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Issues Involved:
1. Entitlement to claim set-off in liquidation proceedings. 2. Validity of the respondents' claim for set-off of the security deposit against purported recoveries. Issue-wise Detailed Analysis: 1. Entitlement to Claim Set-off in Liquidation Proceedings: The primary issue is whether the respondents can claim set-off in these proceedings under section 446(2) of the Companies Act. The respondents argue that they are entitled to set-off based on established legal principles and precedents. They cite judgments such as *Official Liquidator, Andhra Paper Mills Co. Ltd. v. Anand Bros.*, *Langley Constructions (Brixham) Ltd. v. Wells*, and *Maruti Ltd. (In liquidation) v. Parry & Co. Ltd.* to support their claim. These cases establish that under rule 6 of the Companies (Court) Rules, 1959, the provisions of Order VIII, rule 6 of the Civil Procedure Code (CPC) apply, allowing a defendant to claim set-off against any demand made by the plaintiff in a suit. The court concurs with this position, noting that the right to set-off is a defensive mechanism and is permissible in liquidation proceedings to ensure fairness and justice. 2. Validity of the Respondents' Claim for Set-off: The second issue is whether the respondents have made out a case for set-off of the amount mentioned. The respondents claim various amounts including the value of fixed deposit receipts (FDRs) and interest, rent for June and July 1997, booster pump and water charges, repair charges, and TDS. The court examines each claim: - Rent for June and July 1997 and Maintenance Charges: The court infers that rent and maintenance charges for June and July 1997 were not paid by the company, as there is no proof provided by the applicant. - Booster Pump and Water Charges: The court accepts the respondents' claim for booster pump and water charges of Rs. 1,200 per month for four months, totaling Rs. 12,000. - Repair Charges: The respondents' claim for Rs. 50,000 in repair charges is disallowed due to lack of documentary evidence and failure to notify the company or the Official Liquidator about the damage at the time of vacating the premises. - TDS Payment: The claim for TDS payment of Rs. 16,616.04 is also disallowed as no proof of payment on the company's account is provided. - Fixed Deposit Receipts (FDRs): The court acknowledges the FDRs valued at Rs. 5 lakhs with accrued interest of Rs. 4,35,136, totaling Rs. 9,35,136. The respondents are entitled to set-off this amount against the security deposit. Conclusion: The court concludes that the respondents are entitled to a set-off of Rs. 9,77,136, which includes the value of FDRs with interest, rent for June and July 1997, and booster pump and water charges. The remaining balance of Rs. 22,864 from the security deposit is to be paid by the respondents to the applicant. Additionally, since the balance amount was not paid upon demand, interest at 8 percent per annum is awarded from the filing date of the application until payment is made. The respondents are directed to pay this amount within six weeks. The application is disposed of accordingly.
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