TMI Blog1979 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... he chit money less a discount of Rs. 1,400) on December 9, 1972. But, under the Rules of the chit fund, the successful bidder had to continue to pay the instalments due in respect of the chit and, apart from executing a promissory note for this purpose, he had also to produce two sureties for the due fulfilment of the above obligation. The respondent thus undertook to continue to pay the balance amount of Rs. 3,000 in monthly instalments of Rs. 100 each and respondent Nos. 2 and 3 guaranteed such payment. The first respondent made a few further payments but committed default after the 13th of April, 1970, leaving a balance of Rs. 2,600 due to the company from the respondents. It is for the recovery of this amount together with interest at 12% per annum that the application has been filed by the official liquidator. On behalf of the first respondent a reply has been filed in which the preliminary objection has been taken that the application is barred by time. I have heard counsel for the applicant and counsel for the respondent on this preliminary objection and this order is confined to the said preliminary objection. The point made by the respondent is that, since the amounts ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately the company went into voluntary liquidation that is on April 27, 1973. By virtue of section 518, the voluntary liquidator could have moved the court to exercise its powers under section 446 for recovering the amounts due from the respondents. The application under section 446 should, therefore, have been filed at the latest on or before April 27, 1976. The first contention of Sri Satish Chandra that the application cannot be maintained because a suit in respect of the amount, if filed at the same time, would be barred by limitation is clearly untenable. In support of this contention, Sri Satish Chandra relied upon the following observations made by Anand J., in Official Liquidator v. Pushpa Wati Puri [1978] 48 Comp. Cas. 385 (Delhi) (at p. 391) : "........ section 446(2)( b ) does not create new rights but lays down a summary procedure for the enforcement of existing rights and liabilities in that it lays down a special procedure and a machinery for the adjudication of certain claims and determination of liability in relation to a company which is being wound up. That being so, it is difficult to hold that such a machinery or procedure should enable the company, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, by virtue of section 518, with an application under section 446 against the present respondents. He argues that there is no justification for the assumption that the provisions of section 446 can be enforced only in a winding up by the court and invites attention to the wide language of section 518 of the Act. Section 518, in so far as is relevant here, runs as follows : "(1) The liquidator.........may apply to the court ........... ( b ) to exercise, as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court." On the strength of this provision, even in a voluntary winding up, the court has exercised the powers available to it under section 466 to stay a winding up [ Dimples Pvt. Ltd. v. Registrar of Companies [1978] 48 Comp. Cas. 98 (Delhi)], under section 446(1) to stay proceedings instituted against the company [ Sebastian v. Rubber Board [1967] 37 Comp. Cas. 117 (Ker.)] and, under section 468, to direct an agent to pay to the liquidator his dues to the company [ Bharat Traders Ltd. v. Sadhu Singh [1968] 38 Comp. Cas. 537 (Punj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances. The first is when it becomes necessary to determine "any question arising in the winding up". One can perhaps think of questions such as fraudulent preference, priority of claims and the like. The second is when it becomes necessary for the liquidators, in order to carry out the winding up satisfactorily and properly, to invoke the aid of court for enforcement of calls or the stay of proceedings and "any other matter". In the present case, we are not concerned with the powers of the court to enforce calls or to stay proceedings. Can this be described as "any other matter" within the meaning of section 518(1)( b ) ? A question had arisen regarding the scope of this expression in Bharat Traders v. Sadhu Singh [1968] 38 Comp. Cas. 537 (Punj.) and it was pointed out that there is a difference of judicial opinion as to whether the expression "any other matter" can be read ejusdem generis or not. But, without deciding this controversy and even assuming that these words envisage a wider interpretation, can the section be interpreted in the manner now sought? I think not. I have already pointed out that any such construction would be opposed to the nature and scheme of a volu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny was under voluntary winding up it was open to the liquidator to have filed an application under section 446 and that, therefore, the right to make an application under section 446 in this case had accrued even as early as April 27, 1973. Learned counsel next contended that if it is held that section 518 would not enable the voluntary liquidator to apply under section 446 then the position would remain unchanged even after the winding up had come under the supervision of the court. He invites my attention to section 526 and points out that an order of the court bringing a winding up under the supervision of the court does not enlarge the powers of the liquidator. In fact, in spite of the supervision order, the same liquidators may continue and under section 526(1) they would continue to exercise their powers without the sanction or interference of the court as if the company were in voluntary winding up. Thus, if the voluntary liquidator was not in a position to file an application under section 446, the position of the liquidator after the matter was brought under court supervision (even if he be the official liquidator) is no different. In support of this contention, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to apply to the court under section 446 seeking the recovery of the amounts due from the respondents was not available to the voluntary liquidator but became available for the first time only to the liquidators appointed when the matter came under the supervision of the court on November 12, 1975. On the strength of art. 137 of the Limitation Act, therefore, the application could be presented at any time within three years thereafter. In this case, the application was presented on July 14, 1978 and was, therefore, well within time. Before concluding I may point out that in the present case strictly speaking, it is not even necessary to go into the question urged by Sri Satish Chandra as to whether the voluntary liquidator was competent to maintain an application under section 446 or whether the liquidator became so competent when the matter came under supervision of the court on November 12, 1975. It seems to me that there is a simple and direct answer to the respondent's case if sections 523 and 526 and 458A are read together. Even if we take, as argued by Sri Satish Chandra, that the voluntary liquidator could have applied under section 446 and that the right to apply under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
