Judgement Appeal (No. 95 of 1928) by special leave from a decree of the High Court in its appellate jurisdiction (November 13, 1924) reversing an order of the Court in its ordinary jurisdiction (November 3, 1922). The appeal arose out of a petition by the first four respondents and two others, who between them held 32 out of the 200 shares issued by the appellant company, for an order under s. 162 of the Indian Companies Act, 1913, that the company be wound up by the Court. The petition was heard by Kumaraswami Sastri J. and dismissed on November 3, 1922. An appeal heard by Spencer and Devadoss JJ. on November 13, 1924, was allowed and an order winding up the company was made. Special leave to appeal to His Majesty in Council was granted on December 2, 1926. The material facts appear from the judgment of the Judicial Committee. 1931. Feb. 20, 23. Narasimham for the appellants. Upjohn K.C. and K. J. Rustomji for respondent No, 6, the official liquidator. The other respondents did not appear. July 28. The judgment of their Lordships was delivered by LORD BLANESBURGH. This is an appeal from a judgment and decree of the High Court of Judicature at Madras, dated November 13, 1924, reversing a judgment and order dated November 3, 1922, of a single judge of the same High Court in its ordinary original civil jurisdiction. These orders were made in the matter of a petition presented to the Court on May 1, 1922, for the compulsory winding up of the appellant company. By the order of November 3, 1922, Kumaraswami Sastri J. dismissed the petition with costs. On appeal his order was discharged by that of November 13, 1924, and the compulsory winding up of the company was thereby decreed. This appeal from that order reached the Board for hearing more than six years after it had been made. Its discharge accordingly involved the supersession of all proceedings in a liquidation which as a result of it had then been in operation for more than eight years. To this fact are attributable the grave difficulties which have confronted the Board in disposing of the appeal. The company was constituted in 1882 for the purpose (1.) of erecting a cotton-pressing factory at Raichur in Hyderabad and (2.) of erecting a sugar factory at Hospet in the Madras Presidency of British India. To this fact are attributable the grave difficulties which have confronted the Board in disposing of the appeal. The company was constituted in 1882 for the purpose (1.) of erecting a cotton-pressing factory at Raichur in Hyderabad and (2.) of erecting a sugar factory at Hospet in the Madras Presidency of British India. It was registered in Madras solely because part of its business was to be carried on in British India. But for the Hospet project it would have been registered in the Nizams Dominions. The Hospet factory did not materialize; it was definitely abandoned as a project in 1909. The company has never done any business in British India. Its sole activities have been centred at Raichur in connection with the factory which in due course was erected there. The fact that the fixed property of the company and its business have thus been in one jurisdiction and its place of incorporation and statutory obligations in another has always been a source of difficulty. It hampered the company in its competition with local rivals it exposed it to the risk of double taxation its accounts were necessarily kept at Raichur in the local vernacular, and the compilation of the annual statements at Bellary from these materials in a form to meet the requirements of the statute law of British India must always have been difficult and never quite 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 200 satisfactory. It is unfortunate that in the liquidation no allowance appears so far to have been made for, or consideration given to, these difficulties inherent in the situation. The company was not a private company, but its share holders were never numerous. Its articles of association were those of table A of the Act of 1882, with modifications introduced which did not affect its status as a public company. It had a nominal capital of Rs. 1,25,000, divided into 250 shares of Rs.500 each. Of these, 200 shares were issued at the time of its formation, Rs.250 being then called up on every share. This paid-up capital sufficed for the establishment of the Raichur factory. The 200 shares with Rs.250 paid up were in May, 1922, in the hands of twenty-four holders or sets of holders. 1,25,000, divided into 250 shares of Rs.500 each. Of these, 200 shares were issued at the time of its formation, Rs.250 being then called up on every share. This paid-up capital sufficed for the establishment of the Raichur factory. The 200 shares with Rs.250 paid up were in May, 1922, in the hands of twenty-four holders or sets of holders. The original articles of the company, clauses 7 and 8, provided for the appointment of named persons, as secretaries and treasurers at an allowance of 5 per cent, on nett profits, and as agents in charge of the factories at a like allowance. Between 1905 and 1909 K. Venkata Rao, of whom much will be heard in the sequel—it is around him that the whole controversy has raged—had become one of the two agents. In 1909 and 1910 the original offices of secretary and treasurer and agent were abolished, and by special resolutions of the company, passed and confirmed unanimously on May 7 and 28, 1910, clauses 7 and 8 of the companys articles of association were cancelled, and it was resolved that, in lieu thereof, the firm of K. U. S. Ramachander & Co. should be appointed treasurers of the company on condition of their retaining the companys moneys without interest, and lending moneys to the company without interest whenever required. In view of the allegations of the petition with reference to this arrangement—operative, as it was, for so many years— it is convenient to note, in passing, the deliberation with which it was made—the special resolution of May superseding with a technical amendment an earlier special resolution adopted with similar unanimity in April, 1910. It is material also to note that under the arrangement the firm was called upon to discharge the duties which had theretofore devolved upon the secretary, treasurer and agent combined, and that in any advantage that might accrue to it from the fact that, like a banker, it was not required to pay interest on the companys balances, was to be found the only counterpart for the 10 per cent, on profits which, under the superseded arrangement, had to be found by the company. The firm K. U. S. Ramachander & Co. was the family firm of Venkata Rao. From 1910 and earlier he had been at its head. In 1922 he was seventy-three years of age. The firm K. U. S. Ramachander & Co. was the family firm of Venkata Rao. From 1910 and earlier he had been at its head. In 1922 he was seventy-three years of age. It is impossible to read the record without seeing that, even at a later date, he remained a man of outstanding ability and strong personality. From 1910 his was undoubtedly the predominant influence in the firm, although he was only one of nine members, as also in the directorate of the company, although the evidence is clear to show that no duly qualified shareholder who desired a seat on the Board was ever excluded therefrom. His influence, real, and, for anything that appears, thoroughly well deserved, was not, at all events, unwelcome. Everything points to the conclusion that the shareholders, for benefits resulting to them therefrom, were well content to leave the management of the companys affairs in Venkata Raos hands. At all relevant times a large number of shares in the company stood registered in his own name, and in the names of his firm and of different individual members of his family, some of them members of the firm. But the number which at any time he really controlled is left in complete uncertainty. His own personal holding was never large. He complains in his evidence that members of his family had 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 201 become, prior to the date of the petition, at variance with him. The petitioners have put in the minutes of a meeting of June 23, 1917, at which K. Ramachander, his eldest son, is found voting against him in favour of a larger dividend. Indeed, their Lordships can find nothing in the record to show that if at any time any disagreement with Venkata Raos action or policy had existed amongst the shareholders, it would not have found effective expression as for the moment at all events, it did at the meeting of August 21, 1921, to which reference will presently be made. The proceedings of the shareholders up to that date do not indicate that as the petition suggests they were there merely to register Venkata Raos decrees. They do show that up to 1921 there was never any serious disagreement amongst them. The proceedings of the shareholders up to that date do not indicate that as the petition suggests they were there merely to register Venkata Raos decrees. They do show that up to 1921 there was never any serious disagreement amongst them. The first trace of conflict originates with a resolution proposed by Venkata Rao as an extraordinary resolution at a general meeting of the company held on August 6 of that year. The resolution, in effect, was that in view of the complete abandonment of the Hospet venture and of difficulties resulting from its British Indian incorporation, the registration of the company should be transferred to Hyderabad. The proposal, as might, perhaps, have been expected from what has been already said, was accepted unanimously at that meeting. But Subhapati Rao, a shareholder, a vakil of thirty years of age, who now becomes as prominent in the drama as Venkata Rao himself, although the holder of a single share only, and with, therefore, it might perhaps have been supposed, no very extensive interest in dividends, detected in the resolution, or thought or said that he detected, a subtle device on the part of Venkata Rao to make the recovery of dividends more difficult. Accordingly, at the meeting held on August 27, 1921, to confirm the resolution, he proposed an amendment to the effect that the company should be wound up voluntarily. And his amendment was carried by a bare majority of the members present, and Venkata Raos original resolution was therefore lost, although the amendment was not, of course, affirmatively effective. From this incident must be dated the movement, such as it was, headed by Subhapati Rao, culminating in the petition and ultimately in the winding up order which is now under review. The petition, as has been said, was presented on May 1, 1922. There were six petitioners. Subhapati Rao is one ; his brother, Lakshmikanta Rao, holding two shares, is another ; a third has since died ; and a fourth, Sidabasappa, sold his twenty-one shares in the company on November 2, 1924, before the winding up order was made. The whole six petitioners between them held no more than thirty-two shares out of the total of 200. Only one other shareholder, the respondent Madam Venkayya, supported them. The company, in its opposition to the petition, represented the views of a preponderant majority. It was amply solvent. The whole six petitioners between them held no more than thirty-two shares out of the total of 200. Only one other shareholder, the respondent Madam Venkayya, supported them. The company, in its opposition to the petition, represented the views of a preponderant majority. It was amply solvent. Creditors were in no way interested, if they existed at all. The petition is an attack upon Venkata Rao from every angle. That that attack was inspired throughout by Subhapati Rao has never been questioned, while Venkata Rao has reiterated in evidence that it is from some unexplained enmity to himself on the part of Subhapati Rao and from that alone that everything has resulted—the winding up petition, the appeal from the order dismissing it, and the whole course of the supervening liquidation so marked in its hostility to himself. Their Lordships are not prepared to treat these assertions lightly. They have never been contradicted by Subhapati Rao, although he has given evidence on two occasions and has made many affidavits in the course of the liquidation. No petitioner, except himself, has ever taken any part in the proceedings. The petition, for the terms of which Subhapati Rao is clearly, primarily, and not improbably exclusively responsible, is inexcusable in the recklessness and misleading character of its most serious allegations, and their Lordships have been compelled to note that throughout the recorded proceedings in the subsequent liquidation the activities of Subhapati Rao have been exclusive, constant, persistent and officious, not to be explained by his insignificant material interest in the liquidation or its results. It is necessary to approach the consideration of the case with these most disturbing facts in 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 202 mind. The learned trial judge was able to dismiss the petition on what may be called its own demerits. Their Lordships will anticipate so far as to say that it is almost inconceivable that the High Court could have wound up the company as and when it did or have justified its order by the reasons assigned had these matters been even remotely present to the minds of the learned judges there. Their Lordships will anticipate so far as to say that it is almost inconceivable that the High Court could have wound up the company as and when it did or have justified its order by the reasons assigned had these matters been even remotely present to the minds of the learned judges there. [Their Lordships judgment pointed out inconsistencies appearing in the petition, and upon an examination of the evidence agreed with the view of the trial judge that the charges against Venkata Rao contained in the petition were not established. The judgment continued as follows —] In the result the learned judge, as has been already noted, found that the charges made by the petition had not been proved in any particular. It had been conceded, he said, that unless the case could be brought within cl. 6 of s. 162 of the Indian Companies Act no order could be made no misconduct had been proved against Venkata Rao or the other directors. The fact that Venkata Rao had a preponderating voice in the company by reason of his owning or con trolling a large number of shares was of itself no reason for winding up the company; the allegation that dividends had not been paid regularly was no ground for winding up, but the trouble had only arisen in transmission cases. The petitioners had had inspection of all the accounts, and in no instance had these been shown to be wrong. As regarded the sum proposed to be spent on machinery, it was hardly likely that Venkata Rao, with his preponderating interest, would ruin the company for the pleasure of annoying the other shareholders. Their Lordships subscribe to that judgment. The order dismissing the petition with costs was in their judgment, on the evidence before the Court, the only possible order. They think it both fair and right to add that on a careful considera tion of all the evidence they can find no justification worthy of the name for the suggestion that during Venkata Raos long tenure of office his management of the companys affairs had in view any other object than the welfare of the company in which as a shareholder he was, directly and indirectly, so largely interested. Nor have they in the evidence found any proof that moneys retained by the firm were normally in excess of reasonably possible prospective needs, or that there was any impropriety on the part of the treasurers in retaining the moneys they did retain or on the part of the directors in recommending their retention. The balances were, in fact, the working capital of the company, even although some portion of them might without illegality or even inconvenience have been distributed as dividend had the shareholders so insisted. The petitioners appealed to the High Court by notice dated November 17, 1922. For some unexplained reason the appeal was not disposed of until November 13, 1924— nearly two years later. There were no new materials placed before the Appellate Court to account for this loss of time, which would not have been possible in England, where winding up appeals are placed in an interlocutory list in order to be beyond any such risk. Their Lordships hope that this case is, in this, as in so many other respects, exceptional. But this delay ought to have weighed with the learned judges in reaching a decision. The difficulties created by a winding up order in November, 1924, with effect from May 22, 1922, which so soon became manifest in the liquidation, might have given them pause. It does not appear that these difficulties were even present to their minds. Nor is it easy either to discover or to state the actual reasons of the appellate judges for making a winding up order when they did or at all. They were apparently led to do so partly by the case of Loch v. John Blackwood, Ld. ([ 1924] A. C. 783.), which, as they noted, had not been available for the trial judges consideration, but which, so far as their Lordships can see, bears no resemblance either in principle or detail to the facts as proved in this case. For the rest, while the learned judges do not in terms reject the trial judges findings of fact, they ignore them altogether. They seem to treat allegations in the petition as true merely because they are placed there. They find neither in its contradictions nor in its charges any room even for criticism. This omission in relation to the 98 Law Rep. 58 Ind. App. They seem to treat allegations in the petition as true merely because they are placed there. They find neither in its contradictions nor in its charges any room even for criticism. This omission in relation to the 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 203 alleged threats by Venkata Rao to call up the unpaid share capital of the company is particularly unfortunate. The learned judges appear, without examina tion, to accept these charges as proved, while from their statement of the first of them, it is apparent that the nature of the charge made was quite misunderstood. Perhaps their conclusions on the whole matter may, however, best be taken from their own closing words " It is evident that the affairs of this company are carried on in such a way that the members of one family are able to exercise a predominating influence over the management of the company and to secure certain benefits for themselves. The minority are unable to protest effectively against the actions of the directors because the majority of shares are in the hands of one family, and the directors themselves are able to hold over the shareholders the fear of having to pay up the unpaid portion of their shares. This causes a lack of confidence in the management of the directors which there is no hope of improving so long as the present directorate continues and the funds are in the hands of the present treasurers. Under these circumstances, we think the only course we can take to secure the just rights of the shareholders is to direct the winding up of the company." Venkata Rao has sworn, and it has not been denied, that before the appeal was heard, two of the petitioners had notified to him their actual, although apparently not their formal, withdrawal from the proceedings. One had died; a fourth, Sidabasappa, as has been stated, had, before this judgment of the High Court, sold his shares. In active support of the petition, therefore, if Venkata Rao has sworn truly, there remained, at the date of the winding up order, only Subhapati Rao and his brother, holding three shares between them, and Madam Venkayya, who had never even verified its allegations. In active support of the petition, therefore, if Venkata Rao has sworn truly, there remained, at the date of the winding up order, only Subhapati Rao and his brother, holding three shares between them, and Madam Venkayya, who had never even verified its allegations. A striking comment on the observations of the High Court when read in the light of the history already set forth. But, presumably, these petitioning casualties were not—at least, all of them—known to the learned judges, and Venkatas statement of them may have been exaggerated. Even so, the conclusions of the Appellate Court cannot, in their Lordships judgment be supported. Their own examination of the petition leads them, on the evidence, to the inevitable conclusion that its allegations, so far as these were offensive, were entirely unproved. Its proper fate was the dismissal which it met with at the hand of the trial judge. The winding up order on the materials before the High Court ought not to have been made. So far the present appeal is entirely justified. But many further considerations emerging in subsequent events have to be weighed before it can be properly disposed of. To the statement and consideration of these their Lordships now proceed. At the instance of the directors, immediate steps were taken to have the order set aside. An application for leave to use the companys name as appellat was first made. This was strenuously opposed by Subhapati Rao, who, in an affidavit, challenged Venkata Rao to ascertain the contributories views on the subject. At a meeting, in answer, held on April 2, 1925, 16 contributories holding 168 shares out of 200 declared themselves for an appeal in the companys name or, if that were not possible, for one in their own. This was strenuously opposed by Subhapati Rao, who, in an affidavit, challenged Venkata Rao to ascertain the contributories views on the subject. At a meeting, in answer, held on April 2, 1925, 16 contributories holding 168 shares out of 200 declared themselves for an appeal in the companys name or, if that were not possible, for one in their own. Notwithstanding this declaration of their wishes (see s. 174 of the Act), the learned judge in charge of the liquidation on November 19, 1925, refused the leave asked for, on the ground that Venkata Rao was then in default under an order made against him in the liquidation, and, on appeal to the Court, this refusal was, on December 18, 1925, upheld on the expressed ground, the basis of which their Lordships are quite unable even to conjecture, that there was no reason to suppose that those who purported to be the company in the application " represented the wishes of the majority of the shareholders." This new misunderstanding of the position at another critical moment in the history is responsible for the further misfortune that an appeal against a winding up order, so unusual in its occasion and circumstances, only became possible through the special leave granted by 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 204 His Majesty on the recommendation of this Board two years later, on December 2, 1926. Four further years elapsed before the appeal was brought to a hearing— the greater part of that long interval having been apparently consumed in the preparation and printing of the supplemental appendices included in the record at the instance of the official liquidator. The appeal, quite rightly, is in the companys name. The objection taken to its competence and long persisted in was quite unfounded. In that respect it is in accord with a well-established practice, devised to meet the necessities of just such a situation as here arose. But this is all mere form or style. The appeal is really that of the contributories who are behind it. They may be truly regarded as the appellants see In re Diamond Fuel Co. (( 1879) 13 Ch. D. 400, 405.) Of the respondents, the official liquidator alone has appeared to oppose. But this is all mere form or style. The appeal is really that of the contributories who are behind it. They may be truly regarded as the appellants see In re Diamond Fuel Co. (( 1879) 13 Ch. D. 400, 405.) Of the respondents, the official liquidator alone has appeared to oppose. He has taken it upon himself to contest the appellants case ab initio—the remaining respondents, with Madam Venkayya, their unpledged supporter, being all who remain of the original petitioners. They have kept themselves in the background throughout, doubtless by arrangement. The official liquidator in his printed case and at the bar has said for them all that they could have said for themselves. Moreover, he has had printed and included in the record 364 pages of the proceedings in the winding up, including a verbatim transcript of the depositions that have been taken in the course of it. What has really been attempted by this procedure is that the opposition to the appeal—the petitioners business—shall be conducted, even if it fails, at the charge of the assets of the company. Such unusual partisan activity on the part of an official liquidator in relation to such an appeal clearly called for some justification, and this was sought to be supplied by referring to an order of November 14, 1928, by the judge in winding up, which directed the liquidator to oppose the appeal and do all the above things. Their Lordships have noted that the order referred to is really an affirmative answer by the learned judge to questions asked by the liquidator on an ex parte summons, while the order made has been so liberally interpreted by the liquidator that in the second appendix he has had printed 124 pages of depositions, all taken after the date of the order and, save for a few lines here and there, entirely irrelevant, as their Lordships think, to any issue arising on the appeal. Their Lordships are gravely concerned that such an order should ever have been asked for. They are even more concerned that it should have been acted upon with so little discrimination. Their Lordships are gravely concerned that such an order should ever have been asked for. They are even more concerned that it should have been acted upon with so little discrimination. The order, in principle, was sought to be justified by the representation doubtless made by the official liquidator to the learned judge, and as a contention maintained before the Board, that in these appendices facts are disclosed which had they been known to the Court when the petition came before it would have made a winding up order inevitable. It is merely an aggravation of the position that, in their Lordships judgment, as will appear presently, no such facts are there disclosed. For, even if they had been, these were facts to be brought forward, if so advised, by the petitioner respondents at their own risk, and not by the liquidator at the charge of the assets. Their existence would have been no justification for his becoming partisan in a dispute between two sets of contributories concerning the propriety of an order from which his authority alone proceeded. His only duty on an appeal against such an order was from a position of complete impartiality, and in the interests of the whole body of his constituent contributories to be ready to inform the Board of any facts and circumstances in relation to the companys affairs about which he might be asked or which in his judgment the Board ought to know. In the present case the liquidators attitude is peculiarly invidious. It appears from the depositions that he was put forward by the petitioners for his office on the resignation of the official first appointed, and that his appointment was opposed by the Venkata Rao party for that very reason. He, too, was an " enemy." From him, therefore, on appointment an attitude of unqualified detachment was specially to be desiderated. His conception of detachment in relation to this appeal has been to ask for and to 98 Law Rep. 58 Ind. App. He, too, was an " enemy." From him, therefore, on appointment an attitude of unqualified detachment was specially to be desiderated. His conception of detachment in relation to this appeal has been to ask for and to 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 205 obtain ex parte and to interpret with an excess of liberality an order which has enabled him free of expense to the petitioners, in relief of their responsibilities, and already at a cost far in excess of any possible interest of theirs in assets, to fight their battle, with, as will be seen, no success and at what, except as to a trifling amount, must be the inordinate expense of their opponents. It is to be hoped that orders like that of November 14, 1928, will not in future be lightly made in the course of an Indian winding up. The only results of the order in the present instance have been excessive delay and utterly useless expenditure, both of which will, like the delay already referred to, be found to have been operative to the prejudice of the appellants, in absence of whom the order was made. It was upon these appendices and their contents that the real opposition to the appeal was based by the official liquidator. When examined, they strike their Lordships as being for the most part quite irrelevant to the conclusion which he asked the Board to draw from their perusal. [After dealing with the contents of the appendices the judgment continued as follows —] Accordingly, their Lordships have reached the conclusion that the proceedings in the liquidation, the details of which—at such great expense—the official liquidator has introduced into the appeal, do not in any way help the case he has sought to make. On the contrary, they operate further to imperil it. For what,, in their Lordships judgment, these proceedings do show is that, owing to the mistaken principles upon which the liquidation has been conducted, doubtful orders have been made in the past and that, unless the methods hitherto adopted are for the future discarded, nothing can result from the further progress of the liquidation but the dissipation of the companys entire assets in expenses. In other words, the liquidators appendices, properly appre ciated, point to the discharge of the winding up order being called for rather than to the continuance of the liquidation being beneficial. And the proper choice between these two alternatives becomes thus even more difficult. This statement requires some expansion. The outstanding fact in relation to this winding up which seems so far to have been entirely missed is that the contributories are alone interested in its results. The company had no creditors. From this it followed that the liquidation was peculiarly one in which the Court, as to all matters affecting the contributories as a class, would have regard to their wishes as proved by any sufficient evidence (Act of 1913, s. 174) and one, also, in which the official liquidator (s. 183, sub-s. 2), would lose no opportunity of summoning meetings of contributories for the purpose of ascertaining their wishes in respect of similar matters. Now, it is hardly too much to say that with consequences—serious in many other respects than excessive cost—these vital considerations have been consistently forgotten or ignored throughout the liquidation. [After pointing out two " typical examples " of the above, the judgment referred in detail to other orders made in the liquidation which " on the face of them, at all events, were so remarkable that it would not be very disconcerting to note their disappearance with the winding up order, on which they depend." The judgment continued —] Their Lordships have now detailed with much particularity the salient incidents in this long history. They have done so, laboriously they fear, but not finding it possible otherwise to make clear within the confines of a self-sufficient judgment the difficulty of the problem disclosed. What they find themselves faced with is a winding up order, made two years after its presentation upon a petition which ought never to have been presented, for, even if not merely vindictive and malicious, the petition was entirely without proved merits. They find also that the winding up order has in the liquidation been succeeded by a series of orders off-hand in form and on the face of them, at all events, made without full consideration of all relevant circumstances. They find also that the winding up order has in the liquidation been succeeded by a series of orders off-hand in form and on the face of them, at all events, made without full consideration of all relevant circumstances. Lastly, their Lordships find a liquidation in being which, if carried on as it has been begun, can, as they forecast it, end in nothing for the contributories but a call of all the unpaid capital to provide for payment of the costs and expenses. And for these disasters, one and all—with the exception only of the expense and trouble due to the recalcitrancy of Venkata Rao, the costs of which have already and rightly fallen upon him—the petitioners are mainly, if not 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 206 indeed entirely, responsible. There is, therefore, so far, and even at this distance of time, everything to be said for the discharge of the winding up order appealed against. But what would now be the consequences of discharging that order? The business of the company has ceased for years its undertaking has been broken up its reconstitution except under new auspices is now probably quite impracticable and the task of adjusting liability for the mischief which has resulted from the liquidation presents a prospect of far-reaching and ruinous litigation. Nor could these consequences be mitigated, nor could any bounds be set by their Lordships to the range and extent of future trouble if the winding up order were now to be set aside. A direction to that effect would, their Lordships cannot doubt, be a calamity to all concerned. They cannot give it. On the other hand, it seems to the Board by no means hopeless that if the liquidation be left operative, it may by a change of method be possible to avoid at least total disaster. Their Lordships are, of course, well aware that it is not for them to dictate the future course of the liquidation. That is a matter for the learned judge in winding up. The judicial discretion in such matters is, at all events in the first instance, with him alone, and he may not divest himself or be divested of full responsibility for its exercise. The observations accordingly which immediately follow are made merely for his assistance. That is a matter for the learned judge in winding up. The judicial discretion in such matters is, at all events in the first instance, with him alone, and he may not divest himself or be divested of full responsibility for its exercise. The observations accordingly which immediately follow are made merely for his assistance. They are in no way directory. It is enough that they will have his attentive consideration. In their Lordships view, then, it is essential, if complete disaster is to be avoided, that for the future this liquidation shall be conducted in a spirit of complete impartiality, as between different sets of contributories, and with due regard to the wishes of the contributories (s. 174). It will be for the learned judge to consider whether this end can be attained under the present liquidator, who has identified himself so completely and, so far, so unfortunately, with the petitioners in their unworthy conflict with the main body of contributories, or whether it will not be necessary to place in the position of liquidator a man of no less high standing than the present official liquidator, but who has not hitherto been associated professionally or otherwise with either set of contributories, and who would be advised by a vakil, equally dissociated from either side, whose appointment would be authorized under s. 181 of the Act. It will further deserve most careful consideration at the hand of the learned judge, whether in the future course of the liquidation, by whomsoever it is conducted, the audited accounts up to 1923 should not remain undisturbed for reasons similar to those which have led their Lordships to leave the winding up order in being, and whether the accounts of the company for 1924 should not be taken on the best available materials and audited in order that on these accounts, as so taken, the actual amounts with which the treasurers are to be charged may appear as accurately as is now possible. Particularly, however, will it be for the learned judge to determine if the liquidator should not be directed to consider, as a protection from all further litigation, whether the liquidation cannot be brought to an end by some scheme under which the whole remaining assets of the company would be taken over by the majority contributories on the terms of their providing for the authorized costs and expenses of the liquidation and a sum equivalent to the existing value of the shares in the company of the remaining contributories; and whether, failing that, the liquidator should not be directed in relation to the dividend declared on December 22, 1924, and notwithstanding the orders on that subject previously made, either to complete its distribution out of the assets in his hands or enforce repayment from each recipient of the dividend paid to him. In their Lordships judgment, the preferable course, if funds permit, is, with the sanction of the Court, to complete the distribution. All these observations, however, as their Lordships have explained, express their own views only. They form no part of the order following. The actual order now to be made should, their Lordships think, be as follows That the winding up order of November 13, 1924, although not justified when made, be, by reason of the lapse of time and intervening events, maintained except as to costs. As to these, the order will be discharged. 98 Law Rep. 58 Ind. App. 416 ( 1930- 1931) Ripon Press and Sugar Mill C ompany, Limited V. Gopal C hetti 207 Their Lordships will humbly advise His Majesty accordingly. As to costs, as the winding up is allowed to continue, the petitioners cannot be ordered to pay the companys costs either of the petition or of the appeal to the High Court, proper though such an order would be. But they must not have costs in either Court, and if these costs have been paid by the official liquidator they must be repaid. The official liquidator must pay out of the assets the costs of the company —that is, the majority contributories—of the petition, of the appeal to the High Court and of this appeal. There will be no costs of this appeal to the petitioner respondents or Madam Venkayya. The official liquidator must pay out of the assets the costs of the company —that is, the majority contributories—of the petition, of the appeal to the High Court and of this appeal. There will be no costs of this appeal to the petitioner respondents or Madam Venkayya. The registrar will tax the costs of this appeal of the official liquidator, who will have liberty to apply in the liquidation for payment out of the assets of these costs or of such part of them as the judge, in winding up, may, in view of this judgment, allow, the official liquidator having further liberty reserved to apply to the learned judge for payment otherwise than by the majority contributories of such of his taxed costs as may be disallowed out of assets. It will be the duty of the official liquidator when applying for his costs to bring this judgment of their Lordships to the notice of the learned judge.