IN RE: INDIAN COMPANIES ACT VII OF 1913; IN RE: FREE PRESS JOURNAL (MADRAS) LTD., (IN LIQUIDATION) Vs. STATE

JUDGEMENT

(1.) ON 19th April, 1955, an application was made to wind up the Free Press Journal (Madras) Ltd. On 2nd May, 1955, an interim receiver was appointed and on 18th July, 1955, an order to wind up the company was made.

(2.) THE Free Press Journal (Madras) Ltd., was located in premises belonging to the Dinroze Estate whose proprietors are D.D. Italia and J.D. Italia. On 12th January, 1956, possession of the premises was delivered to the proprietors by the Receiver. On 4th January, 1956, the Dinroze Estate filed a claim before the Official Receiver for a sum of Rs. 5,670 which it alleged was due to it as arrears of rent for the premises occupied by the Free Press Journal (Madras) Ltd. The Receiver made a preferential payment of Rs. 2,625 to the Dinroze Estate on the basis that the rent for the period between 2nd May, 1955, when he was appointed interim receiver and 12th January, 1956, when he handed over possession should be properly treated as part of administration charges. The Dinroze Estate has now filed this application praying that a further sum of Rs. 1,281 should be paid to it in preference to other creditors.

(3.) MR . Sreeraman next contended that even if the claim to the whole of Rs. 1,281 is not allowed the Dinroze Estate is entitled to priority at least in respect of one month's rent. This is how he put his argument. Section 229 of the Indian Companies Act provides: