Narayana Menon v. Thrikulasekharapuram Sree Krishna Vilasam Nair Samajam, Cranganore
1957-02-26
KUMARA PILLAI
body1957
DigiLaw.ai
Judgment :- 1. These two civil revision petitions relate to connected matters pertaining to the winding up of Thrikulasekharapuram Sree Krishna Vilasom Nair Samajam of Methala, a society registered under the Cochin Registration of Literary, Scientific and Charitable Societies Act, II of 1088. By a resolution passed by its general body the society went into voluntary liquidation, and while its affairs were being wound up by a special committee appointed for that purpose, disputes arose between the members of the society and so a reference was made to the District Court of Anjikaimal under S.14 of Act II of 1088, The reference was made in M. P. No.1 of 1954, and the prayer in that M. P. was that the winding up should be effected by the court and that the court should realise all the assets due to the society and pay its creditors and settle all its affairs. During the pendency of this petition the members of the special committee appointed for the winding up also filed another petition in Court, M. P. No 1648 of 1954, praying that a liquidator might be appointed for attending to the winding up work and that all the assets of the society might be realised and its debts discharged. In pursuance of these petitions the court appointed Mr. C. V. Narayana Iyer, Retired District Judge, as liquidator of the society, and on his appointment he applied for staying the execution of certain decrees obtained by the society's creditors against the society and for directing the members of the special committee to pay to him a sum of Rs. 9000 realised by them from the society's debtors, etc. These applications of Mr. Narayana Iyer were opposed by the judgment creditors as well as the members of the special committee. Their objections were two-fold, namely, (i) that as the amount had already been attached by some of the judgment creditors of the society it was not available for payment to the liquidator, and (ii) that the Court had no jurisdiction to appoint the liquidator and direct the members of the special committee to make the payment to him. Both these objections were overruled by the lower court and an application for review of the lower court's order was also dismissed by that Court.
Both these objections were overruled by the lower court and an application for review of the lower court's order was also dismissed by that Court. Thereupon these two civil revision petitions have been filed, C.R.P. No. 293 of 1955 by the members of the special committee, and C.R.P. No. 294 of, 1955 by some of the judgment creditors reiterating the same objections and contending that the lower court's order is wrong. 2. So far as C.R.P. No. 293 of 1955 is concerned, it has to be pointed out that the present contentions come with ill-grace from the revision petitioners for they: themselves had prayed in M. P. No. 1648 of 1954 for the appointment of a liquidator by the court for the society and for directions of the court to hand over to him the amounts realised by the special committee and for the collection of the balance assets by the liquidator and discharge of the society's debts Probably they expected that one of them would be appointed as liquidator by the lower court and made the application and when their hopes in that direction were frustrated and an independent person was appointed as liquidator they conveniently forgot the prayers they themselves had made in M P. No. 1648 of 1954 and advanced the contention that the court had no jurisdiction to appoint the liquidator and make the direction to the special committee to hand over to him the amount collected by them. 3.
3. S.14 of the Act II of 1088 reads as follows: "Any number not less than three-fifths of the members of any society may determine that it shall be dissolved, and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules of the said society applicable thereto, if any, and if not, then as the governing body shall find expedient, provided that, in the event of any dispute arising among the said governing body or the members of the society, the adjustments of its affairs shall be referred to the principal court of Original Civil jurisdiction of the District in which the chief building of the society is situate; and the court shall make such order in the matter as it shall deem requisite: Provided that no society shall be dissolved unless three-fifths of the members shall have expressed a wish for such dissolution, by their votes delivered in person, or by proxy, at a general meeting convened for the purpose: Provided that whenever the Government is a member of, or a contributor to, or otherwise interested in, any society registered under this Act such society shall not be dissolved without the consent of Government." On behalf of the revision petitioners in both C.R.Ps. it is contended that this section only allows the court to adjudicate upon disputes arising among the members of the society or its governing body during the course of the winding up proceedings and does not authorise the court to appoint a liquidator and give directions regarding matters arising in winding up proceedings. This contention is based on a misreading of S.14. What the section says is that, when disputes among the members of the society or the members of its governing body arise during the course of the winding up proceedings carried on in pursuance of the resolution for voluntary winding up, the adjustments of its affairs shall be referred to the District Court and that the court shall make such order in the matter as it deems requisite.
The words "in the matter" in the clause "and the court shall make such order in the matter as it shall deem requisite" refer plainly to the expression "adjustments of its affairs" in the earlier clause and not to the words "any dispute arising among the said governing body or the members of the society" occurring in the still earlier part of the section. When disputes arise what has to be referred to the District Court under S.14 is not those disputes but "the adjustments of the society's affairs". The expression "adjustments of its affairs" can mean only the winding up of the society. The appointment of the liquidator and the direction to the office bearers who are carrying on the voluntary winding up to band over the society's funds to the liquidator are only orders passed by the court in the matter of the adjustments of the society's affairs, i, e., its winding up, and are fully within the court's competence by virtue of the last clause in Para.1 of S.14. 4. The objection that on account of the attachments by the judgment creditors of the society the amount is not available for being handed over to the liquidator is also groundless. As per the attachments the amount has not yet been paid to the judgment creditors. The money is still with the special committee as funds belonging to the society, subject of course to all lawful claims enforceable under the attachments. When a society is being wound up by the court no decree can be executed against it without the sanction of the winding up court and it is for the winding up court to decide how payments in respect of decree debts for which attachments have already been placed should be made. 5. In the result the order of the court below is confirmed and both civil revision petitions are dismissed with costs. The costs of each civil revision petition shall be paid by the respective revision petitioners and not from the assets of the society. Dismissed.