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Issues:
Appeal against payment order in voluntary winding up - Notice requirement for payment order - Power of liquidator under section 212 of Indian Companies Act - Rule of natural justice for notice before payment order - Interpretation of relevant provisions - Comparison with Bombay High Court judgment. Analysis: The judgment involves an appeal by a contributory firm against a payment order made by the District Judge in a voluntary winding-up case. The company was sent into voluntary winding up by creditors' resolution, and liquidators were appointed. The liquidators settled the appellants on the list of contributories and issued a notice of demand for payment, which was not complied with by the appellants. An application for a payment order was made, and the court granted the order without giving notice to the appellants. The District Judge held that notice was not necessary before issuing a payment order, leading to the appeal before the High Court. The key issue revolves around the power of a liquidator in voluntary liquidation under section 212 of the Indian Companies Act. The relevant provisions, specifically subsections (c) and (d), empower the liquidator to settle a list of contributories and make calls. The appellants argued that a rule of natural justice required them to be given notice before a payment order was made, citing the absence of a specific rule in the Company Rules regarding notice for payment orders. The appellant's counsel relied on a judgment of the Bombay High Court emphasizing the importance of not making orders ex parte, even though the specific case related to a different section of the Companies Act. The High Court judge agreed with the principle and stressed the need for notice before making payment orders, aligning with the wording of section 186 of the Companies Act, which grants the court power to issue payment orders. Ultimately, the High Court allowed the appeal, set aside the District Judge's order, and remanded the case for a decision in accordance with the law and the principles discussed. The parties were directed to appear before the District Judge for further proceedings, with no order as to costs given the circumstances of the case.
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