1973 (8) TMI 105 - HC - Companies Law

Winding up - Suits stayed on winding-up order, Winding up - Receiver not to be appointed of assets with liquidator

Summary

Issues:
1. Appointment of receiver in a suit by a bank against a company in liquidation.
2. Compliance with section 453 of the Companies Act, 1956 for appointment of receiver.
3. Necessity of notice under section 80 of the Code of Civil Procedure in a suit against the official liquidator.
4. Allegations of unauthorized creation of equitable mortgage and lack of authority for deposit of title deeds.
5. Appointment of receiver based on previous similar case by another bank.
6. Entitlement of relief sought by the petitioner.

Analysis:
1. The suit filed by a bank sought the appointment of a receiver for properties charged and hypothecated in its favor by a company in liquidation. The application was contested on various grounds, including the appointment of a receiver without complying with section 453 of the Companies Act, 1956.

2. The first objection raised was regarding non-compliance with section 453 of the Companies Act, which states that a receiver shall not be appointed on assets in the hands of the liquidator without court permission. The court held that as the application was made to the court that appointed the liquidator, the appointment of a receiver by the court was deemed competent.

3. The respondent argued that the suit was incompetent due to the absence of notice under section 80 of the Code of Civil Procedure. The court analyzed the mandatory nature of section 80 and concluded that the suit, although against the official liquidator, was essentially against the company in liquidation. Therefore, notice under section 80 was not necessary.

4. Concerns were raised regarding the creation of an equitable mortgage through the alleged deposit of title deeds without proper authorization. The court emphasized the need to establish the plaintiff's title over the charged properties before considering the appointment of a receiver.

5. The petitioner relied on a previous case involving another bank where a receiver was appointed based on similar allegations. However, the court noted that the facts and basis of the previous case were different, and the appointment of a receiver in that case did not justify a similar appointment in the present case.

6. Ultimately, the court found that the petitioner was not entitled to the relief sought. Instead, the official liquidator was directed to inventory the assets in question and proceed with their disposal after due notice to the concerned parties. All parties were instructed to file necessary documents promptly, and costs of the application were to be borne by the assets under the official liquidator's control.