the lower appellate court has to be sustained.
In the result, revision fails and is dismissed confirming the conclusion arrived at by the court below that the suit as framed is not maintainable. Trial court shall return the plaint to the plaintiffs for presenting before proper authority.
Sd/-
SUNIL THOMAS
Sbna JUDGE