1988 (12) TMI 291 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the Taxing Master in assessing bills of costs in liquidation proceedings.
2. Applicability of Rule 600 of the Bombay High Court (Original Side) Rules.
3. Interpretation and application of Rule 604 of the Bombay High Court (Original Side) Rules.
4. Validity of the Chief Justice's order directing the Taxing Master to accept bills of costs.
5. Proper procedure for the official liquidator to employ advocates and the taxation of their fees.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Taxing Master in Assessing Bills of Costs in Liquidation Proceedings:
The judgment clarifies that the Taxing Master has no jurisdiction to assess bills of costs in matters arising out of liquidation proceedings or company matters. It is explicitly stated, "The Taxing Master has no jurisdiction whatsoever to assess bills of costs in any matter arising out of liquidation proceedings or in company matters." The appropriate authority for this task is the Company Registrar, who shall act as the Taxing Officer in accordance with the rules provided under the Companies (Court) Rules, 1959.

2. Applicability of Rule 600 of the Bombay High Court (Original Side) Rules:
The claimant argued that the claim should fall within the scope of Rule 600, which limits the amount that can be sanctioned for instructions for brief to Rs. 1,000 unless otherwise ordered by the court. However, the judgment notes that Rule 600 does not mention company applications or judges summons and is not based on any law or rule having the force of law. The judgment states, "Strictly speaking, even rule 600 does not apply at all."

3. Interpretation and Application of Rule 604 of the Bombay High Court (Original Side) Rules:
Rule 604 was analyzed to determine its applicability to the taxation of bills of costs. The judgment clarifies that Rule 604 pertains only to bills of costs for work done up to December 31, 1976. It is stated, "Rule 604 cannot be availed of for the purpose of assessing any bill of costs for the work done after December 31, 1976." Therefore, the rule does not apply to new bills of costs for work done after this date.

4. Validity of the Chief Justice's Order Directing the Taxing Master to Accept Bills of Costs:
The judgment questions the validity of the Chief Justice's order directing the Taxing Master to accept bills of costs. It is noted, "I am a bit intrigued as to how the Chief Justice could have passed an order as above." The judgment asserts that there is no provision under company law or the High Court Rules that allows the Chief Justice to pass such an order. The judgment concludes that the order was passed without any legal basis.

5. Proper Procedure for the Official Liquidator to Employ Advocates and the Taxation of Their Fees:
The judgment outlines the proper procedure for the official liquidator to employ advocates. The official liquidator must obtain the sanction of the court in each matter, as per Section 459 of the Companies Act, 1956, and Rule 307 of the Companies (Court) Rules, 1959. The taxing officer must ensure that the appointment of the advocate has been duly sanctioned. The judgment also discusses the scale of fees for advocates, noting that the scale shall not exceed the one set out in annexure III, unless the court orders otherwise.

Conclusion:
The judgment concludes that the Taxing Master lacks jurisdiction to assess bills of costs in liquidation and company matters, and such matters should be handled by the Company Registrar. It also clarifies the inapplicability of Rule 600 and Rule 604 to the current case and questions the validity of the Chief Justice's order. The proper procedure for the official liquidator to employ advocates and the taxation of their fees is also outlined.

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