2019 (6) TMI 1155 - HC - Companies Law

Winding up - proof of debt - Evidence Act - HELD THAT - Where the company (in liquidation) is said to have admitted a debt owing to applicant, Official Liquidator is not included as a person with regard to such admission made a by party in the winding up action. Official Liquidator came in upon order of winding up. Admission by the company (in liquidation), relied upon by Court to direct winding up, therefore, is not available as proof required by the office. This is so because the office, not being a party, had not made the admission but is requiring proof of debt. The office, if can be said to be a person, has derived interest from a party in the winding up proceeding under the statute but that situation is not provided for in Evidence Act, with regard to admissions. The office has before it Court s satisfaction to direct winding up. Applicant will furnish proof of money transfer to the company (in liquidation). Official Liquidator might then consider whether this is sufficient, as a special case, since this Court will not make a direction dispensing with proof altogether. Application disposed off.

Summary

Issues:
1. Setting aside or quashing of communication issued by the Deputy Official Liquidator.
2. Directing the Official Liquidator to adjudicate the petitioning creditor's claim based on the affidavit of proof of debt.

Analysis:
1. The applicant, represented by Mr. Bose, sought direction to set aside or quash communications dated 3rd February, 2017, and 23rd February, 2017, issued by the Deputy Official Liquidator, High Court, Calcutta. The applicant, a foreign entity, became a creditor of the company in liquidation after transferring money for the supply of goods that were not provided. The winding-up petition was filed, and the winding-up order was made. Mr. Bose argued that the Official Liquidator's request for proof of debt, different from what was disclosed in the winding-up petition, was unjustified, as the admitted debt due to the applicant had already been accepted by the Court. He contended that the proof had been submitted as per the relevant form under the Companies (Court) Rules, 1959. However, the Official Liquidator, represented by Ms. Sikdar, pointed out the lack of documentary evidence and non-compliance with specific rules, leading to the absence of proof of claim from the applicant.

2. The Court analyzed the admission made by the company in liquidation, which led to the direction for winding-up. The Official Liquidator's request for proof of debt was considered in light of Sections 17 to 21 of the Evidence Act, 1872, regarding admissions. It was highlighted that the Official Liquidator, not being a party to the admission made by the company in liquidation, could not be bound by it. Rule 149, which requires creditors to prove their debt unless directed otherwise by the Judge, was emphasized. The Court concluded that the applicant needed to provide proof of the money transfer to the company in liquidation, as the Official Liquidator could consider this as a special case, while not completely dispensing with the requirement for proof.

In summary, the Court disposed of the application by emphasizing the need for the applicant to furnish proof of the money transfer to the company in liquidation for the Official Liquidator's consideration, in accordance with the relevant rules and legal provisions.