P L D 1956 Lahore 731 (PLP)

KAIKAUS, J.-This is a petition for winding-up of a private limited company, a family concern, the shareholders of which are all descendants and heirs of one Kishori Lal. This Kishori Lal was running a business of manufacture and sale of liquor in the name of Kishori Lal & Sons at Karnal and was also the owner of what was then called the Karnal Distillery. He died in 1906 leaving behind him three sons, Durga Parshad, Ladli Parshad and Shanti Parshad. After his death, Durga Parshad, as senior member of the joint family, took over the management of the business which had now become a joint family business. He too died in 1934 leaving behind him two minor sons, Madan Lal and Sajan Lai, and a widow Suraj Mukhi. Ladli Parshad being now the eldest male member of the family took over as karta. The family continued as a joint family till November 1940 when a severance was effected. The property of the joint family was partitioned and the joint family business was converted into a contractual partnership. Only a few months later i.e., on the 23rd of March 1941, this partnership was converted into a limited company-the Karnal Distillery Company Limited-for the winding of which this petition has been filed. The shareholders in this company were the three branches, who were allotted equal shares with this exception that Durga Parshad's branch was granted one share more than others, the shares of the other two branches being 1,003 each and those of Durga Parshad's branch 1,

004. All these shares had been allotted in lieu of the assets of the shareholders in the partnership business Kishori Lai & Sons, and the Karnal Distillery. In the Articles of Association of this company it was provided that there would be three directors of the company, Ladli Parshad, Shanti Parshad and Shrimati Suraj Mukhi, each of whom was to get Rs. 250 per mensem. Ladli Parshad was to be the managing director of the company for ten years with an option to him to renew the contract for a further, period of ten years. He was to get Rs. 1,850 per mensem as salary and Rs. 350 as car allowance. This was in addition to Rs. 250 per mensem which he was to receive along with the other directors. He was, at the same time, entitled to 7 percent of the profits earned by the com pany. Article 47 of the Articles of Association provided that shareholders to the extent of 2/3rd of the total shares could compel the owners of the remaining 1/3rd shares to transfer their shares to them. Probably in order to avoid the applica tion of this Article, on the 1st of August 1941, Ladli Parshad got allotted to himself 500 shares more. Differences arose between the parties as early as July 1941 although active and open hostility commenced much later. It seems that the business was making good profits and Shanti Parshad and Suraj Mukhi felt that Ladli Parshad was getting the lion's share of the income. He was getting Rs. 2,450 per mensem and was, at the same time, entitled to 7 percent of the profits. In addition to this, according to Shanti Parshad, he was abusing his position as managing director by making purchases of methylated spirit from the company at rates much lower than the market rates, he was getting the benefit of contracts secured in the name of the company and he was also not allowing the other directors any say in the management of the business. It may be explained here that Ladli Parshad was carrying on the business of supply of liquor to the Government of India in his personal capacity too. He had also become a shareholder in a liquor manufacturing company called the Jagjit Distillery and Allied Industries Limited which had been started at Hamira in the Kapurthala State in 1944. The two branches of Shanti Parshad and Durga Parshad made up their minds to end the management of Ladli Parshad. On the 20th of February 1945 they held a general meeting in which they removed Ladli Parshad from the office of the managing director and appointed Shanti Parshad as manag ing director in his place. Ladli Parshad took up the position that this meeting had never been convened and that in any case he never had any notice of it and, therefore, was not bound by it. There was a tussle between Shanti Parshad and Ladli Parshad in respect of the possession of the business. Ladli Parshad having refused to hand over the management to him, Shanti Parshad filed a suit against Ladli Parshad for a declaration that he had been properly appointed as managing director and for an injunction to Ladli Parshad to hand over the assets and the management of the company to him. Ladli Parshad filed a suit as a counter-blast against Shanti Parshad seeking a declaration that Shanti Parshad had ceased to be a director of the company because he had contravened section 86 (d) of the Companies Act by entering into a contract with the company. In the suit filed by Shanti Parshad there was an application for the appointment of an interim receiver and Madan Lai, the son of Durga Parshad, and Suraj Mukhi, his mother were appointed receivers by the trial Court. Ladli Parshad filed an appeal against this order in the High Court and the orders of appointment of receivers were suspended ex-parte. The parties then entered into a compromise though, as will appear from what happened later, that compromise was merely a patched affair. The main terms of the compromise were that Ladli Parshad gave up his position as a managing director, all the three directors being placed on equal footing and being entitled to Rs. 900 each per month, Shanti Parshad was made a manager with no salary and no travelling allow ance, and all resolutions whether in the general meeting or the directors' meeting were to be unanimous. In accordance with this compromise a number of resolutions, which provided inter alia, for the following matters, were passed on the 16th of October 1945 in a general meeting of the company :- (1) Ladli Parshad having resigned from the office of managing directorship of the company, his resignation was accepted. (2) Ladli Parshad transferred proportionate shares out of his extra 500 shares to each of the other two branches so as to equalize the shares of all the three branches. (3) Ladli Parshad was appointed a permanent chairman and director of the company, the other two directors being Shanti Parshad and Madan Lal. (4) There were to be only three directors and the quorum of the meeting of the directors was also to be three. . (5) Decisions at the directors meeting as well as at the general meeting could only be valid if unanimous. (6) The quorum of the general meeting was to be the chairman and two members. (7) Article 47, which provided that owners of 2/3rd shares could force the owners of 1/3rd shares to transfer their shares, was deleted. (8) It was provided that notice of meetings could be given only by means of a registered postcard. This, it may be here explained, was in view of the fact that Ladli Parshad had denied notice of the meeting of 20th of February 1945, saying that he had only received a letter containing abuses whereas the other party said that the letter contained an agenda. (9) A meeting of the directors was to be held on the first Sunday of each month. (10) Shanti Parshad was appointed honorary manager without even a travelling allowance. (11) Each director was to get a sum of Rs. 900 per mensem and Rs. 25 per meeting. (12) Ladli Parshad was absolved of all liability in respect of anything done by him as the managing director. Resolutions were also passed effecting changes in the Articles of Association in accordance with these resolutions, though there were some omissions to which reference will be made later. As a result of this compromise, the two suits which had been filed by Shanti Parshad and Ladli Parshad were with drawn. Ladli Parshad produced about two and a half lakhs of rupees which represented the profits of the company and this money was equally divided amongst the three branches. It will be observed that in accordance with the constitu tion of the company, as it was after this compromise, all the three branches were to have equal shares and an equal autho rity in the management of the business which could be run only with the assent of all the three branches. No resolution in the directors' meeting could be passed unless all the direc tors agreed and there could be no quorum unless all the three directors were present. In the general meeting also unanimity was essential. Ladli Parshad, who had given up his rights as managing director, was allowed this advantage that he was appointed a permanent chairman and there could be no quorum in the general meeting without his presence. It should be apparent that any of the directors could create a deadlock and Ladli Parshad had a special position inasmuch as even in a general meeting his presence was essential. I have already indicated that the compromise was only a patched affair and the very next meeting showed that the parties had not in fact made up their differences. The next meeting was held on the 4th of November 1945. On almost every point that came up before the directors there was a difference of opinion. Shanti Parshad, who became manager, was not well-disposed towards those persons who were already in the employ of the company. Some of them, particularly one K. L. Sharma, manager of the distillery, had behaved rudely towards him. One day Sbanti Parshad had tried to enter the distillery and Mr. Sharma had refused to allow him to do so, at which he had threatened Mr. Sharma with a pistol and forced his way into the distillery. Mr. Sharma took up proceedings under sections 107 and 151 of the Code of Criminal Procedure against him. Shanti Parshad, when he took over as manager, began dismissing those of the servants who he thought were siding with Ladli Parshad. Ladli Parshad took exception to this and said that he had no authority as a manager to dismiss them and that it was only the directors who could by a unanimous decision dismiss the employees. By the end of January 1946, a number of employees had been dismissed. In this state of affairs, on the 25th of February 1946, Madan Lal and Suraj Mukhi lodged a requisition for the holding of a meeting for the purpose of passing a resolution against Ladli Parshad for removing him from his offices of chairman and director and for effecting amendments in the Articles of Association. On the 3rd of March, in a meeting of the directors at which only Madan Lal and Suraj Mukhi were present, it was decided to hold a meeting on the 28th of March 1946 for consideration of the resolutions mentioned in the requisition. On the 28th of March a meeting was held of which Ladli Parshad says he had no notice. At this meeting:

(1) Ladli Parshad was removed from the offices of chair man and director, (2) Shanti Parshad was appointed managing director with a remuneration of Rs. 1,000 per mensem plus Rs. 200 as car allowance in addition to Rs. 900 which he was to get as a director under the resolutions passed on 16th of October 1945; (3) Suraj Mukhi was appointed director in place of Ladli Parshad and she too was to receive Rs. 900 like other direc tors; and (4) Article 47, which grave authority to owners of shares to the extent of 2/3rd to force the owners of 1/3rd to sell to them and which had been deleted in the meeting of 16th October 1945, was restored. Ladli Parshad having come to know, as he says, of this meeting, sent a notice on the 1st of April 1946 stating that the meeting was illegal and that he refused to recognize it. On the 1st of May 1946 he filed the present petition for winding-up. The grounds for winding-up- mentioned in the petition are :- (1) That the company is unable to meet its liabilities; and (2) that it is just and equitable under the circumstances that the company be wound-up. As regards the first ground the case of the petitioner is that at the time of the compromise he had made an overpay ment of Rs. 8,000 and that this money the company had not, in spite of demands, paid. He has also urged that Prem Nath, a lawyer of Karnal and his wife Mst. Indra Devi were the creditors of the company and in spite of notices having been issued by them the company had failed to make payment. In support of the second ground it is stated that Shanti Parshad. Madan. Lai and Suraj Mukhi had by convening the meetings of directors of the 3rd of March 1946 and the 28th of March 1946.illegally and improperly excluded him from the management; that a deadlock had been created and that since Shanti Parshad had taken over he had not been properly managing the com pany. The employee of the company had been dismissed mala fide and without authority; the accounts of the company were not being properly audited; sale proceeds of the com pany's products were not being deposited into the company's account; and no dividend had been declared. In reply the company denied that it was unable to pay its debts or that the debts alleged were really owing. It was denied too that there had been any mismanagement. The meetings of the 3rd of March and 28th of March 1946 were stated to be valid. On the other hand, it was alleged that the petitioner had by his mismanagement caused serious loss to the company, while the present management had vastly improved the position of the company. The petitioner had not paid the income-tax to the payment of which the company became liable during the time he was managing director. The present management had paid the income-tax and the company was running at a profit. The following issues were framed :- (1) Is the company unable to pay its debts? (2) Are the debts alleged to be due from the company disputed bona-fide? (3) Is it, for the reasons stated in the application, just and equitable that the company be wound-up? A good deal of evidence has been produced by the parties but it needs only a brief reference as few of the material facts on which judgment is to be based have been contested during arguments. The petitioner has produced Wali Ram Jhanji who is a stenographer and was personal assistant to the manager of the company. He used to take notes of the meetings of directors which were placed before the manager for approval by him. He says he was asked by Shanti Parshad to make some alterations in the proceedings of the meeting of 4th November, that para. 6 of the notes of that meeting which relates to income-tax did not appear in his shorthand notes and that so far as he remembers the subject-matter of the para. was not discussed at the meeting. It may be explained that Shanti Parshad charged the petitioner with a deliberate avoidance of consideration of the payment of income-tax. A report that the income-tax authorities had demanded the payment of income-tax had been admittedly placed in the meeting of the 4th November 1945 but no action was taken upon it. It is to meet this charge that this witness has been produced. The witness was dismissed by Shanti Parshad and it will not be safe to rely upon his word alone for proof of an interpolation in the minutes. D. P, Bohri (P. W. 4), an auditor, has stated that he examined the accounts of the company for the period beginning October 1935 and ending February 1941 at the instance of the petitioner and found several entries erased, overwritten or interpolated. No argument has been addressed to me as to the significance of the alleged alterations. Ram Bahadur Saxena (P. W. 3) was employed as a chemist by the company and says he was dismissed by Shanti Parshad because he refused to manu facture Indian made foreign liquor for the personal use of Shanti Parshad, such manufacture being prohibited at the time. Lai Chand Khanna (P. W. 4) is an income-tax adviser and says at the instance of the petitioner he prepared a report as to the liability of the company to pay tax. J. C. Chandiok (P. W. 5) is a chartered accountant who has been auditing the accounts of the company since it was formed. He says he was not allowed to examine the accounts for the year ending 31st March 1946. I am not inclined to attach any great importance to this statement. This witness is admittedly a friend of the petitioner and his employment as an auditor had been terminated because of his friendship. He admits that he had sent his assistant to examine the accounts on 29th March 1946 when the year had not yet ended and the accounts were not shown as they were not ready. On 17th May 1946 a resolution had been passed that the accounts should not be audited by this witness. P. W. 6 Pritam Singh, a general clerk in the distillery who had been suspended by Shanti Parshad, had filed an affidavit and was produced merely for cross-examination. Similar is the case with Des Rai Gupta (P. W. 7). The contents of the affidavits of these two witnesses have not been referred to during arguments. K. L. Sharma (P. W. 8) was the manager of the distillery and says he was dismissed by S. P. Jaswal. P. W. 9 is the petitioner himself who generally supports his petition. On behalf of the respondent the first-witness produced is Bishan Sarup who has been, since April 1.946, employed as a distillery inspector in the distillery of this company. He has been produced to rebut the charge brought by the petitioner that since Shanti Parshad took over management, the distillery has sometimes not been working at all. The witness states that the distillery has never stopped work. The witness also produced letters (copies placed on the record) from the Development Secretary, the Additional Secretary (Revenue Department) and the Financial Commis sioner. These letters show that the petitioner had been mismanaging the business for which reason the licence for Indian made foreign liquor was withdrawn. R. W. 2 is Yog Raj, the accountant of the respondent company. He states that the total demand of income-tax authorities, including E. P. T. for the period commencing 1st April 1941 and ending 16th November 1945 was 2,75,392-11-0, that out of this only Rs. 10,484-13-0 were paid by the petitioner and that by the 27th November 1947 the company has paid Rs. 2,10,342 to meet the demand of the income-tax authorities. There is no reason to doubt the statement of this witness but it may be pointed out that he has not mentioned the payment of E. P. T. by the petitioner and as learned counsel for the petitioner has shown by reference to the relevant balance sheet, the petitioner had also paid about Rs. 10,000 as E. P. T. Manohar Lal (R. W. 3) is the present manager of the company and states that the distillery plant is in normal working condition. This is in reply to a charge brought by the petitioner that the plant is not in a working condition and hat the company is not in a position to install another. R. W. 4 is B. L. Chopra, the accountant of the company, who has produced its accounts and also deposes to having sent a notice of the meeting of 28th March to the petitioner under a postal certificate: This statement, as will appear from the discussion of the factum of notice later in this judg ment, I do not accept. R. W. 5 is Shanti Parshad who generally supports his case. The first two issues may be shortly disposed of. The case of the petitioner on the point as it has been argued before me, relates only to the liability of the company to pay him Rs. 8,

000. This sum of Rs. 8,000 he says he had overpaid at the time of the compromise in October 1945. He led no evidence at all to prove that there was any overpayment. He was asked while under cross-examination as to what was the ground on which he urged that there had been an overpayment. He said that an employee of the company had given him this information. When pressed further, he said another employee had corroborated him. Now before me a certified copy of the account of L. P. Jaswal & Co. has been produced. The original account book is said to be lying in the Civil Court at Karnal. This certified copy shows that on 10th October 1945 the account was a creditor to the extent of Rs. 8,

000. In the first place there is no reason why I should allow this copy to be produced at this stage and reopen the case on this point allowing the respondent to rebut this evidence. The account from which the copy has been produced was lying in this Court when evidence was being led but no reference to this entry was made and no question put to any witness about it. No reasonable explanation has been given for this omission. Also the entry produced shows a creditor's account on 10th October 1945 while the petitioner's case was that on 16th October 1945 on account of a mistake he became a creditor. The entry does not support the case, which the petitioner had put forward. There is also the question of bona fides and it cannot, under the circumstances, be argued that the company is not disputing this debt bona fide. I have no hesitation in deciding issues Nos. 1 and 2 against the petitioner. I will now take up issue No. 3 which is the real subject of contest between the parties. . On this issue the case of the petitioner may be thus stated: this is a private company, there being no other share-holders except the five persons mentioned above; the relations between the parties are such that it is not possible to carry on the business of the company, they being admittedly not on speaking terms since 4th November 1945; there has been protected litigation between he parties; Shanti Parshad and Madan Lal had never the intention to carry on in co-operation with the petitioner and from the very beginning they were thinking of excluding the petitioner from management by some means, legal or illegal; the meetings of the 3rd March and 28th March 1946 were the result of this design notices of these meetings were deliberately not served on Ladli Parshad; the meetings were entirely illegal and as a result now Shanti Parshad, Madan Lal and Suraj Mukhi who have no right to carry on the business of the company to the exclusion of the petitioner are carrying it on by themselves; not only is the manage ment illegal but now these two branches have, in violation of their agreement of. 16th of October 1945, appropriated money to which they were not entitled; Shanti Parshad had agreed to act as manager without any salary whereas he is now receiving Rs. 1,200 per mensem and Rs. 200 as car allowance; Suraj Mukhi was not entitled to be substituted in place of the petitioner and to be paid Rs. 900 per mensem; since Shanti Parshad took over he has not got the accounts audited; he has not been depositing the cash in a bank regularly and no dividend has been declared; Shanti Parshad etc. have now passed a resolution forfeiting the shares of the petitioner and selling them to some person as a result of which illegal action they now claim that the petitioner is not a shareholder in the company at all; considering all these circumstances it is impossible to carry on the business of the company as it ought, according to its constitution, be carried on; the company should, therefore be wound-up. The device adopted for forfeiting the shares of Ladli Parshad is stated to be that the company called upon each of the three branches to pay to the company the share of profits which they received on the 16th of October 1945 because that money had been paid in spite of there being still a demand of the income-tax authorities and as the petitioner did not pay this share of the profit, that was regarded as a debt due to the company and as the company is entitled to forfeit the shares of any member who does not pay his debt, there was a forfeiture of shares. Subsequently the shares were sold. It may be stated here that on account of this action of the company the petitioner had to file in the Civil Court at Karnal a suit for a declaration that the meetings of the 3rd March 1946 and 28th March 1946 and all subsequent meetings of the directors were illegal and not binding on him and that lie still remained a shareholder and a director, and for an injunction restraining Shanti Parshad etc. from acting upon or carrying into effect the resolutions passed in the meetings of the 3rd and 28th March 1946. This suit was decreed by the trial Court. It was dismissed on appeal by the District judge but has been decreed on further appeal by the High Court on 28th October 195.4. A certified copy of this judgment has been placed on the record. It appears to me that the question of the validity of the meeting of 28th March is of importance for the decision of issue No.

3. I will, therefore, determine in the first place whether this meeting was illegal. Learned counsel for the petitioner has impugned the validity of this meeting on the following grounds :- (1) The meeting of the 3rd of March at which the decision to hold a meeting on the 28th of March was taken was itself illegal for it was without notice, without quorum and did not comply with Article 122 of the Articles of Association according to which the assent of all the three directors was essential for every decision. (2) The meeting of the 28th March was held without notice to the petitioner. (3) The notice of the meeting was, in any case, not a valid notice for it was not by registered post. (4) The notice was also illegal because it was not delivered twenty-one clear days before the meeting was held. (5) The meeting of the 28th of March was illegal for want of proper quorum. With respect to the meeting of the 3rd of March, it is admitted by Shanti Parshad himself that no notice of the meeting had been served on Ladli Parshad. The justification. pleaded for this omission to give a notice is the new article 120 of the company wherein it has been provided that a meeting of the directors would be held on the first Sunday of each month. It is urged that there was, in view of this, article, no need for sending a notice at all. I have no hesitation in rejecting this argument. The articles, no, doubt, provide that a meeting would be held, as far as possible on the first Sunday of each month but they do not provide for any time and place and a notice is also necessary because every director is to be informed beforehand of the agenda of the meeting. I may also refer to the provision in the articles of association that a notice of the directors meeting is to be sent by registered post-card and that no notice is necessary for a director who is not in India. These provisions would have been unnecessary and out of place if the mere fact that a meeting was to be held on the first Sunday of each month was sufficient notice. I hold that a notice for this meeting was necessary and there being no notice the meeting, as was held in H. M. Ebrahim Sait v. South India Industrials Ltd. (A I R 1938 Mad. 962) was invalid. The meeting of the 3rd of March was invalid also for the reason that there was no quorum of the meeting. As already stated, the quorum of a meeting of the directors is three. If there was no quorum, there would be as was held in Greymouth Point Elizabeth Railway and Coal Company Ltd. ((1904) 1 Ch. 32), no" meeting in the eye of law. Considering that the meeting of the 3rd March by which the directors resolved to hold a meeting on the 28th of March was invalid, the proceedings on the 28th of March 19461, would automatically fall, for the decision of the directors toy hold a meeting has also to be taken in a meeting. A decision that a meeting should be held is, as was held in N. V. R. Nagapna Chettiar v. The Madras Race Club (L R 1949 Mad. 808) not merely a ministerial act. The directors have to exercise their discretion and to fix a proper time and place. There are two more reasons why the meeting of the 28th of March could not be legal. According to article 85 which is quoted later in this judgment only the chairman of the directors could be the chairman of a general meeting. The petitioner had been appointed the permanent chairman of the company and no meeting could be held unless he presided. The second and the more important reason for holding this meaning to be illegal is that in fact the petitioner had no notice of it. It is alleged by Shanti Parshad that a notice of the meeting had been sent to the petitioner under postal certificate. I have no doubt after considering the circumstances that this allegation is untrue. In the Articles of Association the provision was that every notice was to be sent by registered post-card. I can understand that, if there is a lengthy agenda, it need not be on a post-card but in accordance with the articles it would have to be sent by registered post. Before this meeting Shanti Parshad had twice written registered letters to the petitioner saying that Madan Lal would not be in town and, therefore, the monthly meeting would not be held. These are letters Exhs. P. O. and P. O./1 and Exhs. P. N. and P. N./1 relating to the meetings of December 1945 and January 1946, res pectively. If, when intimating the petitioner of the fact that Madan Lal was not to be in town, registered letters were sent, I fail to see why for a meeting in which there was a severe attack on the petitioner's status the notice should have been sent by ordinary post. No explanation has been given why this was done. The agenda was of about sixteen pages. One would even ordinarily expect any such important agenda to be sent by registered post even if one does not take into consideration the article which provides for registered post. Having regard to the previous conduct of Shanti Parshad in sending registered letters, to the importance of resolutions that were proposed, and to the fact that Shanti Parshad knew very well that if the petitioner attended the meeting he could by his own vote defeat these special resolutions, there can be no doubt that the story of the dispatch of this notice is untrue. The resolutions were admittedly special resolutions. Every special resolution requires under section 81 of the Companies Act a ths majority in order to carry it. The petitioner owned 1/3rd of the shares and Shanti Parshad knew that he could not possibly get any such resolution passed if the petitioner opposed it. It seems to me that Shanti Parshad and Madan Lal had been thinking of means, legal or illegal, to exclude the petitioner from the management of the company and the meetings of the 3rd March and 28th March were intended to give effect to this design. Learned counsel for the respondent has urged that the provision with respect to registered post in the articles is not legal. He relies on section 17 of the Companies Act by which Regulation's Nos. 112 to 116 in Table A of the Companies Act are deemed to be incorporated in the articles of associa tion of every company. Of these, article 112 provides that notice may be given personally or by post I accept that if the effect of Article 163 be (as is claimed by learned counsel for the petitioner) that it invalidates all notices sent otherwise than by registered post-card, the article is in conflict with Regulation 112 and to that extent invalid. Learned counsel for the petitioner places reliance on the fact that section 17 employs two expressions "identical with" and "to the same effect as" and contends that it would be sufficient if substantially the effect of the Article is the same as that of the Regulation. I am inclined to agree that the use of two expressions in section 17 is intended to dispense with the necessity of literal identity and points to the sufficiency of substantial identity but it cannot be said that in this case the substantial effect of Article 163 is the same as that of Regulation

112. The Regulation allows service to be effected personally or through post while according to the article no service is valid unless it is by a registered post-card. However, while I accept this contention of the learned counsel for the respondent, I do not see how it helps him because I reject the contention of the respondent on the question of the factum of notice. I may also, point out that Shanti Parshad was not at that time regarding this article as illegal. He had been complying with it before. The real reason for this non-compliance is, as I have already stated, that he had no intention of serving a notice on the petitioner. He dare not do so because the petitioner could defeat the resolution. I do not accept the objection taken by learned counsel for the petitioner as to the insufficiency of the period of notice. He says the notice was to be of twenty-one clear days as required by section 61 for a special resolution and that according to Article 169 a notice sent by registered post is deemed to have been served on the fourth day after which it was issued. Notice was in this case sent on the 4th of March and according to learned counsel should be deemed to have reached on the 8th of March. Between 8th of March and 23rd of March there are only nineteen clear days. I agree that if a notice had been served on the 8th of March and the meeting was held on the 28th of March, the number of clear days would be only nineteen as was held in re Railway Sleepers Supply Company ((1885) 29 Ch. 204) and in re Hector Shaling Limited ((1936) 1 Ch. 208), but I reject the contention that in this case notice should be deemed to have been served on the 8th because this article of the company is in conflict with Regulation 112 (2) in Table A. Regulation 112 (2) provides that a notice should be deemed to have been served on the day on which it would reach the person concerned in the ordinary course of post. In this case a notice which was sent from Karnal to Delhi would not take four days. For the reasons stated above I hold that the proceedings of the meeting of 28th March were illegal. Having decided that the meeting of the 28th March, was illegal, I now proceed to consider an important contention raised by learned counsel for the respondent that the resolutions passed on the 16th October 1945 were illegal. The occasion for this contention arises in the following manner. It is argued on behalf of the petitioner that this is a company, which according to its articles could not; be run except by the un animous assent of the directors as well as the members. i.e. the directors could only act if unanimous and in a general meeting resolutions could be passed only by the consent of all. The petitioner had been appointed permanent chairman and without him there could be no quorum. The result is that unless all the members and at least all the directors go on agreeing, the business of the company cannot be carried on at all. In the circumstances the petitioner in support of his claim to wind-up the company relies on the creation of a deadlock in the company. He says there exists now in this company a complete deadlock because the constitution of this company requires that the business should be carried on with the consent of all and the consent of all cannot be secured. He does not accept that he is, in any way, to blame, for he says he had been making all efforts to help in the management of the company and it is the other party that behaves improperly and unreasonably. However, what ever be the position as to who is creating the deadlock (he goes on to argue) the fact remains that if anyone of the directors does not want to carry on, this company shall, according to its constitution, have to stop. Faced with the situation that according to its constitution the company cannot function at all, learned counsel for the respondent contends that the very basis of this argument is non-existent, for the resolutions of 16th October 1945 which provide for a unanimity in the carrying on of the business or the passing of the resolutions at a general meeting and for a permanent chairman as well as for the quorums of meetings of directors and of members are themselves ultra vices. So far as the provision as to unanimity for a meeting of the shareholders is concerned, he says it contravenes section 81 of the Companies Act, which provides only for a three-fourths majority for special resolutions. He urges at the same time that the provision as to unanimity and the other provisions which would confer upon a minority the power of putting a stop to the business of the company are invalid because they are opposed to the memorandum of the company according to which the object is to carry on business inasmuch as such provisions are obstacles in the way of carrying on business. So we have to deal with two questions. The first question is whether a provision as to the necessity of un animity in a meeting of the shareholders of a company is illegal because it provides a greater majority than is provided in section 81 of the Companies Act. The second question is whether the provisions relating to unanimity and the other connected provisions are invalid because they are obstacles in the way of the business of the company. Before entering into a discussion of these questions, I will quote the relevant articles in their amended form. They are :- 83. "Two members and the chairman present personally being holders of ordinary shares shall be a quorum for a general meeting, the declaration of a dividend and an adjournment of the meeting. For all other purposes the quorum for a general meeting shall be three members being holders of ordinary shares present in person or by proxy". 84. "No business shall be transacted at any general meeting unless the quorum requisite shall be present at the commencement of the business". 85. "The chairman of the directors shall be the chairman at every general meeting and no proceedings shall be valid until he takes the chair". 86. "If within half an hour from the time appointed for the meeting a quorum is not present, the meeting if convened upon such requisition as aforesaid shall be dis solved, but in any other case it shall stand adjourned to the same day in the next week at the same time and place, and if at such adjourned meeting a quorum is not present, the meeting shall be cancelled". 87. "Every question submitted to a meeting shall be deemed to have been decided only if such decision is un animous". 120. "The directors shall meet together, as far as possible, on the first Sunday of every month for the dispatch of business and the quorum necessary for the transaction of such business will be three". 121. "Directors including the chairman may at any time convene a meeting of the directors. It shall not be necessary to give notice of a meeting of the directors to a director who is not in India". 122. "All questions arising at any meeting shall be decided unanimously by the directors". 123 "At all meetings of directors the chairman shall pre side and no proceedings shall take place until he takes the chair". The first question is one with respect to which some difficulty is created by sections 20 and 81 of the Companies Act. However, after giving the matter full consideration I have no doubt that a provision in the constitution of a company which provides for unanimity in every meeting of the shareholders is only partially illegal and the decision of this case will not be affected by this defect. I will first explain the argument as it can be put forward on behalf of the respondent. Section 20 provides that a company may by special resolution amend its articles (subject to the memo randum). According to section 81 a resolution is a special resolution when it is passed by not less than 3/4th majority at a meeting of which not less than 21 clear days' notice has been given. The combined effect of the two sections is to confer on the company power to amend its articles by a special resolution and if section 81 provides the maximum conditions for the passing of a special resolution, then it cannot be open to the company to provide any further conditions in order that a special resolution may be passed. Section 81 provides all that is needed for the passing of a special resolution. If this be the correct position with respect to a special resolution, that is, if the company be unable to provide any greater majority for a special resolution than is provided by section 81 or to add any further conditions to the passing of a special resolution, then will it not be illogical to hold that with respect to ordinary resolutions power is still left to the company to provide for any majority or un animity? When the Act provides a special majority for a special resolution, it does so because it regards the matters which are the subject of special resolutions as important and such as should not be allowed to be passed unless the requisite majority is there, but that should imply, although the Act nowhere states expressly, that a company is entitled to pass all ordinary resolutions by a bare majority. The first part of this argument has to be accepted. Section 20 grants power to a company to amend its articles by a special resolution and section 81 defines a special resolu tion. If a resolution amending the articles conforms to section 81, the articles would stand amended in accordance with law. Section 81 provides all that is required for a special resolution and it cannot be open to a company to place further restrictions on the amendment of its articles. Of course the company may make provisions within the four corners of section 81 with respect to service of notice and the holding of meeting because by subsection (7) of section 81 these matters are still within the power of the company. Subsection (7) runs as follows :- "For the purposes of this section notice of a meeting shall be deemed to be duly given and the meeting to be duly held when the notice is given and the meeting held in manner provided by the articles, or under this Act". With respect to notice and the holding of the meeting, the company may, by virtue of this subsection, prescribe further conditions. I may here reply to a possible argument that the company being entitled to add further conditions as to notice and meeting, it may in an indirect manner provide for a majority higher than three-fourths and, therefore, we cannot import into section 81 an intention to forbid a higher majority. For instance, the company may provide for a quorum of more than three-fourths with the result that three-fourths of the shareholders will not be able to pass a special resolution. The argument is without force for the provisions as to notice and holding of a meeting do not apply when a meeting is held by order of Court under section 79 (3). If on account of any provisions in the articles which the company has inserted by virtue of its powers under section 81 (7) it becomes impracticable to call a meeting of the company, the Court can order the holding of a meeting and the meeting held under orders of Court will be valid though it does not comply with the aforesaid provisions. Special provisions as to quorum and notice can always be defeated by a recourse to Court. The provision as to three fourths majority and twenty-one days' notice cannot be defeated, however, by a recourse to Courts for these are essential ingredients of a special resolution. Though I accept the first part of the argument, the conclusion suggested by learned counsel for the respondent does not necessarily follow. There being no express pro vision debarring companies from providing higher majorities for ordinary resolutions, we have to see if there is a necessary implication. It is to be remembered that we are dealing with a matter of private contract. We are being asked to declare a particular contract illegal and this should not be done in the absence of a clear indication. If I accept the argument put forward on behalf of the respondent, I will have to accept also that if the articles of a company provide for one more vote than what constitutes a bare majority, the articles will be illegal. Learned counsel for the respondent accepts that consistently with the position which he takes up he must say that whenever the articles of a company provide that any particular resolution shall be passed by a majority which exceeds however slightly a bare majority, the articles would be invalid. For instance, if the articles provide that instead of there being a majority of one share there should he a majority of two shares even though the total shares in the company are twenty lakhs, the articles would, in accordance with the contention of learned counsel for the respondent, be invalid. Learned counsel is forced to take up this position because the only argument can be that the Act, although not expressly saying so, tacitly recognizes that everything can be done by a bare majority and that when it prescribes that by a three-fourths majority special resolution can be passed, it necessarily implies that by a bare majority ordinary resolu tions can be passed. If this were the intention of the legislature, it ought to have been made abundantly clear. This would be a far- reaching change in the law and far-reaching changes cannot be effected by doubtful implications. When the first Companies Act was passed and the companies were constitut ed juristic persons, there existed only partnerships. In a partnership business if it was provided that without the consent of one of the partners who held less than one-half share in the partnership, no business could be transacted and no action taken, it could hardly be argued that such a provision was illegal. Companies are really partnerships with the addition that a new juristic entity which is really a convenient method for the transaction of business and the acquisition and transfer of property has been created. If it H were the intention of the legislature that henceforth when persons join together to carry on a business by the formation of a company, they will be debarred from making a provision that the business shall not be carried on except with the consent of all, there should have been an express provision to that effect. I admit that the inability of a company to provide for a higher majority for special resolutions and full powers to provide a higher majority for ordinary resolutions do not go well together. But this is a case where I should not enter into conjectures as to why the legislature made a provision with respect to the one and not with respect to the other. It is sufficient for me to say that if it was the inten tion of the legislature to interfere with the liberty of private contracts so as to invalidate a provision as to unanimity, it should have said so. Companies have existed for centuries in England and India and there is no case in which such a provision has been declared illegal. I may at the same time point out that if I were to accept the contention of the learned counsel for the respondent as to the invalidity of such a provision in a meeting of the shareholders, the alleged anamoly will still remain for section 81 does not apply to directors meeting and could not have the effect of invalidating a provision as to unanimity in a directors' meeting. The business of a company is carried on by the directors to whom large powers are granted by the Companies Act. So if the provision as to unanimity in a meeting of the shareholders were to be declared illegal, the alleged anamoly would hardly be removed. Learned counsel for the respondent attacks even the provision as to unanimity in a directors' meeting on grounds relating to the second question with which I have-to deal. As will appear from the discussion that follows, I do not accept these grounds. I hold that article 87 in. so far as it applies to special and extraordinary resolutions offends against the provisions of the Companies Act. This does not mean that the whole article is void. Only it is subject to section 81 and the requirement as to unanimity has no effect with respect to special and extraordinary resolutions. I may state that practically this would not make any difference so far as the contest between the petitioner and the other two branches is concerned. The petitioner holds one-third of the shares and unless he agreed, no special resolution could be carried in a meeting in which he was present. The second question does not require any elaborate discussion. The argument put forward is that provisions of this nature are invalid because they are opposed to the memorandum of association inasmuch as according to the memorandum the object of the company is to carry on business and any provision which tends to create a dead lock defeats the object with which the company is floated. It is pointed out that under section 20 amendment of articles is subject to the memorandum. I have no hesitation in rejecting the argument that any provision which tends to create a deadlock is opposed to the memorandum. A dead lock can always be there if votes of the two opposing groups in a company are exactly equal. The Companies Act does not make any provision for resolving the deadlock in such a contingency. It does not provide for any casting vote and no casting vote, I may mention, was provided by the Common Law of England. A private company may consist of only two members and in such cases unless both agree no resolu tion can be passed. The Act allows two persons to form a company and with two shareholders only a deadlock can easily occur. The provisions that place some authority in the hands of a minority with respect to the business of a company cannot be regarded as inconsistent with the objects of the company. A specification of objects only prevents the company being run for objects other than those mentioned in the memorandum. Learned counsel says it is opposed to the: very idea of a company that the minority should have the power of veto so as to create a deadlock and that the majority should always have the power to run a company. But so far as special arid extraordinary resolutions are con cerned, a minority exceeding one-fourth has always the right of veto. In any case, such general considerations are rather slender foundations for holding that the provisions which grant power of veto to a minority are invalid. Learned counsel can cite no authority in support of his argument. I may here mention another argument put forward by the learned counsel in respect of the validity of some of the relevant articles. He points out that with respect to some of the articles which were in fact abrogated by the compromise of 16th October 1945, while resolutions negativing the con tents of the articles were passed, there were no separate resolutions for amendment of those articles. It is urged by the learned counsel that unless and until there was a separate resolution saying that a particular article was amended, any resolution inconsistent with that article would not legally have any effect. The reply -to this argument is section 82 of the Companies Act according to which every special and extraordinary resolution passed by a company has to be embodied in or annexed to every copy of the articles of r association issued after the date of the said resolution. This would mean that the resolutions which effect any changes in the articles, even if they do not expressly say so, become part of the articles. English decisions regarding necessity of amend ment of articles are not relevant for there is no provision corresponding to section 82 in the English Act. Although I have held that the resolutions passed on the 16th of October 1945 are not illegal, I may point out that even if I were to hold that those resolutions were illegal, the result would not favour the respondent. These resolutions were the result of a compromise. If the resolutions in favour of the petitioner were illegal, the whole compromise would fail, for the consideration for the contract being illegal, the contract would be void. Shanti Parshad and Madan Lal can not retain the benefits and avoid the disadvantages of that compromise. If the contract fails, it fails wholly and then the rights of parties would be the same as they were before the contract was entered into. The result would be that the petitioner would be the managing director of this company receiving the same emoluments as he was receiving before the resolutions were passed on the 16th of October 1945. The position then is that the petitioner is legally entitled to a part in the management of this company and without hip assent the business of the company cannot be carried on. The relations between the parties are such that they cannot possibly carry on joint business. The petitioner has by illegal and improper means been deprived of his part in the management of this company as well as of his emoluments as a director and the other party have taken improper control of the management of the company. They have also been receiving improper payments in the form of their own salaries, In addition to this they have passed resolutions forfeiting the petitioner's shares and then selling them so that he is now said to be not a shareholder at all. In the circumstances, quite apart from the authorities which I will presently con sider, it seems to me that it would be proper to wind-up this company. Let me consider here the objections taken by the respondent to the conduct of the petitioner. I may make it clear that I am not at all satisfied that the petitioner himself has been behaving in a proper manner with respect to this company. When this company was formed, he was the eldest member of the family. There were three branches of the descendants of Kishori Lal. To the other two branches he allowed only Rs. 250 per mensem as directors and to himself he allowed not only Rs. 2,450 per mensem but also 7 per cent of the profits. Considering that they were all descendants of the same father, it seems to me that he improperly appropriated to himself the major portion of the profits. He also got the benefit of the use of the company's money by getting a resolution passed that he could have a cash credit account with the company. Not only that, he benefited himself by contracts which he took in the name of the company. There was one contract for supply of bath basins and tubs which was taken by him in the name of the company but the profits of which he received himself. The profits not having been mentioned in the books of the com pany, the income-tax officer called upon the company to show any good reason why the profits relating to this contract had not been entered. The company wanted to prove that the profits had been received by the petitioner and the petitioner was asked to produce his accounts before the income-tax officer to show that he had received these profits himself, but on one pretext or the other he avoided appearance before that officer. The result was that the company was burdened with a total additional tax (income -tax and E. P. T.) of the amount of Rs. 90,

000. I have men tioned already that the petitioner had been carrying on his own business too while he was managing director of the company and that his business was of the same character as that of the company. He was carrying on business in the name of Ladli Parshad & Sons and Ladli Parshad & Co. In these names he had contracts with the Government. He removed his office of the company from Karnal to Delhi. He was directed by the Excise Department to keep his office in the distillery at Karnal. On account of bad management he has deprived of the licence for manufacturing Indian made foreign liquor and the licence was restored only after the management was taken over by Shanti Parshad. The Financial Commissioner had been administering warnings to him on account of the bad management and had been telling him that he should pay more attention to the company's business than to his personal contracts. There was a contract about solidified fuel. which had been taken by the company and which was, as the petitioner himself admits, a profitable contract. This contract he transferred to himself and made a handsome profit out of it. He has been asked as to why he did so and his reply is that this was done with the consent of all the directors. This reply does not satisfy me. He may have secured their consent as he was the eldest member of the family but I would still regard his conduct as leaving much to be desired. He was the managing director of the company whose duty it was to protect the company's interests. It has been urged on behalf of the respondent that it had paid about Rs. 4,70,000 as income-tax and E. P. T. on account of the period from the beginning of the company up to the 16th of October 1945 when the petitioner was in charge. I do not think that the respondent has succeeded in showing that the whole of this amount was due to that period but there can be no doubt that the petitioner had paid only about Rs. 20,000 as income-tax and E. P. T., and the remainder of the tax of his period which amounts to about two lakhs of rupees was paid by the company after he handed over charge. There can be no doubt too that the attitude of the petitioner with respect to the payment of income-tax due from the company was improper. On the very first meeting of the directors held after the compromise, that is, the meeting of 4th November 1945, a report was made by Shanti Parshad that the income-tax authorities had demanded payment of income-tax within two days. The petitioner says he did not even read that report though he admits it was produced in the meeting. He had distributed dividends without paying income-tax or showing in the accounts that any tax was still due. There is one another important circumstances to be mentioned. In August 1944 was started a distillery known as Jagjit Distillery and Allied Industries Limited at Hamira in the Kapurthala State. Of this company the petitioner owns the bulk of shares. He is the managing agent of this company and it is admitted that he receives from it Rs. 5,000 per mensem. This company is no doubt now a rival company for the Karnal Distillery. Even when it was started it could supply liquor to Ambala Division which was one of the divisions to which the Karnal Distillery Company was to supply liquor, and in April 1946 (after filing this petition) the petitioner did get permission for the Jagjit Distillery and Allied Industries Limited to supply liquor to Ambala Division. There can be no doubt that it is to the interest of this rival business that the Karnal Distillery Company should be wound-up. The petitioner has a far greater interest in the Hamira Company than lie has in the Kanal Distillery Company and it is quite obvious that the winding up of this company would he very beneficial to him. It leas been urged on behalf of the respondent that this is his object in putting in this petition for winding-up. While it is not proved that the present petition was originally filed with this object, I agree that this may be one of the objects of the petitioner in prosecuting this petition. This conclusion is supported by the fact that on a winding-up of this company the petitioner does not stand to gain much by distribution of assets of the company. The only assets (in addition to cash) are the machinery and the licence. The machinery which is fairly old will not fetch a high price for 'it can be purchased only by a licensee-and the licence cannot be sold at all. There are two matters, however, which have to be kept in view. The first is that the respondent has been unable to prove any fact showing that even before submitting this petition for winding-up the petitioner had actually done some thing to harm the present company in order to help the Hamira Company. The second and the more important point is this. It may be that the petitioner is in the wrong. His object too may not be very proper but he is a person legally aggrieved. If the resolutions of 16th October 1945 are legal, he had a right to apart in the management of the company. In fact without his consent the management could not be carried on. There can be no doubt too that Shand Parshad and his party held the meetings on the 3rd of March and 28th of March illegally. They deliberately did not serve any notice ors him. They knew that they could not legally get him out of the management because for every special resolution at least three-fourth majority was needed and the petitioner owned one-third of the shares. Their action was mala fide as well as illegal. Their conduct may have been the reaction of that of the petitioner but there can be no doubt that they too behaved neither properly nor in accordance with law. Whatever may be said in mitigation of it, their conduct cannot be wholly justified. That is the way I look at the matter without the help of authority. What is just and equitable is to be decided according to the circumstances of each case but there is one principle which can safely be laid down. If a share-holder in a company is being unjustly treated and the injustice cannot be L adequately remedied except by a winding-up order, such an order ought to be made. I will now consider the cases cited in support of the proposition that in circumstances like the present the company should be wound-up. While arguing this point great stress has been laid by learned counsel for the petitioner on the fact that this is a family concern and it has been urged that the circumstances which would provide grounds for winding up a partnership should also apply to the case of a private limited company the shareholders of which are members of one family. The first case cited is In re Yenidje Tobacco Co. Ltd. ((1916) 2 Ch. 426). In that case a. private limited company had only two share holders both of whom were also directors. According to the constitution of the company if the directors did not agree there was to be a reference to arbitration and the award was to be regarded as a resolution of the directors. There was a dispute between the two directors and a reference to arbitration. One of the directors refused to give effect to the award and filed a- suit against the other for fraudulent mis representation in connection with the original agreement which resulted in the formation of the company. The parties became so hostile that they would not speak to each other and communications were conveyed through the secretary of the company. A petition for winding-up having been put in, it was held that the circumstances were such that if it was a partnership, there would be good ground for winding it up and the same principles should apply where there was in substance a partnership in the guise of a private company. The situation amounted to deadlock and, in any case, it was just and convenient that the company should be wound-up. The case is similar to the present case. Here too the members are at loggerheads. There have been a number of cases between them. They are not on speaking terms. It is impossible for them to collaborate in the business of the company. The company though a private limited company is in essence a family partnership and the principles applicable to the winding-up of a partnership may very well apply to it. In re Davis & Collect Ltd. ((1935) 1 Ch. 693) is also a case relating to a private company wherein following In re Yenidje Tobacco Co. it was held, that the circumstances entitling "a partner to require dissolution of partnership entitle a person who is equally interested with the other person in a company to have that company wound-up." It was also held that in such a company when one of the directors has by means of irregu larities acquired complete control of the company so as to exclude the other director or directors from the management, it may be just and equitable to wind-up the company. The principles enumerated would apply to the present case. The next case cited is Loch and another v. John Blackwood Ltd. ((1924) A C 783). That case related to a public company but their Lordships of the Privy Council held that the shareholders being members of a family the company was a family concern and this fact, their Lordships said, was of importance in decid ing whether the circumstances justified an order for winding up. There are two passages in this judgment which can afford guidance in the decision of the question before me. The first is a passage at page 788 which runs :- "It is undoubtedly true that at the foundation of applica tions for winding-up, on the 'just and equitable' rule, there must lie a justifiable lack of confidence in the conduct and management of the company's affairs. But this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company's business. Furthermore the lack of confidence must spring not from disaffection at being outvoted on the business affairs or on what is called the domestic policy of the company. On the other hand, where ever the lack of confidence is rested on a lack of probity in the conduct of the company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the company be wound-up." The second is a passage from Baird v. Lees ((1924) S C 83 (92)) quoted with approval at page

793. It runs :-- "I have no intention of attempting a definition of the circumstances which amount to a 'just and equitable' cause. But I think I may say this. A shareholder puts his money into a company on certain conditions. The first of them is that the business in which he invests shall be limited to certain definite objects. The second is that it shall be carried on by certain persons elected in a speci fied way. And the third is that the business shall be conducted in accordance with certain principles of commercial administration defined in the statute, which provide some guarantee of commercial probity and efficiency. If share-holders find that these conditions or some of them are deliberately and consistently violated and set aside by the action of a member and official of the company who wields an overwhelming voting power, and if the result of that is that, for the extrication of their rights as share-holders they are deprived of the ordinary facilities which compliance with the Companies Act would provide them with, then there does arise, in my opinion a situation in which it may be just and equitable for the Court to wind up the company. The principles enunciated in these two passages are intended to apply to an application for winding-up by an ordinary shareholder. The case before me is much stronger for here a person himself entitled to participate in the manage ment has been excluded. Some other cases were cited but I do not consider it necessary to refer to them as they lay down no new proposi tion and the principles on which one should act seem to be well-established. Here there is a deadlock in the affairs of this company which by itself is a ground for winding-up. The management is not being carried on by persons who by agreement between the parties were to carry it on and this, according to the passage quoted in Loch v. John Blackwood from Baird v. Lees, may be a good ground for winding-up. I am referring to the second condition mentioned in that passage which substantially though not literally covers the present case. Shanti Parshad and Madan Lal have by holding meetings that are not in accordance with law excluded the petitioner from business. Shand Parshad and Suraj Mukhi have been improperly receiv ing monies to which they were not entitled and it has been urged by learned counsel for the petitioner that if the company is wound-up the accounts between the parties can be easily settled in liquidation proceedings. Considering all these circumstances there cannot be any doubt that an order for winding-up should be made in this case. It has been represented to me that the company is making good profits and it will be a severe blow to Shanti Parshad and Madan Lal if the company is wound-up. It has been urged that the distilling licence which is a very valuable asset will be cancelled. While I cannot refuse a winding-up order in the circumstances of this case in spite of the petitioner's conduct, I think it will be possible to take steps to protect the interests of Shanti Parshad in the event of a winding-up. On a reference to the Excise Manual I find that the Financial Commissioner has a discretion to cancel the licence of the company which has gone into liquidation and is not bound to do so. This is a fit case where he may allow the licence to continue. The liquidator can auction the machinery and it will be open to Shanti Parshad and Madan Lal to purchase it and I do not regard it improbable that the shareholder who purchases the machinery may also be able to retain the licence. Learned counsel for the petitioner had offered that instead of the company being wound-up the contesting parties may bid for the whole assets of the company. Learned counsel for the respondent did not agree on the ground that the petitioner was able to pay a higher price and would outbid Shanti Parshad and Madan Lal and acquire the company for himself, thereby putting an end to a rival of the Hamira Company. In the liquidation proceedings it may be possible, when the assets of the company are sold, to exclude, by an order of Court any bid by the petitioner or his agent or benamidar, affording thereby a fair chance to Shanti Parshad and others to acquire the business at a reasonable price. I am stating what occurs to me at present and I have no doubt that by this or other appropriate orders this family dispute can be settled in a fair and just manner. I order that the company be wound-up. A. H. Wounding-up ordered.