9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (10) TMI 538 - HC - Companies LawOfficial liquidator powers - Held that - Though the provisions of section 458 of the Act to which our attention is drawn by Sri Manjunath, learned counsel, does provide for a situation to confer on the official liquidator a discretion to exercise the powers under sub-section (1) of section 457, that provision is for institution of legal proceedings on behalf of the company even without the prior sanction or intervention of the court and that again is in the discretion, which the liquidator gets only on an order being passed by the court to this effect and not by the discretion, conferred directly on the official liquidator under the statute. While for the present, we proceed with the examination of the appeal on merits, it is very necessary that the official liquidator becomes aware of this legal position henceforth and evinces commensurate awareness whenever appeals are filed by the official liquidator and in respect of the orders passed by the learned company judge to indicate that the appeal is either necessary or desirable to protect the interest of the community of creditors and shareholders.
Issues involved:
Tenability of appeal filed under section 483 of the Companies Act, 1956 by the official liquidator against orders passed by the company court. Analysis: The judgment dealt with the issue of the tenability of an appeal filed under section 483 of the Companies Act, 1956 by the official liquidator against orders passed by the company court. The court initially entertained doubts regarding the official liquidator's ability to question the legality of orders passed by the company court, considering the official liquidator's close association with the court. However, the court examined the statutory provisions of section 483, which provide for the right of appeal against orders passed by the company judge during the winding up of a company. The official liquidator, while acting as a limb of the company court, also has the responsibility to represent the company under liquidation. The court referred to a Supreme Court judgment recognizing the official liquidator's power to file and maintain appeals under section 483 and the provisions of section 457, which outline the powers of the liquidator. The respondent argued that the official liquidator, representing the company, does not have independent existence and primarily assists the company court in winding up proceedings to protect the interests of creditors and shareholders. The respondent emphasized that the official liquidator's duty is to ensure equitable distribution of the company's assets. The court acknowledged that section 483 allows for intra-court appeals but noted that it is an enabling provision and not specific to the official liquidator. Section 457 outlines the functions and duties of the official liquidator, emphasizing the role in salvaging company assets for equitable distribution among creditors and shareholders. The court highlighted that the official liquidator acts as part of the management under section 457 and is essential for efficient asset salvaging. While the official liquidator is not independent, the court recognized an element of discretion in filing and maintaining appeals under section 483 if an order is detrimental to creditors and shareholders. The judgment emphasized the need for official liquidators to be aware of legal positions and file appeals to protect the interests of stakeholders. The court noted that all actions by the official liquidator are subject to court control, ensuring oversight and adherence to legal procedures. In conclusion, the court found the appeal by the official liquidator to be tenable under section 483, emphasizing the duty to protect the interests of creditors and shareholders. The judgment ordered further steps to be taken by the official liquidator and highlighted the necessity for awareness of legal positions in future appeals.
|
