TMI Blog1957 (4) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent banks in his charge. The previous court liquidator was asked to furnish security by this court for the sum of Rs. 2,00,000. The court made such order following the previous practice when liquidators were private liquidators or official receivers appointed as liquidators by the orders of the court in specific cases. That practice however now requires to be reviewed in the light of the new Companies Act, 1956, and the Banking Companies Act. The legal situation has now considerably changed. The question is also an important one from the point of view of administration. Under the old Companies Act of 1913 there was authority for this court to order security to be furnished by the liquidators of companies and it was the almost inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intain the security ordered to be furnished. The judge also had the power, in case the security provided was either inadequate or excessive, to increase or reduce the amount of security. Following these statutory provisions and the rules, the previous court liquidator was asked to furnish security, as indicated above. It is contended before me on behalf of the present court liquidator that those statutory provisions and rules are no longer applicable to the court liquidator, having regard to the changes brought about by the statutes. I consider that contention to be right in law. I shall state my reasons very briefly. The statutory provision empowering the court to order security to be furnished by a liquidator under section 175(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the court liquidator is no longer in existence. Deliberate exclusion of such power by not re-enacting the provisions of section 175(4) of the Indian Companies Act, 1913, is an argument in favour of such view. Neither the Government order of the appointment of the court liquidator nor the official notification thereof published in the Gazette of India requires any security to be furnished by the court liquidator of this High Court. Under section 448 of the Companies Act, 1956, it is for the Central Government to appoint the official liquidator and presumably therefore as such appointing authority, to lay down the terms and conditions of his appointment. No term or condition lays down that the official liquidator shall furnish security and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sufficient at all to answer for that loss even if the court comes to the conclusion in any appropriate case that he should be answerable for the loss. The Government of India may in that case be liable for such loss or any part thereof, because he as a public servant or a public officer will be supposed to represent the Government. The public revenues and the public exchequer will therefore run the risk, without adequate arrangements for satisfying such loss. It appears to me therefore that some such provision as already exists in section 6 of the Calcutta Official Receivers Act, 1938, should be made in the case of court liquidator. Section 6 of that Act provides that the revenues of the State shall be liable to make good all sums requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Companies Act, 1956, and the Banking Companies Act, any power to call for security, and as I feel that there is no statutory power given to this court to take steps in case of failure to furnish security by appointing some other persons as liquidators, the order cannot be made any more by the court. At the same time, I feel that this is a case which should be reported to the Government of India for consideration whether they should not, in making these appointments, make some provision for furnishing security by the court liquidator, and how in fact the premium in respect thereof should be paid and whether the liabilities would be a charge on the revenues, as provided in section 6 of the Calcutta Official Receivers Act, 1938. inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
