dataset_name: IN-Abs

summary/full:
Punjab Land Reforms Act, 1972 included in the protec tive umbrella of the Ninth Schedule, subsequent to the decision of the High Court declaring certain provisions thereof as unconstitutional article 3lB being retrospective is entitled to the immunity conferred by it.
U.P. Imposition of Ceiling on Land Holdings Act (Act No. 1) 1971 as amended by Act No. 18 of 1973 and Act No. 2 of 1975, all included in the, Ninth Schedule The question, whether section 5(6) is violative of second proviso to clause (1) of article 31A of the Constitution cannot be assailed by reason immunity enacted in article 31B. The Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 which was enacted in implementation of the Direc tive Principles of State Policy contained in clauses (b) and (c) of article 39 of the Constitution imposed a maximum ceiling on the holding of agricultural land in the State of Maha rashtra and provided for the acquisition of land held in excess of the ceiling and for the distribution of such excess land to landless and other persons with a view to securing the distribution of agricultural land in a manner which would best observe the common good of the people.
Maharashtra Amendment Act 21 of 1975 effected radical amend ments in the principal Act by lowering the ceiling on agri cultural holding and created a concept of artificial family unit for fixing ceiling on holdings of agricultural land.
The person as defined in s.2(22) r/w. s.2(11) and his spouse and their minor daughters were clubbed together for the purpose of constituting a family unit as defined in the Explanation to s.4 sub section (1) and all lands held by each member of the family unit whether jointly or separately were aggregated together, and by a fiction of law deemed to be held by the family unit.
The appellant landlords in the State of Maharashtra preferred writ petitions in the High Court of Bombay chal lenging the constitutional validity of the Principal .Act, as amended on various grounds since the effect of the provi sions of the principal Act as amended by the three Maharash tra Acts, viz. 21 of 1975, 47 of 1975 and 2 of 1976 was to expropriate a part of the lands belonging to concept of family unit and fixed a ceiling 'on holding of land by such family unit, it was violative of the second proviso to clause (1) article 31A and was not saved by the immunising provision enacted in article 3lB.
The High Court dismissed them.
The main contention was that in so far as the Act created an artificial 791 the petition holding that article 3lB afforded complete immunity to the provisions of the principal Act.
In appeal by special leave to this Court, the appellant contended: (1) On a true construction of article 31B a post constitution enactment such as the Act is protected from invalidation only when it merely transgresses a restriction on legislative competence imposed by any provision of that Part and is therefore inconsistent with such provision.
The larger ground of validation curing generally any incon sistency with any provision of Part III is available only in case of pre constitution legislation.
(ii) The second proviso to clause (1) of article 37A does not confer any Funda mental Right but merely imposes a limitation,on the legisla tive competence of the legislature and, therefore, article 3lB does not exonerate the Act from its obligation to conform with the requirements of the second proviso to clause (1) of article 31.
(iii) To interpret the second proviso as conferring a Fundamental Right would convert the second proviso into a substantive provision and that would be contrary to the well recognised canon of construction that a proviso must be read so as to carve out from the main provision something which would otherwise fall with it and (iv) The Explanation to s.3 of the Constitution (Seven teenth Amendment) Act, 1964 shows that an acquisition made in contravention of the second proviso to clause (i) of Act.
31A is void and does not have the protection of article 3lB. even if the law under which such acquisition is made is included in the Ninth Schedule.
Dismissing the appeals, the Court, Held: Per Bhagwati J. (for himself and on behalf of Ray, C.J., Beg and Shinghal, JJ.) (1) The Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 as amended by Maharashtra Acts 21 of 1975, Maha rashtra Act 47 of 1975 and Maharashtra Act 2 of 1976 in so far as it creates an artificial concept of family unit and fixes a ceiling on holding of land by such family unit, does not conflict with the second proviso to clause (1) of article 31A. [810 E] (2) It would not be possible to say in the ease of an individual member of the family unit that when any land held by him under his personal cultivation is taken over by the State under the Act by reason of the land deemed to be held by the family unit being in excess of the ceiling limit applicable to the family unit, the acquisition is of any land "within the ceiling limit applicable to him" and hence in such a ease there would be no question of any violation of the provision enacted in the second proviso to clause (1) of article 31A in so far as the land held by him is concerned.
It may be that by reason of the creation of an artificial concept of a family unit, one or more members of the family unit may lose the land held by them, but that cannot be helped, because having regard to the social and economic realities of our rural life and with a view to nullifying transfers effected in favour of close relations for the purpose of avoiding the impact of ceiling legislation, a family unit has been taken by the State Legislature as a unit for the applicability of the limitation of ceiling area.
[809 H, 810 A B] (3) Even if the Act, in so far as it introduces an arti ficial concept of a family unit and fixes ceiling on holding of agricultural land by such family unit, is violative of the second proviso to clause (1) of article 31A it is protected by article 31B, by reason of its inclusion in the Ninth Schedule.
[808 F G] Hasmukhlal Dayabhai vs State of Gujarat ; followed.
(4) It is an elementary rule of construction that a statutory provision must always be interpreted in a manner which would suppress the mischief and advance the remedy and carry out the object and purpose of the legislation.
Our Constitution has a social purpose and an economic mission and every Article of the Constitution must, therefore.
be construed so as to advance the social purpose and fulfil the economic mission it seeks to accomplish.
[803 F G] (5) The aim and objective of article 3lB is to make the most comprehensive provision for saving agrarian reform legislation from invalidation on the ground of infraction of any provision in Part III and it must therefore be so inter preted as to have the necessary sweep and coverage.
An expansive interpretation must be placed on the language of article 31B so to carry out the object and purpose of enacting that Article.
[803 F H] 792 (6) Article 3lB is sufficiently wide to protect legisla tion not only where it takes away or abridges any of the rights conferred by any provisions of Part but also where it is inconsistent with any such provisions.
[803 H, 804 A] (7) The words "such Act, Regulation or provision is incon sistent with or takes away or abridges any of the rights conferred by any provision of this Part" in article 31B are clearly an echo of the language of clauses (1) and (2) of article 13 and they have obviously been employed because the enactments Specified in the Ninth Schedule may be pre con stitution as well as post constitution laws.
But, it would not be right to introduce an artificial dichotomy in article 3lB by correlating the first part of the expression namely, "is inconsistent with . any provisions of this Part" and confining its applicability to pre constitution legislation and correlating and confining the applicability of the other Part of the expression namely "takes away or abridges any of the rights conferred by; any provisions of this Part" to post constitution legislation.
Both the parts of the expression, on a plain natural construction of the language of article 3lB apply equally to post constitution legislation as well as pre constitution legislation.
[803 D F] (8) The Second Proviso to clause (1) of article 31A does confer a Fundamental Right.
The second proviso to article 31A confers a right higher than the one under clause (2) of article 31 on a person in respect of such portion of land under his personal cultivation as is within the ceiling limit applica ble to him and if the Act by creating an artificial concept of a family unit and fixing ceiling on holding of agricul tural lands by such family unit enables land within the ceiling limit to be acquired without payment of full market value, it would be taking away or abridging the right conferred by the second proviso, but it would be protected by article 31 B. [804.
B, 806 E] (9) The second proviso to clause (1) of article 31A is also couched in the negative language like clauses (1) and (2) of article 31 and it imposes a fetter on the exercise of the legislative power of the State by providing that the State shall not be entitled to make a law authorising acquisition of land held by a person under his personal cultivation within the ceiling limit applicable to him, unless the law provides for payment, of compensation at a rate not less than the market value.
This limitation on the legislative power of the State is the measure of the fundamental right conferred on the owner of the land.
It is by imposing limi tation on the exercise of legislative power that protection is given to the owner in respect of the land held by him under his personal cultivation within the ceiling limit.
[805 D E] State of Bihar vs Kameshwar Singh .@ 986; R.C. Cooper vs Union of India ; @ 569, reiter ated.
(10) Restriction on legislative competence and conferment of right on the holder of land within the ceiling limit are complementary to each other.
They are merely two different facets of the same provision.
What is limitation of legislative power from the point of view of the State is conferment of right from the point of view of holder of land within the ceiling limit.
The former secures the latter.
The second proviso in effect guarantees protection to the holder against acquisition of that portion of the land which is within the ceiling limit except on payment of the market value of such land.
The second proviso clearly con fers a right to property on a person holding land under his personal cultivation.
[805F G] (11) The Explanation to section 3 of the Constitution (Seventeenth Amendment) Act 1964 does no 'more than provide that so far as the Rajasthan Tenancy Act, 1955 is concerned, if any acquisition is made under it in contravention of the second proviso to clause (1) of . article 31A, it shall, to the extent of contravention be void.
Obviously this Explanation was rendered necessary, because otherwise, acquisition under the Rajasthan Act, 1955, even if in contravention of thee second proviso to clause (.1) of article 31A would have been valid under article 31B and that result the parliament did not wish to produce.
It was manifestly not the intention of Parliament that acquisition made under any enactment included in the Ninth Schedule should be void where if conflicts with the second proviso to clause (I) of article 31A and that article 3lB should not protect it from invalida tion.
[806 G, 807 F H] 793 (12) It is true that the orthodox function of 'an expla nation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it, but ultimately it is the intention of the legislature which is paramount and mere use of a label cannot control or deflect such intention.
[807 D E] (13) It is true that the proper function of a proviso is to except or qualify something enacted in the substantive clause, which, but for the proviso would be within that clause.
The question is one of interpretation of the proviso and there is no rule that the proviso must always be restricted to the ambit of the main enactment.
[805 H, 806A] Ishwarlal Thakarlal Almania vs Motabhai Nagjibhai [1966] 1 SCR 367 @373, followed.
C.A. 1040/76.
(14) The inclusion of the Punjab Land Reforms Act, 1972, in the Ninth Schedule as entry 78 by the Constitution.(Thirty Fourth Amendment) Act, 1974 subsequent to the decision of the High Court entitles it to the immuni ty conferred by article 3lB.
It does not suffer from any of the constitutional infirmities alleged in the writ petition.
[814 C E] Hasmukhlal vs State of Gujarat ; , applied.
C.A. 1307/76.
(15) Section 5, sub section (6)of the U.P. Imposition.of Ceiling on Land Holdings Act is valid and its constitutional validity cannot be assailed by reason of the immunity enact ed in article 3lB. Section 5(6), even if it contravenes second proviso to clause (1) of article 31A is validated under article 3lB by virtue of inclusion under the protective umbrel la of the Ninth Schedule.[812 C E] Per Krishna Iyer, J. (concurring) (1) The Maharashtra, the Punjab and the U.P. Acts are not unconstitutional taking the constructive view that article 31 B vis a vis agrarian reforms, is a larger testament of vision and values in action and a bridge between individual right and collective good.
[824 B C] (2) The purpose of article 31 B is conferment of total immunity from challenge on the score of violation of Part HI.
The words used are as comprehensive as English lan guage permits.
No land reform law shall be narrowed down by use of Part III, once included in the Ninth Schedule.
No matter what the grounds are, if they are traceable to Part III in whatever form, they fail in the presence of article 3lB.
No master of English legal diction could have used, so tersely, such protean words which in their potent totality bang, bar and bolt the door against every possible invalida tory sally based on Part III.
It is not correct to argue that the phraseology of article 3lB must be correlated to article 13 and read with a truncated connotation.
[817 H, 822 E F, G] (3) Every Fundamental Right, from the point of view of the individual, gives a right and from the stand point of the State is a restraint.
Whether the manner of expression used is in positive terms or negatively, whether the statu tory technique of a proviso, saving clause, exception or explanation, is used of ' 1 direct interdict is imposed, the substantive content is what matters.
Many of the Articles in Part III worded in a variety of ways, arm the affected individual with a right and pro tanto prohibit the legisla ture and the executive from enacting or acting contra.
[823 A B] (4) A great right is created in favour of owners to get compensation at not less than the market value if lands within the ceiling limit and in personal cultivation are acquired by the State.
This is a fundamental right and is a creature of the 2nd proviso to article 31 A(1).
An independ ent provision may occasionally incarnate as a humble provi so.
[823 F G] (5) It is absolutely plain that in the context setting and purpose of a provision even a proviso may function as an independent clause.
[823 G]


judgement:
Appeal No. 1888/68.
Appeal by Special Leave from the Judgment and Order dated 10 1 1968 of the Madhya Pradesh High Court (Indore Bench) in Civil Revision No. 76/67.
D.V. Patel and S.K. Gambhir for the Appellant.
V.P. Raman, Addl.
, Y.S. Chitale and D.N. Mishra for the Respondent.
The judgment of the Court was delivered by KAILASAM, J.
This .appeal is by special leave against the judgment and order of the High; Court of Madhya.
Pradesh, Bench at Indore revising the order of the Additional Dis trict Judge and holding that the appellant is liable to pay tax from April .1, 1954 and not from April 1, 1965 only as held by the District Judge.
The appellant is the owner of a factory at No. 1, Shivaji Nagar, Indore.
On January 8, 1954.
the rental of the factory was assessed at Rs.564 per month and the house tax payable at Rs.475/14/ with effect from April 1, 1951.
The dispute is whether tax is payable from April 1, 1954.
By an order dated March 20, 1956 the house tax was determined at Rs. 891/1/ per annum by the Municipal Corpo ration with effect from April 1, 1954.
Against the said assessment the appellant preferred an appeal before the Municipal Appeal Committee, Indore.
Appeal Committee allowed the appeal and remanded the case for deciding it on merits after giving a hearing to the appellant.
After re mand, the Municipal Corporation again inquired into the matter and determined the rental value at Rs.940/ per month and reduced the tax to Rs.793/2/ per year by an order dated 11th February 1957, as payable from April 1, 1954.
The appellant objected to the assessment and gave notice of objection under section 147(1) of the Madhya Pradesh Munici pal .Corporation Act, 1.956, but the objection was summarily rejected by the Municipal Commissioner.
The appellant preferred an appeal being Miscellaneous Appeal No. 41 of 1957 to the 1st Additional District Judge, Indore.
By an order dated March 10, 1960, the Additional District Judge 873 allowed the appeal and remanded the case for decision afresh after proper inquiry.
On remand, a notice dated February 11, 1963, was issued to the appellant under section 144(1) of the ' Madhya Pradesh Municipal Corporation Act, ' 1956, as amended by Act 13 of 1961 calling upon him to.
furnish the required information.
The COrporation also, issued another notice to the appellant on May 7, 1964, informing the appellant that the Junior Overseer had submitted a report that considerable changes have been effected in the factory and calling upon him to.
submit a detailed plan.
The appel lant replied asking for details.
Subsequently, the appel lant received a notice dated October 12, 1965, under section 146 of the Madhya Pradesh Municipal Corporation Act whereby he was informed that the annual valuation of the property was assessed at Rs.10,870.20 and Rs.764.18 was fixed as the annual property tax with effect from April 1, 1954.
He was also informed that if he had any objection he could file his objections under section 147(1) within 30 days from the receipt of the said notice.
The 'appellant filed his objections on November 11, 1965.
The Commissioner rejected the objections by his order dated May 26, 1966, and confirmed the valuation of the property and tax imposed by it on October 12, 1965.
The appellant was informed by the Corporation by its letter dated June 1, 1966, that ' the amount of Rs.764.18 as tax has been fixed with effect from April 1, 1954, on the basis of the valuation of the annual income of Rs.10,870.20.
Aggrieved by the order of the Commissioner the appellant filed Civil Miscellaneous Appeal No. 70 of 1966 before the 2nd Additional District Judge, Indore.
The learned Judge by his order dated December 21, 1966, partly allowed the appeal and held that the appellant would be liable to pay the property tax of Rs.764.18 with effect from April 1, 1965, only, and not from April 1, 1954.
The respondent Municipality then filed a Revision Petition before the High Court and the High Court by its order dated January 10, 1968, in Civil Revision No. 76 of 1967 allowed the Revision Petition and held that levy of the house tax at Rs.764.18 would be payable from April, 1, 1954 itself.
Against the order of the High Court the appellant filed a petition under Article 136 of the Constitution and on the grant of a special leave by this Court on August 23,1968, this appeal has come up before us for final hearing.
The learned counsel for the appellant raised two conten tions.
He submitted that as a fresh notice was issued under section 144 of the amended Act on October 12, 1965 no tax could be imposed with retrospective effect and the order of the High Court directing payment of tax from April 1, 1954, is against law.
It was next contended that the decision_ of the 2nd Additional District Judge is final and the High Court had no jurisdiction to interfere with it.
In any event it had exceeded its powers under section 115 of the Civil Procedure Code.
874 From the facts set out it will be apparent that the order fixing the tax at Rs.891/1/ per annum with effect from April 1, 1954 was made on March 20, 1956.
That order was challenged before various forums.
The Municipal Appeal Committee had first allowed an appeal preferred by the appellant and remanded the case to the Municipal Corporation.
After remand the Municipal Corporation re duced the tax to Rs.793/2/ by its order dated February 11, 1957.
But again the assessment was objected to under section 147(1) of the Madhya Pradesh Municipal Corporation Act.
The Municipal Commissioner dismissed the objections and thereupon there Was an appeal to.
the Additional District Judge who allowed the appeal and remanded the matter for fresh disposal on March 10, 1960.
After remand the Corpo ration reduced the tax further and fixed it at Rs.764.18 with effect from April 1, 1954 by its order dated October 12, 1965.
The appellant filed objections and the objections were rejected by the Commissioner by its order dated May 26, 1966.
Against the order fixing the tax at Rs. 764.18 the appellant filed an appeal to the 2nd Additional District Judge, Indore, who by his order dated December 21, 1966 held that the property tax has to be paid only from April 1, 1965 and not from April 1, 1954.
That order was challenged by the Municipality before the High Court which allowed the Civil Revision and held that the house tax at Rs. 764.18 is payable from April 1, 1954.
It will be thus seen that the proceeding related to the tax payable from April 1, 1954.
The point that is taken by the learned counsel is that after the remand by the learned District Judge by his order dated March 10, 1960, the proceedings started by the Municipality by its notice, dated October 12, 1965 were under section 146 of the Madhya Pradesh Municipal Corporation Act and as the new Act was not retrospective in its effect the tax is payable only from April 1, 1965.
This plea cannot be accepted as from the narration of the facts it can be seen that it was a continuous proceeding relating to the tax payable from April 1, 1954, and there is no substance in the plea that the notice amounted to notice of fresh assessment or re assessment.
Equally untenable is his plea that the notice given by the Municipality on October 12, 1965 cannot have the effect of levying tax for any period earlier than April, 1965.
The notice issued by the Municipal Corporation bearing No. 18000 dated February 11, 1963, runs as follows : "Under section 144(1) of the Madhya Pradesh Municipal Corporation Act, you are hereby informed the necessary particulars in the proforma given below, together with the detailed plan of the building of the abovemen tioned factory may please be furnished within 7 days from the receipt of this letter; for the purpose of assessment.
As the case has been remanded by the court, it is necessary to make assessment again.
" The notice itself specifically states that the assess ment was to be made again in pursuance of the order of remand.
The notice No. 10195 dated October 12, 1965 is under section 146 of the Municipal Act and it stated that on remand of the matter from the District Court 875 regarding the assessment of the property.
No.1, Shivaji Nagar, the annual tax has been assessed at Rs. 764.18 and called upon the appellant to file any objections if he has within 30 days from the receipt of the notice under section 147(1) of the Act.
The notice itself makes it clear that the Commissioner was proceeding to fix the value in pursu ance of the remand and called upon him to file his objec tions under section 147.
The plea of the learned counsel for the appellant is that the Commissioner is not authorised to determine the value and impose a tax for any period before the date of issue of the notice.
This contention ignores the fact that the valuation and determination of the tax from the year 1954 was pending and the proceedings related to.
that period.
Section 3 of the M.P. Municipal Corporation Act, of 1956, amongst other things provides under sub section (3) that "All rates, taxes and sums of money due to the Municipalities of such city when this Act is made applicable shall be deemed to be due to the Corporation," and under subsection (4) of section 3 "All suits or other Legal proceedings, civil or criminal, insti tuted by or against the Municipality of such city may be continued by or against the Corporation.
" The proceedings were originally taken under the Madhya Bharat Municipalities Act, 1954 and the proceedings regarding the levy of the house tax were not concluded when under the new Act the Corporation became entitled to pursue the proceedings.
We do not see any basis for the contention that under the new Act the Municipality had no power to pursue the proceedings regarding the levy of the tax for an earlier period.
We therefore reject the first contention as being without any substance.
The second contention is based on section 149 of the Madhya Pradesh Municipal Corporation Act, 1956.
It pro vides that any appeal shall lie from the decision of the Municipal Commissioner to the District Court, when any dispute arises as to the liability of any land or building to assessment.
Sub section (1) of section 149 provides that the decision of the District Court shall be final.
It was submitted that the decision of the District Court was therefore final and that the High Court was in error in entertaining a Revision Petition.
This plea cannot be accepted for, under section 115 of the Civil Procedure Code the High Court has got a power to.
revise the order passed by courts subordinate to it.
It cannot be disputed that the District Court is a subordinate court and is liable to the revisional jurisdiction of the High Court.
That leaves us with the last contention of the appellant that the High Court acted beyond its power as a court of revision.
This point will have to be summarily dismissed as the question of want of jurisdiction of the High Court was not raised before the High Court and therefore cannot be allowed to be raised in this Court for the first time.
The learned counsel for the appellant pleaded that the question involves total lack of powers of the High Court and this Court should hold that the order of the High Court is without jurisdiction.
This Court has laid down the principles governing interfer ence under section 115 of the Civil Procedure Code is Bal devdas Shivlal & Anr.
vs Filmistan Distributors (India) (P) Ltd. & Ors.,, (1) M/s. D.L.F. Housing and Construction Co. (P) Ltd. vs (1) ; 8 206SCI/77 876 Sarup singh and Ors.,(1) and The Managing Director (MIG) Hindustan Aeronautics Ltd. Balanagar Hyderabad and Anr.
vs Ajit Prasad Tarway, Manager (Purchase and Stores) Hindu stan Aeronautics Ltd. Balangar Hyderabad.(2) These cases have been referred to in the recent decision of this Court in The Municipal Corporation of Delhi vs Suresh Chandra Jaipuria and Anr. (3) and the attention of the learned Judges of the High Court was drawn to the law declared by this Court.
We consider it unnecessary to discuss the law on the subject over again as this appeal is liable to be dismissed on the ground that the point was not taken before the High Court and the discretion of this Court to interfere or not is beyond question.
In the result we find that there is no substance in this appeal and dismiss the same with costs.
P.B.R. Appeal dis missed.
(1) A.I.R. 1971 S.C. 2324.
(2) (3) A.I.R. 1976 S.C. 2621.

summary/full:
Under the Madhya Bharat Municipalities Act, 1954, the Municipal Corporation determined the house lax payable by the appellant in respect of his house with effect from April 1, 1954.
On appeal by the appellant regarding assessment, the Additional District Judge remanded the case to the Corporation for a fresh decision after due enquiry.
Ulti mately, by a notice dated October 12, 1965 issued under section 146 of the Madhya Pradesh Municipal Corporation Act, 1956 (as amended in 1961) the Corporation revised the amount of tax payable but maintained the date of liability for payment of tax as April 1, 1954.
On appeal by the appellant, the additional District Judge held that the tax was payable with effect from April 1, 1965 and not April 1, 1954 for the reason that the tax was finally fixed after the notice dated October 12, 1965.
The Revision Petition of the Corporation was allowed by the High Court holding that tax was payable from April 1, 1954 because the proceedings were started even before the 1956 Act came into force.
In appeal to this Court the appellant contended that (1 ) as the fresh notice was issued under section 146 of the 1956 Act on October 12, 1965 after remand of the case by the District Judge, house lax could be imposed only with effect from April 1, 1965 and not retrospectively and (2) the order of the District Judge being final under section 149(2) of the 1956 Act the High Court had no jurisdiction to interfere with that order and in any event the High Court exceeded its power under section 115, C.P.C. Dismissing the appeal.
HELD: The proceeding relating to the house tax was a continuous proceeding relating to the tax payable from April 1, 1954 and the notice issued by the Corporation after remand by the District Judge did not amount to notice of fresh assessment or re assessment.
[874 E F] 1.
There is no force in the contention .that under the 1956 Act the municipality had no power to pursue the pro ceedings regarding the levy of tax for an earlier period.
The notice issued by the Corporation to the appellant made it clear that the Commissioner was proceeding to fix the value in pursuance of the remand.
The appellant 's plea that the Commissioner was not authorised to determine the value and impose the tax for any period before the date of issue of the notice ignores the fact that the valuation and deter mination of tax from 1954 was pending and the proceedings related to that period.
Section 3(3) of the 1956 Act pro vides that all rates, taxes and sums of money due to the Municipalities when this Act was made applicable shall be deemed to be due to the Corporation and sub section
(4.) states that all suits and other legal proceedings instituted by or against a Municipality may be continued by or against the Corporation.
The proceedings in the instant case were originally taken under the Madhya Bharat Municipalities Act, 1954 and the proceedings regarding the levy of the house tax were not concluded when under the new Act the Corporation became entitled to pursue the proceedings.
[874F C, 875A D] 2.
(a) Under section 115, C.P.C. the High Court has power to revise the order passed by Courts subordinate to it.
The District Court being subordinate to 872 the High Court, is liable to the revisional jurisdiction of the High Court.
Moreover, the question of want of jurisdic tion of the High Court was not raised before that Court and cannot be allowed to be raised in this Court for the first time.
[875 F G] (b) The principles governing interference by the High Court trader section 115, C.I.C. have been laid down by this Court in a catena of decisions, the last of which is The Municipal Corporation of Delhi vs Suresh Chandra Jaipuria & Anr.
(A.I.R. [875H, 876A B] Baldevdas Shivlal & Anr.
vs Filmistan Distributors (India) (P) Ltd. & Ors. ; , M/s. D.L.F. Housing and Construction Co. (P) Ltd. vs Sarup Singh and Ors.
A.I.R. 1971 S.C. 2324, The Managing, Director (MIG) Hindustan Aeronautics Ltd. Balanagar, Hyderabad and Ant.
vs Ajit Prasad Tarway, Manager (Purchase and Stores) Hindu stan Aeronautics Ltd. Balanagar, Hyderabad, A.I.R. 1973 S.C. 76 and The Municipal Corporation of Delhi vs Suresh Chan dra Jaipuria and Anr.
A.I.R. 1976 S.C. 2621 referred to.


judgement:
Appeal No. 527 of 1976.
Appeal by Special Leave from the Judgment and Order dated the 26 3 1976 of the Allahabad High Court in Civil Misc.
Writ No. 6277 of 1974.
866 L.N. Sinha, Sol.
General, S.C. Agarwala and V.J. Francis for the Appellant.
Yogeshwar Prasad and (Miss) Rani Arora for Respondent No. 1.
O.P. Rana for Respondent No. 2.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court dated March 26, 1976.
It relates to the validity of the imposition of octroi with effect from July 15, 1950, on certain goods brought within the Maunath Bhanjan Municipality, hereinaf ter referred to as the Board.
The challenge to the imposition was made by the Swa deshi Cotton Mills Company Ltd., hereinafter referred to, as the Company.
The Company started constructing a textile factory, a part of which, at any rate, fell within the area of the Board.
It applied for and obtained exemption from the levy of octroi on its building material on the ground that it was a new concern.
It however started bringing more articles within its premises, and the Octroi Superin tendent made a demand for a payment octroi on June 25, 1969.
The Company tried to avoid the levy on the basis of the order of exemption, but the Executive Officer of the Board repeated the demand on May 30, 1970 and June 16, 1970.
The Board also wrote to the State Government for permission to realise octroi from the Company.
The Government gave the permission to realise the tax.
The Company thereupon challenged the levy of the octroi in the High Court by a writ petition.
The High Court took the view that the initial imposition of the octroi was illegal, allowed the writ petition, and issued a mandamus directing the Board not to realise the tax.
The Board feels aggrieved and has come up in appeal to this Court.
It appears that the Company took four grounds for challenging the levy of octroi, but the High Court examined only the following ground, as it took the view that it was enough for the Company 's success in the petition, and did not examine the other grounds, "that the procedure prescribed for the imposition of taxes by municipal boards under sections 131 to 135 of the U.P. Municipalities Act, 1916, was not fol lowed by the Municipal Board.
" Counsel for the parties have accordingly confined their arguments to the finding of the High Court in favour of the Company on this ground.
As the ground on which the Company has succeeded is quite general and vague, we asked counsel for the parties to refer to.
the precise plea in that respect, in the writ petition.
They could however only invite our attention to3 ground No. 6 of the writ petition where the Company has merely stated that the imposition of octroi was void and illegal "because mandatory provisions for imposition of octroi tax as provid ed in the U.P. Municipalities Act has not been followed.
" It is therefore obvious, and has not been disputed before us, that the 867 Company took a very vague ground to challenge the validity of the imposition of octroi, and left it to the High Court to embark on a roving and fishing inquiry, on the off chance of finding some violation of the so called "mandatory provi sions for the imposition of octroi.
" It has not been disput ed before us that the High Court undertook such an inquiry and struck down the imposition on the following ground, (1) The draft rules for the levy of the tax were not published, and only the rates of octroi were published, so that there was violation of the provisions of section 23 of the General Clauses Act and sections 134(1) and 300 of the Act.
(2) The order of the District Magistrate, which was equivalent to the special resolution of the Board under sub section (2) of section 134 was invalid as it was passed on June 20, 1950, while the rules were finalised and pub lished on July 15, 1950.
(3) There was no "foundation or basis" of the notification under section 135(2) and no such notification was published.
Counsel for the Company however strenuously argued that there was no compliance with the provisions of sections 131 to 133 also, and made a reference to the decisions in Munic ipal Board, Hapur vs Raghuvendra Kripal and others(1) and Raza Buland Sugar Co. Ltd. vs Municipal Board, Ratnpur(2), for the purpose of showing that parts of sections 131 to 134 were mandatory, and had to be followed.
We find that the High Court has.categorically stated that the Company did not assert that sub sections (2) and (3) of section 131 had not been complied with, and that there was "no dispute regarding compliance with the provisions of section 131.
" The High Court has also stated that the COmpany "has not asserted.
that any of the provisions of section 132 has not been followed.
" It has further stated that there was "no complaint of non compliance with the provisions of section 133 also.
" There was thus no challenge to the validity of the imposition of octroi on the, ground that there was no compliance with the provisions of sections 131, 132 and 133 and we are not called upon to examine the argument that there was non compliance with the provisions of those sec tions.
There was also no dispute in the High Court that "the Municipal Board was competent to impose octroi tax.
" We shall accordingly examine the three grounds, on which the High Court has held the imposition of octroi as invalid, in this background.
Ground No. 1.
The High Court has held that there was no previous publication of the draft rules for the levy of octroi and that only the rates of octroi were published.
So that there was breach of the provisions of sections 134(1)and 300 of the United (1) ; (2) ; 868 Provinces Municipalities Act, 1916, hereinafter referred to as the Act, and section 23 of the General Clauses Act.
It will be recalled that the High Court has found that the Company had not challenged the imposition of octroi on the ground that there was non compliance with the provisions of sections 131 to 133.
It cannot therefore be disputed that the draft rules were published as required by sub section(3) of section 131.
Moreover we find from the affidavit which has been filed on behalf of the Board that its Officer incharge wrote to the prescribed Authority on January 9, 1950, that the draft rules had been published in the "San sar" on November 1, 1949, and may be sanctioned.
A copy of that letter has been placed on the record.
It may also be mentioned that the Officer Incharge wrote to the Commission er intimating that only two objections had been received which were for reduction of the tax, and that after consid ering them the rate of the tax had been reduced from Rs.1/8/ to Re. 1/ per maund, and the necessary amendment had been made in the rate chart.
An objection was also received from the Shoe Makers ' Association, and the Commis sioner directed that if the Board wanted to make any modification, it may again publish the modified proposals.
This was done on February 14, 1950, but as only the rates had been reduced, and the rules had not been modified, it was not necessary to republish the draft rules.
The Pre scribed Authority accordingly sanctioned the same on April 1, 1950, under section 133.
The rules were forwarded to the Prescribed Authority on April 26, 1950, and were published in the State Gazette dated July 7, 1950.
It was stated in the notification that the rules were published under section 300 of the Act, which required their previ ous publication, but there can be no doubt that it was a notification under sub section (2) of section 135 as it was issued after receipt of the Board 's special resolution in pursuance of the sanction of the Prescribed Authority, and it was directed that the rules shall take effect from July 15, 1950.
It is therefore futile to contend that the rules were not made in accordance with the provisions of sections 134(1) and 300 of the Act and section 23 of the General Clauses Act which requires certain conditions to be ob served in regard to the making of rules after previous publication.
Ground No. 2.
It is not in dispute that the special resolution for the imposition of the tax was sent by the Officer Incharge of the Municipal Board on June 20, 1950, stating that July 15, 1950.
had been fixed for the levy of the tax.
It is true that the rules were published under the notification dated July 7, 1950, but that would not neces sarily lead to the conclusion that the resolution dated June 20, 1950, was rendered nugatory, or that it was necessary for the Board to pass another resolution.
The notification shows that the authority concerned not only published the resolution by its notification dated July 7, 1950, but also stated that they shall take effect from July 15, 1950, which was the date fixed by the resolution dated June 20, 1950, for the imposition of the tax.
There was therefore no justification for taking the view that the resolution dated June 20, 1950 could not authorise the= imposition of the tax from July 15, 1950, merely because it was passed before the publication of the rules.
At any rate any techni cal defect in the date of the resolution could not have 869 the effect of making the imposition void in the facts and circumstances of this case.
Ground No. 3.
As has been shown, the notification dated July 7, 1950, which was published under section 300 of the Act, was, in fact and substance, issued under the authori ty of sub section (2) of section 133, and it would not matter if it did not make a specific reference to that sub section and made a reference to section 300 instead.
The High Court therefore erred in thinking that there was no notification under sub section (2) of section 135 at all.
It is the nature of the notification which is decisive of the section under which it has been issued, and we have no doubt that the impugned notification was really issued under sub section (2) of section 135.
We have thus no doubt that the notification had really been issued in compliance with the requirement of sub sec tion (2) of section 135 of the Act.
That would attract the application of sub section (3) of that section which provides as follows, "135(3) A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accord ance with the provisions of this Act.
" So when a probative effect had been given by law making the notification of the imposition of the tax as "conclusive proof" that the tax had been imposed "in accordance with the provisions of the Act", no evidence could be allowed to combat that fact, and we have no hesitation in holding that the imposition was according to the law.
It is not disputed that Maunath Bhanjan is an industrial town, and its Board was collecting octroi since July 15, 1950.
The Company started the construction of its factory in 1968 69, and, as has been stated, it applied for and obtained exemption from the levy of octroi on its building material on the ground that it was a new concern.
The Board granted the exemption on July 21, 1967, for a period of 10 years, and that fact was acknowledged in the Company 's letter dated August 18, 1967.
The Company prayed for the continuance of the exemption even after that time limit.
The State Government however granted the exemption for five years.
The Company started "importing" certain other articles, and the State Government ultimately gave permis sion to the Board on April 2, 1973 to realise octroi from the Company with effect from May, 1974.
The Company once again applied for further exemption on August 14, 1973, but without success.
It is thus clear that, far from having any doubts about the validity of the imposition and levy of octroi, the.
Company accepted the validity thereof and prayed for exemption.
It availed of that exemption, for some years, and applied for its extension until as late as August 14, 1973.
It was only when further exemption was refused, that the Company thought of filing the writ peti tion.
As has been shown, the Company did not, even then venture to point out any reason why the imposition could be said to be invalid, and merely stated that the 870 "procedure" prescribed under sections 131 135 had not been followed.
That was far too vague a plea to justify investi gation and interference in the exercise of the extraordinary jurisdiction of the High Court under article 226 of the Constitution.
The appeal is allowed, the impugned judgment of the High Court dated March 26, 1976, is set aside, and the writ petition is dismissed with costs.
M.R. Appeal allowed.

summary/full:
In 1968 69 the respondent was constructing a textile factory within the area of the appellant Board, and obtained exemption from the levy of octroi on its incoming building material on the ground that it was a new concern.
It then started bringing more articles within its premises with the result that octroi was demanded from it.
The Board got permission from the State Government for realising the same.
In a writ petition by the respondent to challenge the levy, the High Court struck down the imposition of octroi on three grounds: I.
The provisions of Ss. 134(1) and 300 of the Act and section 23 of the General Clauses Act were violated owing to publication only of the tax rates and not the draft rules for the levy of octroi.
The resolution of the Board u/s 134(2) could not authorise the imposition of tax as it was passed before the publication of the rules.
No notification was published as required u/s 135 (2).
Allowing the appeal by special leave, the Court HELD: 1.
The draft rules were once published as required by sub section
(3) of section 131, and as only the rates had been reduced and the rules had not been modified, it was not necessary to re publish them.
[868 A F] Municipal Board, Hapur vs Raghuvendra Kripal & Ors. ; and Raza Butand Sugar Co. Ltd. vs Municipal Board, Ramput, ; , referred to.
The Resolution dated June 20, 1950, could authorise the imposition of the tax from July 15, 1950, although it was passed before the publication of the rules.
The resolu tion was not rendered nugatory and it was not necessary for the Board to pass another one.
[868 G H] 3.
It is the nature of the notification which is deci sive of the section under which it has been issued and it would not matter if it did not make a specific reference to sub section (2) of section 135 and made a reference to Section 300 instead.
[869 B]


judgement:
Appeal No. 312 of 1955.
On appeal by special leave from the judgment and order dated the 19th October 1955 of the Andhra High Court at Guntur in 0.
section Appeal No. I of 1955 1068 arising out of the Order dated the 26th day of September 1955 of the said High Court in its Ordinary Original Civil Jurisdiction in O.P. No. 3 of 1955.
M. section K. Sastri, for the appellant.
D. Narasaraju, Advocate General, Andhra (T. Anantha Babu and T. V. R. Tatachari with him), for respondent No. 1. D. Narasaraju, Advocate General, Andhra (A. Krishnaswami and K. B. Chowdhry, with him) for respondents Nos. 2 and 3. 1955.
December 16.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This appeal arises out of an application filed by the first respondent under section 162, clauses (v) and (vi) of the Indian Companies Act for an order that the Rajahmundry Electric Supply Corporation Ltd., be wound up.
The grounds on which the relief was claimed were that the affairs of the Company were being grossly mis managed, that large amounts were owing to the Government for charges for electric energy supplied by them, that the directors had misappropriated the funds of the Company, and that the directorate which had the majority in voting strength was "riding roughshod" over the rights of the shareholders.
In the alternative, it was prayed that action might be taken under section 153 C and appropriate orders passed to protect the rights of the shareholders.
The only effective opposition to the application came from the Chairman of the Company, Appanna Ranga Rao, who contested it on the ground that it was the Vice Chairman, Devata Ramamobanrao, who was responsible for the maladministration of the Company, that he had been removed from the directorate, and steps were being taken to call him to account, and that there was accordingly no ground either for passing an order under section 162, or for taking action under section 153 C.
The learned Judge of the Andhra High Court before whom the application came up for hearing, held that 1069 the charges set out therein had been substantially proved, and that it was a fit case for an order for winding up being made under section 162(vi).
He also held that under the circumstances action could be taken under section 153 C, and accordingly appointed two administrators for the management of the Company for a period of six months vesting in them all the powers of the directorate and authorising them to take the necessary steps for recovering the amounts due, paying the debts and for convening a meeting of the shareholders for the purpose of ascertaining their wishes whether the administration should continue, or whether a new Board of Directors should be constituted for the management of the Company.
Against this order, the Chairman, Appanna Ranga Rao, acting in the name of the Company preferred an appeal to a Bench of the Andhra High Court.
The learned Judges agreed with the trial Judge that the affairs of the Company, as they stood, justified action being taken under section 153 C, and dis missed the appeal.
Against this order, the Company has preferred this appeal by special leave.
On behalf of the appellant, it was firstly contended that the application in so far as it was laid under section 153 C was not maintainable, as there was no proof that the applicant bad obtained the consent of the requisite number of shareholders as provided in sub clause (3)(a)(i) to section 153 C.
That clause provides that a member is entitled to apply for relief only if he has obtained the consent in writing of not less than one hundred in number of the members of the company or not less than one tenth in number of the members, whichever is less.
The first respondent stated in his application that he bad obtained the consent of 80 shareholders, which was more than onetenth of the total number of members, and had thus satisfied the condition laid down in section 153 C, sub clause (3) (a) (i).
To this, an objection was taken in one of the written statements filed on behalf of the respondents that out of the 80 persons who had consented to the institution of the application, 13 were not share holders at all, and that two members 1070 had signed twice.
It was further alleged that 13 of the persons who had given their consent to the filing of the application had subsequently withdrawn their consent.
In the result, excluding these 28 members, it was pleaded, the number of persons who had consented would be reduced to 52, and therefore the condition laid down in section 153 C, sub clause (3) (a) (i) was not satisfied.
This point is not dealt with in the judgment of the trial court, and the argument before us is that as the objection went to the root of the matter and struck at the very maintainability of the application, evidence should have been taken on the matter and a finding, recorded thereon.
We do not find any substance in this contention.
Though the objection was raised in the written statement, the respondents did not press the same at the trial, and the question was never argued before the trial Judge.
The learned Judges before whom this contention was raised on appeal declined to entertain it, as it was not pressed in the trial court, and there are no grounds for permitting the appellant to raise it in this appeal.
Even otherwise, we are of opinion that this contention must, on the allegations in the statement, assuming them to be true, fail on the merits.
Excluding the names of the 13 persons who are stated to be not members and the two who are stated to have signed twice, the number of members who had given consent to the institution of the application was 65.
The number of members of the Company is stated to be 603.
If, therefore, 65 members consented to the application in writing, that would be sufficient to satisfy the condition laid down in section 153 C, subclause (3)(a) (i).
But it is argued that as 13 of the members who had consented to the filing of the application bad, subsequent to its presentation, withdrawn their consent, it thereafter ceased to satisfy the requirements of the statute, and was no longer maintainable.
We have no hesitation in rejecting this contention.
The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when 1071 presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation.
In our opinion, the withdrawal of consent by 13 of the members, even if true, cannot affect either the right of the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its own merits.
It was next contended that the allegations in the application were not sufficient to support a winding up order under section 162, and that therefore no action could be taken under section 153 C.
We agree with the appellant that before taking action under section 153 C, the court must be satisfied that circumstances exist on which an order for winding up could be made under section 162.
The true scope of section 153 C is that whereas prior to its enactment the court had no option but to pass an order for winding up when the conditions mentioned in section 162 were satisfied, it could now in exercise of the powers conferred by that section make an order for its management by the court with a view to its being ultimately salvaged.
Where, therefore, the facts proved do not make out a case for winding up under section 162, no order could be passed under section 153 C.
The question therefore to be determined is whether the facts found make out a case for passing a winding up order under section 162.
In his application the first respondent relied on section 162, clauses (v) and (vi) for an order for winding up.
Under section 162(v), such an order could be made if the company is unable to pay its debts.
It was.
alleged in the application that the arrears due to the Government on 25 6 1955 by way of charges for energy supplied by them amounted to Rs. 3,10,175 3 6.
But there was no evidence that the Company was unable to pay the amount and was commercially insolvent, and the learned trial Judge rightly held that section 162(v) was inapplicable.
But he was of the opinion that on the facts established it was just and equitable to make an order for winding up under section 162(vi), and that view has been affirmed by the learned Judges on appeal.
1072 It was argued for the appellant that the evidence only established that the Vice Chairman, Devata Ramamohan Rao, who had been ineffective management was guilty of misconduct, and that by itself was not a sufficient ground for making an order for winding up.
It was further argued that the words "just and equitable" in clause (vi) must be construed ejusdem generis with the matters mentioned in clauses (i) to (v), that mere misconduct of the directors was not a ground on which a winding up order could be made, and that it was a matter of internal management for which resort must be bad to the other remedies provided in the Act.
The decisions in In re Anglo Greek Steam Company(1) and In re Diamond Fuel Company(2) were relied on in support of this position.
In In re Anglo Greek Steam Company(1), it was held that the misconduct of the directors of a company was not a ground on which the court could order winding up under the just and equitable clause, unless it was established that by reason of such mismanagement the company bad become insolvent.
In In re Diamond Fuel Company(2), it was observed by Baggallay, L.J. that, ". mere misconduct or mismanagement on the part of the directors, even although it might be such as to justify a suit against them in respect of such misconduct or mismanagement, is not of itself sufficient to justify a winding up order".
The contention of the appellant is that as all the charges made in the application amounted only to misconduct on the part of the directors, and as there was no proof that the Company was unable to pay its debts, an order for winding up under section 162 could not be made.
The authorities relied on by the appellant reflect the view which was at one time held in England as to the true meaning and scope of the words "just and equitable" in the provisions corresponding to section 162(vi) of the Indian Act.
In Spackman 's Case(3), Lord Cottenham, L.C. construed them as ejusdem (1) [1866] L.R. 2 Eq.
(2) , 408.
(3) [1849) 1 M. & G. 170; ; , 1230.
1073 generis with the matters mentioned in the other clauses to the section, and that construction was followed in a number of cases.
Vide Re Suburban Hotel Co.(1), In re Anglo Greek Steam Company(2), Re European Life Assurance Society(3) and In re Diamond Fuel Company(4).
But a different view came to be adopted in later decisions (vide In re Amalgamated Syndicate(5)), and the question must now be taken to be settled by the pronouncement of the Judicial Committee in Loch vs John Blackwood Ld.(6), where after an elaborate review of the authorities, Lord Shaw observed that, ". . it is in accordance with the laws of England, of Scotland and of Ireland that the ejusdem generis doctrine (as supposed to have been laid by Lord Cottenham) does not operate so as to confine the cases of winding up to those strictly analogous to the instances of the first five sub sections of section 129 of the British Act '.
The law is thus stated in Halsbury 's Laws of England, Third Edition, Volume 6, page 534, para 1035: "The words 'just and equitable ' in the enactment specifying the grounds for winding up by the court are not to be read as being ejusdem generis with the preceding words of the enactment".
When once it is held that the words "just and equitable" are not to be construed ejusdem generis, then whether mismanagement of directors is a ground for a winding up order under section 162(vi) becomes a question to be decided on the facts of each case.
Where nothing more is established than that the directors have misappropriated the funds of the Company, an order for winding up would not be just or equitable, because if it is a sound concern, such an order must operate harshly on the rights of the share holders.
But if, in addition to such misconduct, circumstances exist which render it desirable in the interests of the shareholders that the Company should be wound up, there is nothing in section 162(vi) (1) (3) (5) (2) [1866] L.R. 2 Eq.
(4) , 408.
(6) ; , 790.
1074 which bars the jurisdiction of the court to make such an order.
Loch vs
John Blackwood.(1)was itself a case in which the order for winding up was asked for on the ground of mismanagement by the directors, and the law was thus stated at page 788: "It is undoubtedly true that at the foundation of applications 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.
Further more the lack of confidence must spring not from dissatisfaction at being outvoted on the business affairs or on what is called the domestic policy of the company.
On the other hand, wherever 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".
Now, the facts as found by the courts below are that the Vice Chairman grossly mismanaged the affairs of the Company, and had drawn considerable amounts for his personal purposes, that arrears due to the Government for supply of electric energy as on 25 6 1955 was Rs. 3,10,175 3 6, that large collections had to be made that the machinery was in a state of disrepair, that by reason of death and other causes the directorate had become greatly attenuated and "a powerful local junta was ruling the roost", and that the shareholders outside the group of the Chairman were apathetic and powerless to set matters right.
On these findings, the courts below had the power to direct the winding up of the Company under section 162(vi), and no grounds have been shown for our interfering with their order.
It was urged on behalf of the appellant that as the Vice Chairman who was responsible for the mismanagement had been removed, and the present (1) ; , 790.
1075 management was taking steps to set things right and to put an end to the matters complained of, there was no need to take action under section 153 C.
But the findings of the courts below are that the Chairman himself either actively co operated with the ViceChairman in various acts of misconduct and maladministration or that he had, at any rate, on his own showing abdicated the entire management to him, and that as the affairs of the Company where in a state of confusion and embarrassment, it was necessary to take action under section 153 C.
We are of opinion that the learned Judges were justified on the above findings in passing the order which they did.
It was also contended that the appointment of administrators in supersession of the directorate and vesting power in them to manage the Company was an interference with its internal management.
It is no doubt the law that courts will not, in general, intervene at the instance of shareholders in matters of internal administration, and will not interfere with the management of a company by its directors, so long as they are acting within the power conferred on them under the Articles of Association.
But this rule can by its very nature apply only when the company is a running concern, and it is sought to interfere with its affairs as a running concern.
But when an application is presented to wind up a company, its very object is to put an end to its existence, and for that purpose to terminate its management in accordance with the Articles of Association and to vest it in the court.
, In that situation, there is no scope for the rule that the court should not interfere in matters of internal management.
And where accordingly a case had been made out for an order for winding up under section 162, the appointment of administrators under section 153 C cannot be attacked on the ground that it is an interference with the internal management of the affairs of the Company.
If a Liquidator can be appointed to manage the affairs of a company when an order for winding up is made under section 162, administrators could also be 136 1076 appointed to manage its affairs, when action is taken under section 153 C.
This contention must accordingly be rejected.
In the result, the appeal fails and is dismissed with costs, of the first respondent.
The costs of the administrator will come out of the estate.

summary/full:
An application was filed by the first respondent under section 162 clauses (v) and (vi) of the Indian Companies Act for the winding up of the Company on the grounds, inter alia, that the affairs of the Company were being mismanaged and that the directors had misappropriated the funds of the Company.
In the alternative it was prayed that action might be taken under section 153 C and appropriate orders be passed to protect the interests of the shareholders.
The High Court held (i) that the charges set out in the application bad been substantially proved and that it was a fit case for an order for winding up being made under section 162(vi) and (ii) that under the circumstances action could be taken under section 153 C and accordingly it appointed two administrators with all the powers of directors to look after the affairs of the Company.
On appeal by special leave to the Supreme Court by the Company it was contended that the 1067 application under section 153 C was not maintainable inasmuch as there was no proof that the applicant had obtained the consent of requisite number of shareholders as provided in sub clause (3)(a)(i) to section 153 C, that clause providing that a member applying for relief must obtain the consent in writing of not less than one hundred members of the Company or not less than one tenth of the members of the Company whichever is less.
It was alleged that thirteen members who had given their consent to the filing of the application had subsequently withdrawn their consent.
Held that the validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation.
The withdrawal of consent by thirteen of the members, even if true, could not affect either the right of the applicant to proceed with the application or the juris diction of the court to dispose of it on its own merits.
Held further that before taking action under section 153 C the court must be satisfied that circumstances exist on which an order for winding up could be made under section 162 and where therefore the facts proved do not make out a case for winding up under section 162, no order can be passed under section 153 C.
The words "just and equitable" in section 162(vi) are not to be construed ejusdem generis with the matters mentioned in clauses (i) to (v) of the section.
If there is merely a misconduct of the directors in misappropriating the funds of the Company an order for winding up would not be just and equitable but if in addition to such misconduct, circumstances exist which render it desirable in the interests of the shareholders that the Company should be wound up, section 162(vi) would be no bar to the jurisdiction of the court to make such an order.
The order for winding up was just and equitable in the cir cumstances of the present case.
In re Anglo Greek Steam Company ([1866] L.R. 2 Eq. 1), In re Diamond Fuel Company ([1879] , Spackman 's Case ([1849] 1 M. & G. 170), Be Suburban Hotel Company ([1867] , Be European Life Assurance Society ([1869] I,.
R. , In re Amalgamated Syndicate ([1897] 2 Ch.
600) and Loch vs John Blackwood Ltd. ([1924] A. C. 783, 790), referred to.