1938 (11) TMI 15 - HC - Companies Law

Summary

Issues:
Reduction of amount payable to the Liquidator of the Peoples Bank of Northern India by Khan Bahadur Mian Chiragh Din.

Analysis:
The petitioner, Khan Bahadur Mian Chiragh Din, sought a reduction in the amount payable to the Liquidator of the Peoples Bank of Northern India. The Bank closed its doors, and the petitioner owed money on three accounts. The Court had previously reduced the interest payable on the amount due. The petitioner had paid Rs. 13,000 in part payment and now requested a further reduction. However, the liquidator opposed any reduction, citing legal provisions governing compromises with debtors. Rule 68 of the Court's Rules and Orders required the liquidator to support any compromise with an affidavit stating it would benefit the Company. Section 234 of the Companies Act empowered the liquidator, with the Court's sanction, to compromise debts and liabilities. The Court referred to English case law, emphasizing that the Court could not compel a liquidator to accept a compromise if it was not in the best interest of the Company. The Court held that in this case, the liquidator was not in a position to demonstrate that the proposed reduction would benefit the Company, leading to the dismissal of the petition.