MANU/OR/0104/1971Equivalent Citation: 37(1971)CLT1127, (1972)2CompLJ368(Ori)

IN THE HIGH COURT OF ORISSA

Company Act Case No. 1 of 1968
Decided On: 13.09.1971
Appellants: Registrar of Companies
Vs.
Respondent: Rowe & Pal and Ors.
Hon'ble Judges/Coram:
Bala Krushna Patra, J.
Counsels:
For Appellant/Petitioner/Plaintiff: N.K. Das, Adv.
For Respondents/Defendant: S.C. Roy and Y.S.N. Murty, Advs.
JUDGMENT
Bala Krushna Patra, J.
1 . The Berhampur Electric Supply Corporation Ltd. (opposite party No. 2) having its
registered office at Berhampur was incorporated as a public company limited by shares.
Opposite parties Nos. 3 to 8 are the directors of the company. By a special resolution
passed on August 16, 1962, the company was put to members' voluntary winding-up
and Shri Y. Chalapati Rau, opposite party-No. 3 and one of the directors of the
company, was appointed as voluntary liquidator. He subsequently resigned and the
resignation was accepted by another resolution, dated November 16, 1964, and M/s.
Rowe and Pal, a firm of Chartered Accountants (opposite party No. 1), was appointed as
the liquidator. In the present application filed by the Registrar of Companies under
Section 515(3) of the Companies Act, 1956 (Act 1 of 1956) (hereinafter to be referred
to as " the Act "), it is contended that the appointment of M/s. Rowe and Pal as
liquidator of the company is illegal and is done in contravention of the provisions of
Section 502 read with Section 513 of the Act. It is, therefore, prayed that opposite party
No. 1 be removed under Section 515(2) of the Act and the official liquidator attached to
this court be appointed as liquidator of the company.
2 . C. Raghunatham, one of the two partners of the firm of Rowe and Pal, has filed a
counter affidavit stating that M/s. Rowe and Pal is a partnership firm and is not a body
corporate and that, consequently, the appointment of the firm as the liquidator has not
violated Section 502 read with Section 513 of the Act.
3 . Section 513 of the Act enjoins that a body corporate shall not be qualified for
appointment as liquidator of a company in a voluntary winding-up, and that any
appointment made in contravention thereof shall be void. The sole question, therefore,
for determination here is whether M/s. Rowe and Pal, Chartered Accountants, is a body
corporate. The expression " body corporate " is defined in Section 2(7) of the Act and
runs thus :
" (7) ' body corporate ' or ' corporation ' includes a company incorporated
outside India but does not include-

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 (a) a corporation sole ;
(b) a co-operative society registered under any law relating to co-
operative societies; and
(c) any other body corporate (not being a company as defined in this
Act) which the Central Government may, by notification in the official
Gazette, specify in this behalf."
4 . Corporations are divided into two classes, namely, (1) corporations aggregate, and
(2) corporations sole. We are not concerned in the present case with " corporations sole
".. A corporation aggregate has been defined as a collection of individuals united into
one body under a special denomination, having perpetual succession under an artificial
form, and vested by the policy of the law with the capacity of acting in several respects
as an individual, particularly of taking and granting property, of contracting obligations
and of suing and being sued, of enjoying privileges and immunities in common, and of
exercising a variety of political rights, more or less extensive, according to the design of
its institution, or the powers conferred upon it, either at the time of its creation or at
any subsequent period of its existence. (See Halsbury's Laws of England, 3rd edition,
volume 9, page 4).
5 . A firm of partnership is, on the other hand, a creature of contract its rights and
liabilities being dependent on the terms thereof as well as the relevant statutory
provisions governing partnerships. For certain purposes, as for instance, suing and
being sued in the name of the firm, the firm is recognised as an entity. But, as provided
by the law, a firm is but a convenient name to describe a collection of individuals who
enter upon a business or of other venture subject to the terms of agreement inter se.
One of the privileges of a partner is to represent the other partners and the firm and be
in a position to act for and on behalf of all the partners. The liability of the firm is joint
and several liability of its partners. It, therefore, follows that notwithstanding certain
privileges or attributes which may tend to show that the firm is an entity, the essence of
the concept is that it is but a convenient name or description of individuals entering into
a combination of joint nature. In fact, in the present case, C. Raghunatham one of the
partners of the firm " Rowe and Pal", has stated in his affidavit that, although the firm is
appointed as the liquidator, it is he who is actually looking after the liquidation
proceedings.
6 . No material has been placed before me on behalf of the Registrar of Companies to
show that M/s. Rowe and Pal have got the attributes of a corporation or a body
corporate. In paragraph 7 of the petition itself it is stated that M/s. Rowe and Pal is a
firm of chartered accountants, I have, therefore, no doubt in my mind that the firm
Rowe and Pal is not a body corporate incurring the disqualifications referred to in
Section 513 of the Act.
7 . In the result, this application fails and is dismissed, but, in the circumstances
without costs.

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