Decided on December 08,1967



- (1.) A petition was filed on November 25, 1958 for the winding up of the Bharatpur Oil Mills (Private) Limited, and the winding up order was made on October 4, 1960. M/s. Babulal Rukmanand, a partnership firm, made an application to the official Liquidator on January 27, 1961, for proving its debt against the Company for a sum of Rs. 10,000 and Rs. 2/3/6 as the costs of notice, and interest at 9 per cent per annum. It was claimed that the loan had been advanced on March 21, 1949, and although it had not been repaid, it had been "confirmed" by the company Rukmanand, it may be stated, was one of the partners of M/s. Babulal rukmanand and his son Radheyshyam Khandelwal was one of the directors of the aforesaid Company. The creditor offered to give evidence, if necessary, in proof of the debt. The Official Liquidator asked the creditor to satisfy him that the claim was within limitation, and Radheyshyam Khandelwal thereupon produced a letter of the Company dated March 8, 1958 acknowledging the amount of Rs. 11,800/as due from the Company on December 25, 1957 He asked for further time to produce more evidence and recorded his statement on July 7, 1966 On a consideration of the evidence before him, the Official Liquidator reached the conclusion that the letter dated March 8, 1958 was not genuine and that the balance sheet dated December 31, 1956, on which also reliance was placed by the creditor in proof of his debt, could not be considered as an acknowledgment and did not save the limitation. He also held that the claim was already time barred on the date of the balance sheet, that is before December 31, 1956. In this view of the matter, he held that the claim had not been proved, and dismissed it by his order dated July 22, 1966. It is against this decision that the present appeal has been filed.
(2.) MR. L. R. Bhansali learned counsel for the appellant found it difficult, for obvious reasons, to assail the order of the Official Liquidator on the scanty evidence on which it was based and he has therefore argued with much vehemence and insistence that it was the duty of the Official Liquidator to consider the entire record of the Company, including all its balance sheets, before deciding the appellant's proof, and that he should not have based his finding merely on the evidence which the creditor was able to place before him. The learned counsel has therefore argued that this Court should consider all the other evidence and decide the question whether the debt was within limitation, afresh. This submission requires a consideration of the nature of the duties of an Official Liquidator and the proceedings before him in such matters. Mr. Bhansali has argued that the limitations of an appeal from a judgment of a civil court, cannot apply to the present case and that the provisions of Rule 27 of Order 41, C. P. C. should not be invoked for the purpose of deciding the question of additional evidence. The learned counsel has, all the same, presented a formal application under that rule with a prayer that the other evidence bearing on the proof may also be taken into consideration.
(3.) AN Official Liquidator is an officer of the Court and as has been observed in halsburv's Laws of England, third edition, volume 6, paragraph 1142, he must "maintain an even and impartial hand" between all the individuals whose interests are involved in the winding up proceedings. It is his duty to make himself thoroughly acquainted with the affairs of the company, and technical hurdles as to procedure are not viewed with favour and have to be overcome The liquidator has to act fairly and honourably in considering the claims of persons against the company. This is why supervisory jurisdiction has been vested in the Court under section 460 of the Indian Companies Act, 1956 and a specific provision has been made to the following effect in Sub-section (6) of that section -" (6) Any person aggrieved by any act or decision of the liquidator may apply to the Court; and the Court may confirm, reverse or modify the act or decision complained of and make such further order as it thinks just in the circumstances. " To give effect to this provision, so far as it relates to the rejection of a creditor's proof, it has been stated in Rule 164 of the Companies (Court) Rules, 1959, that if a creditor is dissatisfied with the decision of the Liquidator in respect of his proof, he may, not later than 21 days from the date of service of the notice upon him of the decision of the Liquidator, appeal to the court against the decision. Then the rule provides the mode of filing the appeal, and goes on to say that, in deciding it, the court shall have "all the powers of an appellate court under the Code". When therefore the provision of Sub-section (6) of Section 460 of the Act is read with rule 164, it becomes quite clear that there is justification for the argument that the appeal is really by way of an application for the scrutiny, by the court, of the decision complained against. There is no requirement that this right or opportunity is subject to any rigid rules of procedure for, while Rule 164 provides that, on the presentation of an appeal, the Court shall have all the powers of an appellate court under the Code of Civil Procedure, it does not go on to provide further that the rigid rules of procedure contained in the Code in respect of an appeal shall be applicable to such appeals also. I am therefore persuaded to take the view that while considering an appeal against the rejection of a creditor's proof, the Court is at liberty to consider any additional evidence that may be led by the parties.;

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