1962 (3) TMI 46 - HC - Companies Law

Winding up - Payment of debts due by contributory and extent of set off, Power of Tribunal to make calls, Debts of all descriptions to be admitted to proof and Preferential payments

Issues Involved:

1. Settlement of the list of contributories.
2. Admissibility and extent of claims against the company.
3. Set-off of debts against calls.
4. Justification of the call per share.

Issue-wise Detailed Analysis:

1. Settlement of the List of Contributories:

The respondents argued that the list of contributories was settled contrary to law and procedure, as they were not given an opportunity to contest their inclusion in the list or argue that the company's assets were sufficient to meet liabilities. The liquidator, Shri Jai Krishna Suri, testified that all formalities required by the Registrar under sections 500 and 501 of the Companies Act were complied with, including the publication of notices in the Gazette of India and the Hind Samachar. The court found that the notices were sent under postal certificate, as required by Rule 181 of the Companies (Court) Rules, 1959, and not by prepaid registered post as per Rule 184. However, since no respondent denied receiving the notice, the court held that there was substantial compliance with the procedure, and the list of contributories was valid.

2. Admissibility and Extent of Claims Against the Company:

The court examined several claims against the company listed in annexure "D" of the petition. The contested claims included:

- Shri J.K. Suri's Claim: Shri Suri claimed Rs. 6,473.76 as remuneration under the managing agency agreement. The court acknowledged the claim but reduced the remuneration to Rs. 175 per mensem from Rs. 350 per mensem for the period from July 1956 to January 1958, considering that no company work was in progress.
- Punjab State's Claim: The claim of Rs. 5,000 by the Punjab State, Department of Industries, was not disputed in terms of quantum but was subject to a separate petition regarding priority.
- Landlord's Claim: The claim of Rs. 1,200 by the landlord, Shri Gurbachan Singh, was recognized as valid despite the absence of a rent deed, as the eviction order for non-payment of rent substantiated it.

3. Set-off of Debts Against Calls:

The court addressed the issue of set-off, where Shri Suri attempted to set off Rs. 750 against his unpaid call of Rs. 1.50 nP per share. The court held that a contributory cannot set off a debt owed by the company against calls in a winding-up scenario, whether voluntary or compulsory. This principle was supported by precedents from Palmer's Company Precedents, Halsbury's Laws of England, and various case laws, including In re Paraguassu Steam Tramroad Co. and In re Overend, Gurney & Co. Consequently, Shri Suri's set-off was disallowed, and he was required to pay the call like any other contributory.

4. Justification of the Call Per Share:

The court considered the justification of the call of Rs. 1.50 nP per share in C.O. No. 16 of 1960 and Rs. 2 per share in C.O. No. 28 of 1960. Taking into account the reduction in Shri Suri's remuneration and the disallowance of his set-off, the court found that a call of Re. 1 per share was justified in C.O. No. 16 of 1960, while the call of Rs. 2 per share in C.O. No. 28 of 1960 was upheld. Payment orders were passed accordingly, with future interest at 6% per annum and costs of Rs. 150 in each case.

Conclusion:

The court validated the list of contributories, reduced Shri Suri's remuneration, disallowed his set-off, and justified the calls per share with specific payment orders and interest provisions.

← Previous Next →