1961 (10) TMI 36 - HC - Companies Law

Winding up Meeting of Creditors, Powers and duties of liquidator, Power of Tribunal to make calls

Issues Involved:
1. Jurisdiction of the court.
2. Maintainability of the petition.
3. Validity of the petition filed by one liquidator only.
4. Timeliness of the claim for payment of the call.
5. Compliance with procedural rules in drawing up the list of contributories.
6. Admissibility of claims against the company.
7. Justification of the call amount per share.
8. Shareholding status of respondents Nos. 2 and 9.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Court:
The court addressed whether it had jurisdiction over the matter. The company was initially registered in Lahore and later re-incorporated in Jullundur City. The recognition was granted under section 43 of the Displaced Persons (Debts Adjustment) Act, 1951. The court held that the Registrar's recognition, which was not appealed, was valid and could not be questioned in court. Thus, the company was deemed to have been formed and registered under Indian law, giving the court jurisdiction.

2. Maintainability of the Petition:
The respondents argued that the liquidation proceedings were illegal due to procedural lapses, such as incorrect proxy submission timelines and lack of sanction under section 457 of the Companies Act, 1956. The court found no evidence of harm due to proxy submission errors and ruled that the voluntary liquidators were empowered to make calls without court sanction under section 512. Thus, the petition was maintainable.

3. Validity of the Petition Filed by One Liquidator Only:
The respondents contended that the petitions were invalid as they were filed by only one of the two liquidators. The court found that both liquidators had signed a power of attorney authorizing the filing of petitions. An application by the second liquidator to add his name to the petition was also on record. Therefore, the petitions were deemed valid.

4. Timeliness of the Claim for Payment of the Call:
The call of Rs. 2 per share made on 28th February 1947 was argued to be time-barred under Article 112 of the Indian Limitation Act. The voluntary liquidators made a fresh call to regularize the arrears, which was within the statutory period. The court ruled that the fresh call was valid and not time-barred, as the obligation to pay the call after winding up was statutory, not contractual.

5. Compliance with Procedural Rules in Drawing Up the List of Contributories:
The respondents questioned whether the list of contributories was drawn up according to the rules and the Act. The court did not find any procedural violations in the preparation of the list, thereby ruling in favor of the petitioners.

6. Admissibility of Claims Against the Company:
The respondents challenged the admissibility of several claims listed in annexure "D" of the petition. The court did not find sufficient grounds to disallow these claims and ruled that they were admissible.

7. Justification of the Call Amount Per Share:
The court addressed whether the call of Rs. 1.50 per share (or Rs. 2.00 in CO. 28 of 1960) was justified. The court found that the calls were necessary to meet the company's financial requirements and were justified under the circumstances.

8. Shareholding Status of Respondents Nos. 2 and 9:
The respondents disputed the shareholding status of respondents Nos. 2 and 9. The court did not find any evidence to refute their status as shareholders, thereby ruling in favor of the petitioners.

Conclusion:
The preliminary issues in both petitions, CO. 16 and 28 of 1960, were decided in favor of the petitioners. The court scheduled further evidence on the remaining issues for 1st December 1961.

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