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Civil Revision No. 945 of 1963, decided on 7th January 1965.

S. 171‑Company merely pro forma defendant in suit, no relief against it being claimed by plaintiff-Provisions of section 171 no bar against prayer of plaintiff for deletion of company's name as defendant‑Civil Procedure Code (V of 1908), O. 1, r. 10 (2).

O. I, r. 10(2)‑‑Party originally not named in suit but added subsequently as pro forma defendant‑Court competent, in suitable circumstances, to strike out name of such party.

B. C. Das for Petitioner.

A. K. M. Nur ul Islam for the Opposite‑Party No. 3.

This Rule is directed against an order dated 17‑6‑63 passed by the learned Subordinate Judge allowing an application for stay of further proceedings in Money Suit No. 14 of 1961 and refusing to allow the prayer of the plaintiff ‑petitioner for striking out the name of pro‑defendant No. 4 National Coir and other Industries Limited.

The petitioner brought a money suit against opposite‑parties Nos. 1 to 3 on the allegation that they borrowed a sum of Rs. 8,000 by executing a promissory note on 2‑11‑58 but they did not repay the same. Hence the suit was brought with a claim for Rs. 10,400 including principal and interest.

The defendants entered appearance but at the instance of defendant No. 3 pursuant to their statement made in the written statements the company, namely, the National Coir and other Industries Limited which has its head office at Feni in the district of Noakhali, was added as pro forma defendant No. 4 on 17‑4‑62 inspite of the objection of the plaintiff-petitioner. Eventually that company went into liquidation. As a consequence of the liquidation proceedings started under the provisions of the Companies Act, the defendant No. 3 prayed for staying further proceedings in the suit and the plaintiff‑petitioner made an application for striking out of the name of pro forma defendant No. 4. By an order dated 17‑6‑63 the learned Subordinate Judge allowed the prayer of defendant No. 3 and refused that of the plaintiff as stated above.

Mr. Das appearing in support of the Rule contends that it is permissible in law to ask for striking out any party if improperly joined at any stage of the suit or proceeding. He further contends that there is no scope of application of the principle underlying section 171 of the Companies Act in a case where a suit is not desired to be proceeded with against any company.

Mr. Nur ul Islam, however, contends that as soon as a liquidation proceeding had started the subject‑matter of the suit or the disposal thereof is likely to affect the interest of the company and as such it comes within the mischief of operation of section .171 of the Companies Act. He further submits that having once made the company a party as pro forma defendant No. 4 it is not open to the plaintiff to ask for striking out the same party.

The language of section 171 of the Companies Act is in these terms:-

"When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose."

By asking for striking out the name of the company from the category of defendants particularly when it has been placed in the category of pro forma defendant, no relief being asked for against it, it can hardly be suggested that the plaintiff concerned wants to proceed with the suit against the company or that the interest of the company is likely to be affected even though it may not be a party to the suit itself. If the name of the company is struck out it ceases to be a party in the suit and it is up to the plaintiff to take the risk of having a decree against parties other than the company itself. The company's interest are surely not to be affected if it is not a party in the suit. The learned Subordinate Judge seems to have thought that even the disposal of the application for striking out the name of defendant No. 4 would amount to proceeding with the suit against the company. This, in our view, seems to be an incorrect line of thinking. It is not disputed by the learned Advocates appearing on behalf of the parties before us that even though the company was made a party yet the company by its written statement disclaim any interest in the subject‑matter of the suit. In fact, according, to the company itself it was unnecessarily made a party. It is not also disputed by Mr. Islam that no relief was ever claimed against the company and Mr. Das even now stresses that he is prepared to take a decree against opposite‑parties Nos. I to 3 alone if on merits he succeeds and he is not interested in pursuing or proceeding against the company for the fruits of the decree if and when obtained. In these circumstances we are inclined to think that section 171 of the Companies Act cannot stand as a bar against the prayer for striking out the name of the A company and thus freeing the company from the consequences or obligations of the present suit. The contention of Mr. Islam that section 171 of the Companies Act is operative in a case like this must, therefore, be overruled.

The next contention of Mr. Islam that the company having nonce been made a party is not liable to be struck out does not also appear to be tenable in the circumstances of the case. According to sub‑rule (2) of rule 10 of Order I of the Code of Civil Procedure:-

"The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out

As a consequence of the order dated 17‑4‑62 by which the company was brought on record and added as pro forma defendant No. 4 the company could be regarded as a party but certainly this factor cannot get a higher consideration than what would have been the position in case the plaintiff himself in his original plaint would have made the company a party defendant. The effect of adding a party as a defendant or otherwise simply puts the party concerned in the same category as the parties originally brought on record subject to the question of limitation as provided in the relevant rule. As such there seems to be no bar in a suitable case against a prayer for striking out the name of a party if the facts of the case so permit. In the present case as already stated not only the company itself but also the plaintiff and other parties have nothing to show that the plaintiff interested in getting relief against the company. In this view of the matter, we are inclined to think that the Court was perfectly entitled to make appropriate orders upon the application for striking out the name of pro forma defendant No. 4 from the records. For all these reasons we are inclined to think that the learned Subordinate Judge failed to exercise jurisdiction vested in him according to law and the order challenged before us cannot stand.

The result, therefore, is that this Rule is made absolute; the impugned order dated 17‑6‑63 is set aside and it is directed that the prayer of the plaintiff for striking out the name of pro forma defendant No. 4 be treated as allowed and the name of pro forma defendant No. 4 should accordingly be treated as struck out and it is further directed that the suit do proceed for hearing and disposal according to law without pro forma defendant No. 4, namely, the National Coir and other Industries Limited, at the risk of the plaintiff. As suggested by the learned Advocates, let the suit be heard expeditiously and let the records be sent down as early as possible.

There will be no order as to costs of this Rule.

--I agree.

K. B. A. Rule made absolute.

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