IN THE HIGH COURT OF KERALA 

Appearances : T. L. Anathasivan & Philip J. Vettichatu for the Appellants. 

K. Moni & S. Rames Babu for the Respondent. 

JUDGMENT 

MOHAMMED, J. 

1. This appeal is directed against the order of the learned Company Judge on general report No. 745 and report No. 45 in CP Nos. 26/88, 5/90 and 34/90. The appellants before us are two chartered accountants who are directly not parties to the above reports filed by the official liquidator. The main pleading advanced by them is that they are highly aggrieved by the order passed by the learned Judge in the above reports inasmuch as the chartered accountants are totally excluded from conducting the tax cases of the companies in liquidation. The company court observed that the prayer made by the official liquidator in the reports, referred to above, to entrust all the sales-tax matters to the advocates included in the panel and all other tax matters to the chartered accountants in the panel prepared by the official liquidator could not be allowed. Finally, the court directed the official liquidator to entrust all tax matters to the advocates on equitable basis. 

2. On behalf of the appellants it was contended that there was an existing panel of chartered accountants prepared earlier by the company court. In this context, the order passed by the then Company Judge on general report No. 539 filed by the official liquidator was referred to us. It was a report filed by the liquidator praying to include one more name in the panel of chartered accountants already prepared. On that report, the court ordered on 19th December, 1988 as thus : 

"Learned counsel for the liquidator submitted that Mr. V. I. Antony, Zachariah Associates, chartered accountants has requested that his firm also may be enlisted in the panel of auditors/chartered accountants to be framed. Under the circumstances the panel submitted by the liquidator is approved including the name of Mr. V. I. Antony, Zachariah Associates, chartered accountants. The liquidator may, if required, move for adding any further names to the panel." 

By virtue of the above order, there are five chartered accountants in the panel on the file of this court. They are : 

(1) Sri C. Krishnamoorthy, (2) Sri T. N. Radhakrishnan, (3) Sri R. Krishna Iyer, (4) K. P. Paulson and (5) Sri V. I. Antony 

3. The grievance of the above chartered accountants, as reflected from the submission made by the learned counsel appearing for them, is that no opportunity had been granted to them by the company court before passing the impugned order. The contention is that the impugned order at any rate would adversely affect the profession of chartered accountants in whose favour a panel had been prepared by the company court. In this context, it would be worthwhile to examine the circumstances under which the impugned order had been passed by the learned Judge. The official liquidator filed general report No. 745 seeking permission to engage the advocates in the panel in sales-tax matters and to engage the chartered accountants in the panel in income-tax matters and other matters in future. He also sought permission to engage a chartered accountant from the panel for the computation of the capital gain in respect of Malabar Polyols & Allied Products Ltd. (in liquidation). When the general report No. 745 came up for orders before the company court on 21st May, 1998, it was allowed in the usual course as being only a general report. Subsequently, when report No. 45 came up for consideration, it came to the notice of the court that there was already a panel of advocates prepared as directed and approved by this court to appear in tax cases and hence, the order dated 21st May, 1998 passed in general report No. 745 was reviewed and the official liquidator was directed to give notice of both reports to the advocates in the panel. Accordingly, notices were given to the advocates in the panel of advocates and they filed their objections. 

4. It came to the notice of the court that in the general report No. 698 filed by the official liquidator, this court directed the registry to prepare a panel of three advocates to appear in tax cases in respect of the companies in liquidation representing the official liquidator before the assessing authorities and appellate authorities. Accordingly, after inviting applications and after considering them, the then company court Judge by order dated 18th March, 1997 in general report No. 698 prepared a panel consisting three advocates and directed the official liquidator to entrust the tax cases of the companies in liquidation to those advocates on equitable basis. The learned Judge in the said order directed the registry to intimate the preparation of the panel to the advocates whose names are included in the panel. Whether the order passed by the learned Judge in general report No. 698 relates to the sales-tax case alone or all the tax cases including the sales-tax as well as income-tax is the question which appears to have come up before the learned Judge while considering the general report Nos. 745 and 45. The learned Judge, after considering the question, made the following observation : 

"Under the circumstances so long as the panel of advocates prepared by this court by order dated 18th March, 1997 is in force and the names of the advocates are not removed from the panel, the official liquidator is bound to entrust all tax matters to the advocates included in the panel on equitable basis as directed by this court irrespective of the fact whether they are income-tax or sale-tax matters." 

What is pointed out by the learned counsel for the chartered accountants is that the effect of the above direction issued by the company court was to nullify the efficacy of the panel containing the names of the chartered accountants prepared by the company court on 19th December, 1988. In other words, the chartered accountants are totally excluded from the field of conducting the cases on behalf of the companies in liquidation. Therefore, on behalf of the chartered accountants it was prayed that necessary modification may be made in the impugned order so as to allow them also to conduct the cases of the companies in liquidation. 

5. The learned counsel appearing for the panel of advocates has raised three objections against the claim made by the chartered accountants. Firstly, it was contended that no leave had been obtained by the appellants before filing the MFA. In this context, section 483 of the Companies Act,1956 (hereinafter 'the Act') is brought to our notice. It reads thus : 

"Appeal from orders. - Appeal from any order made, or decision given, in the matter of the winding up of a company by the court shall lie to the same court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the court in cases within its ordinary jurisdiction." 

What is contained in section 483 is a provision conferring a right of appeal against an order made or decision given by the company court in the matter of winding up of a company. It does not say who are the persons entitled to file the appeals; nor does it say the requirements to be fulfilled for entertaining the appeal. In other words, it is a general provision enabling persons to file appeals. The right of appeal, no doubt is a substantive right. The words 'in the same manner in which, and subject to the same conditions under which' are only procedural and can in no way abrogate or diminish the power of appeal to the same High Court. The obtaining of leave is a procedural requirement and, therefore, the absence of leave does not totally obliterate the substantive right of appeal. In such situation, the question which is most relevant is whether the persons seeking to file that appeal are 'aggrieved persons' by reason of the impugned order. Though the appellants are the most affected parties, they are not made parties to the proceeding before the company court. In fact the official liquidator filed report No. 45 seeking permission to engage the services of the appellant No. 1 to prepare the capital gain tax computation statement of the company in liquidation. From the impugned order, it is evident that there was no party respondents either to general report No. 745 or report No. 45. It is also certain that notice was issued to the advocates in the panel but no such notice was issued to the chartered accountants in the panel though both are not parties to the reports. However, the above prayer was disallowed by the company court but the official liquidator has not filed any appeal against the said decision. By virtue of the impugned order, the appellants whose names are there in the panel of chartered accountants are excluded from handling the taxation work of the companies in liquidation. Therefore, it cannot be said that they are not aggrieved persons who are entitled to file the appeal under section 483. Whatever that be, it may be recalled that this court has already admitted the appeal on 30th June, 1998 in view of the above reasons and pursuant to the notice the parties have already entered appearance in this appeal. After the appearance, the respondents have filed their objections and, therefore, a decision on merits is required in the circumstances of this case. This being the background of the appeal, we cannot at this stage countenance the first objection referred to above. 

6. Secondly, the counsel contended that the present appeal was not maintainable under section 483, inasmuch as the order impugned was only an administrative order. In this context, the decision of the Supreme Court in Shankarlal Agarwala v. Shankarlal Poddar AIR 1965 SC 507 was referred to before us. The said decision, of course, dealt with the corresponding provision, namely section 202 of the Indian Companies Act, 1913. The following passage from the above decision is apposite in this context. 

"It is perhaps not possible to formulate a definition which would satisfactorily distinguish, in this context, between an administrative and judicial order. That the power is entrusted to or wielded by a person who functions as a court is not decisive of the question whether the act or decision is administrative or judicial. But we conceive that an administrative order would be one which is directed to the regulation or supervision of matters as distinguished from an order which decides the rights of parties or confers or refuses to confer rights to property which are the subject of adjudication before the court." 

Therefore, the question of appealability under section 483 depends upon the nature of the impugned order against which appeal is proposed to be filed. In other words, if the order impugned is administrative in character, no appeal will lie and if it is in the nature of judicial order as distinct from the former, adjudicating the rights of the parties, appeal will lie against the order. What really are the tests to be applied to ascertain whether a particular order is a judicial order or not. That has been vividly laid down in de Smith's Judicial Review of Administrative Action as follows : 

"Four tests have been evolved to identify judicial functions. The first is whether the exercise of the function results in a binding order. The second one is the presence or absence of certain procedural attributes, that is, the trappings of a court. The third test is whether the authority determines an issue conclusively by the application of a pre-existing legal rule. And finally, the test is whether an act or decision is binding and decisive and imposes obligation upon the rights of individuals." 

7. Now let us examine whether the impugned order passed by the company court can be treated to be a judicial order in the facts and circumstances of this case. As against the general report No. 745 and report No. 45 submitted by the official liquidator, objections were filed by the advocates. In general report No. 745 the official liquidator mainly prayed for permission to engage the services of the advocates in the panel in sales-tax matters and chartered accountants in the panel for income-tax and other matters in future. The advocates in the panels contested the report and opposed the claim made on behalf of the chartered accountants. The dispute has been finally adjudicated and the decision affected the rights of the parties. The decision taken by the company court has a binding force on all future transactions. The procedure followed by the company court has all trappings of a court and there cannot have a different opinion on this point. When there is an adjudication of the dispute after conducting the enquiry as per the procedure prescribed under the Companies (Court) Rules, 1959, we cannot say that the order passed therein by the company court is an administrative order. That being so, we are of the view that the order passed by the company court in the present case is a judicial order which can be assailed before the Division Bench under section 483. 
 
8. Finally, it was argued that there is no reason to interfere with the order of the learned Judge upholding the interest of the advocates in the panel prepared by the company court. We do not propose to probe into the general question canvassed by the panel of advocates as also by the official liquidator. In this appeal what we are concerned with is only a limited question whether the chartered accountants can be treated to have been totally excluded from handling tax work of any nature of the companies in liquidation. It is seriously apprehended by the learned counsel for the appellants that the operative portion of the impugned order contained in its last para may be interpreted to mean that all tax matters will have to be handled by the advocates included in the panel alone thereby totally excluding chartered accountants in the panel from handling any kind of tax work of the companies in liquidation. Though we generally agree with the principle propounded by the learned Company Judge, we cannot treat it as an absolute or unqualified principle or inflexible formula. It cannot be a cast-iron rule or rigid formula. It must be flexible according to the facts of each case. The official liquidator may face with imponderable and irreconciliable situations in the conduct of the cases of the companies in liquidation where the services of the chartered accountants are found to be essential. For example, when there is a necessity to make an audit of the accounts or preparation of balance-sheet or computation of capital gains tax in connection with the assessment or appeal, the official liquidator may call for the services of a qualified chartered accountant. Will it not be innocuous to say that in such situation the advocate can engage a chartered accountant for doing such work in relation to an assessment or appeal, particularly when there is an approved panel of chartered accountants. In such contingencies the official liquidator cannot totally dispense with the service of the chartered accountants. It is definitely for the official liquidator or the company court to take stock of the situation and adopt the course whichever may deem just and proper in the circumstances of the case. That does not mean the advocates can totally be excluded from such work. There must be equivalence for both the panels, one for advocates and other for chartered accountants existing on the roll of the official liquidator. If the decision of the official liquidator in a given set of facts is found to be not just and proper, the matter can be set right by the company court in appeal from such decision. Further, all the decisions taken by the official liquidator in the matter of winding up of the company is normally subject to the approval of the company court. This is no doubt a sufficient guarantee against the arbitrary and unreasonable decisions that may sometimes by taken by the official liquidator. 

9. In view of what is said above, we earnestly feel that certain modifications are required in the impugned order. What is required is while directing the official liquidator to entrust the tax matters to the advocates in the panel, he may also be allowed to entrust such work to the chartered accountants in the panel if such entrustment is found to be essential having regard to the nature of the work to be performed in connection with the sales-tax or income-tax, as the case may be. The official liquidator, after taking the decision in view of the facts of the case, shall submit the same to the company court for approval. The company court thereafter take the final decision on merits of the case, in view of the observation we have given hereinabove. The appeal is disposed of as above. 

Order accordingly.