2015 (3) TMI 583 - HC - Companies Law

Permission of filing arbitration proceedings when company in liquidation - Objection statement by Official Liquidator - Held that - Even assuming for a moment that leave is granted to raise the arbitration proceedings and if an award is passed in favour of the applicant, even then the applicant cannot be granted leave to execute such award independent of the liquidation proceedings. The applicant can only lodge its claim with the Official Liquidator based on the award that may be passed in their favour. If this aspect of the matter is kept in view, certainly, the contention putforth on behalf of the Official Liquidator that the expenses of the arbitration proceedings should not be burdened on the company in liquidation merits consideration. Therefore, instead of granting leave to proceed with the arbitration, I am of the opinion, it would be appropriate to permit the applicant to lodge its claim before the Official Liquidator. - Decided against the appellant.

Summary

Issues:
1. Claim for payment and arbitration proceedings against respondent.
2. Objection by Official Liquidator regarding arbitration proceedings and expenses.
3. Time limitation for the claim and the role of the Official Liquidator in adjudicating claims.

Analysis:
1. The applicant sought payment of a specific amount from the respondent or permission to initiate arbitration proceedings due to franchise agreements. The respondent being in liquidation prompted the applicant to approach the court for relief.

2. The Official Liquidator objected to the arbitration proceedings, citing the burden on the company in liquidation for expenses and representation. The Official Liquidator highlighted the need for claims to be made within the liquidation process and adjudicated accordingly.

3. The applicant argued that the claim fell within the limitation period, emphasizing the importance of timely action. The court acknowledged the validity of the claim but decided against granting permission for arbitration. Instead, the court directed the applicant to lodge the claim with the Official Liquidator for proper adjudication within the liquidation process.

4. The court considered the concerns raised by the Official Liquidator regarding the expenses of arbitration and the necessity of following the liquidation procedures for claim adjudication. By allowing the applicant to lodge the claim with the Official Liquidator, the court ensured compliance with legal requirements and protected the interests of all parties involved.

5. Ultimately, the court disposed of the application by granting leave to the applicant to lodge the claim with the Official Liquidator, who would then adjudicate the claim in accordance with the law. This decision aimed to uphold the principles of justice and proper legal procedure in the context of the liquidation proceedings.