This is an application under sections 153 and 153 _A of the Companies Act, praying that the scheme of arrangement proposing to merge petitioner No. 2 in petitioner No. 1 be confirmed. The prop~,3al had been made in a joint meeting of the directors of the two companies.
2. The registered office of petitioner No. 2, which is to merge in petitioner No. 1, is situate in the Province of Sind. It is thus the petitioner No. 2 which will lose its entity if the request of the petitioners is allowed and the order is acted upon. The petitioner No. 2, on the other hand, will in no gray be affected, as being a wholly holding company, it will only receive back its investment.
3. The first question arising for consideration, therefore, is whether it is the Sind High Court or `this Court which can entertain this petition. The contention of the learned counsel is that as section 153- A, added to the Companies Act, 1913, in 1936, on the pattern of section 154 of the English Companies Act, facilitated an action thereunder, it would defeat the very legislative intent, if it be considered a condition precedent that the registered offices, of the two companies to merge, must be situate within the jurisdiction of the same Court.
4. The precise argument is that as the purpose of law is to enable two companies to merge, any of the two Courts can exercise jurisdiction, if the registered offices of the two companies are located in two different Provinces. According to the learned counsel, it would be rather cumbersome, expensive and time consuming process if the two companies are first required to change their offices to one Province and apply for the objective, thereafter.
5. Reference is also made to section 2(3) of the Companies Act to say that the words `unless there is anything repugnant in the subject or context' in the definition of `Court' would show that any Court could entertain such an application as the law intended an easy procedure for the companies to merge. Reliance is also placed on Re: Travancore National and Quilon Bank AIR 1939 Mad, 318The facts of the case show that the applicant Bank bad its registered office in an Indian State outside the British India but its Central office of business was in British India i.e. Madras. It was, therefore, treated as a foreign company and its application under section 153 entertained.
6. The learned counsel also referred to the following from Prem's Civil Practice (Second Edn.), Vol. 11 "(1) High Court in India has jurisdiction to sanction a scheme of arrangement in respect of a company whose registered office is in Pakistan and which has complied with the requirements of section 277. In other words section 153 applies to such companies. 52 P L R 349.
(2) An application under section 153 in the High Court at Dacca in Pakistan in respect. Of a company having its registered office in India can be entertained at Dacca which has jurisdiction under section 153 to pass orders on the application. 54 C W N 201, 1949 Lah. 48."
Reliance was also placed on Indian Companies Act VII of 1913 & Traders Bank Ltd., In re : AIR 1949 Lah. 48, where an application under section 153 was entertained in respect of an unregistered company having its registered office in India, in view of section 276 of the Companies Act. It was, however, observed that expression `any company liable to be wound up" in section 153 does not embrace every unregistered company unless an order for winding up for such a company is in the process of being made. The above cases, however, are not relevant as they pertain to unregistered/foreign companies and not companies registered in Pakistan. In any case, an Indian High Court in Easter Commercial Bank (1), did not approve that a company registered in India can be subject to the jurisdiction of Dacca High Court.
7. The Ujala Cotton Mills Ltd. Petitioner No. 2, whose registered office is situate in the Province of Sind is not a foreign company. The rule in the above cases, therefore, has no application to it. The petitioner No. 2 is governed by section 2(3) read with section 3. They read as under;-- "2.-(3) "the Court" means the Court having jurisdiction under this Act ;
3. Jurisdiction of the Courts.-(1) The Court having jurisdiction under this Act shall be the High Court .Having jurisdiction in the place at which the registered office of the Company is situate;;- Subsection 16) of section 153 makes it further clear that it is the company which is liable to be wound up. Now the petitioner No. 2 which will lose its entity in this merger is not within the jurisdiction of this Court and cannot be wound up by it.
8. According to Article 175 of the 1973 Constitution, there shall be a High Court for each Province and each Court shall have such jurisdiction as may be conferred on it by the Constitution or under any law. According to Article 14(3)(5) of the President's Order No. 1 of 1970, the jurisdiction of a High Court is exclusive in its territory: No order can, therefore, be passed by this Court, which may amount to its winding up, at the instance of any of the petitioners.
9. According to section 2(2), company means a company formed and registered under the Companies Act. The two petitioners are thus `companies', whereas the companies in the above cases were foreign companies to which Part IX of the Companies Act applied. As regards a company registered in one Province, the law never permitted it to seek recourse to a High Court of another Province. In Kekri Press Co. Ltd. (2), the Court held that Allahabad High Court had no jurisdiction to entertain application under section 12 of the Companies Act of 1913 made on behalf of a limited company, situate in Ajmer and Merwara, for the transfer of its registered offices, as the Chief Commissioner of Ajmer and Merwara was the High Court" for that purpose. In K. Raghbir Singh etc. v. Indian Mutual Provident Fund Insurance Co. Ltd. (3), the Court held that under the Companies Act the High Court is the Court which has the jurisdiction to wind up a company registered under it and having its registered office any where in the Punjab.
In view of the above, this application is not maintainable in this Court and is, therefore, dismissed in limine.
(1) (1949) 53 C W N 1(2) (1926) 24 A L J 768