9911796707
|
Home
Issues:
Petition for preferential payment claim by the petitioner against the official liquidator. Analysis: The petitioner sought directions for the official liquidator to admit his claim for preferential payment. The petitioner, along with his brother-in-law, promoted a company for a vegetable-ghee plant, contributing substantial amounts for its establishment. The petitioner placed an order for machinery with an engineering company, which was later adopted by the company. Subsequently, a dispute arose regarding the quality of the machinery, leading to a lawsuit filed by the company against the engineering company. The company was later wound up, and the official liquidator reported against further prosecution of the lawsuit. The petitioner, as a co-plaintiff, was held liable for costs awarded by the Bombay High Court, which he paid in full settlement to avoid attachment of his property. The petitioner claimed reimbursement from the official liquidator for the entire amount paid. The official liquidator contended that while the petitioner's claim would be admissible as a creditor, he could not claim preferential treatment under Section 53A of the Companies Act, 1956. The petitioner, however, relied on Section 529 of the Act, which deals with the rights of secured and unsecured creditors in the winding up of an insolvent company. Referring to insolvency law, it was argued that property held by the insolvent on trust for others is not divisible among creditors and does not pass to the official assignee or receiver. The petitioner invoked Section 88 of the Indian Trusts Act, asserting a fiduciary relationship between him and the company, seeking reimbursement based on this premise. The court deliberated on precedents and legal provisions cited by both parties. It was noted that the petitioner's reliance on fiduciary duties did not warrant preferential treatment under the law. The court emphasized that the petitioner, like the engineering company, would rank as an ordinary creditor in the liquidation process. Despite the petitioner's argument about reposing confidence in the company and official liquidator, the court held that preferential treatment was not applicable in this case. The petitioner's claim was admitted, but he was categorized as an ordinary creditor, not entitled to preferential treatment. In conclusion, the court declined to award costs considering all circumstances surrounding the case. The judgment clarified the petitioner's status as an ordinary creditor without preferential treatment, despite his arguments regarding fiduciary relationships and reimbursement claims.
|
