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TMI Blog1940 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... managing agents of the company after the petition for winding up bad been filed. Then there is an application by Ram Kishen Das Khanna that the order of the official liquidators disallowing his claim for salary should be set aside and the official liquidators should be directed to pay him the amount due. The four applications by the liquidators raise substantially the same questions of law and principle and I think it will be convenient if I dispose of them in one order. As the application of Ram Kishen Das Khanna is connected with the application of the liquidators against him, I will deal with that matter also at the same time. The questions which arise out of the applications by the liquidators are whether this Court has any jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive the court power to direct payment from any persons other than those mentioned in section 185 of the Act. All those against whom the liquidators have claimed are persons to whom section 185 would not apply. The view which I have taken is supported by the authority of a Bench of this Court. I refer to the case of John Bros. v. The Official Liquidator, Agra Spinning and Weaving Mills Limited (AIR 1936 All. 808). It appears that a similar view has been taken in the English courts: In re United English and Scottish Assurance Co. Ex parte Hawkins (L.R. 3 Ch. A. 787) and In re Vimbos, Ltd. [1900] (1 Ch. 470). It has been argued that there are English cases in which orders have been passed for payment of money to liquidators by persons such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to whom money is due at the date of the petition for winding up should be treated equally with certain exceptions in favour of those who have priority under the express provisions of the Act. Where the company or its officers make preferential payments to some creditors, they are obviously acting in contravention of this rule. On the other hand, where the business of the company is continued in good faith either because it is hoped that it may not be necessary eventually to wind up the company or because in the interests of all concerned it is better that the company should on being wound up be transferred as a going concern, it is necessary for the company to enter into various transactions and it would be impossible for it to do so if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the price of them and it had been paid, it is probable that the court would have validated such payment, but as matters stand, I am not prepared to direct that the payments should be considered valid. The case of Messrs. Nariman & Co., is that they obtained a decree long before the petition for winding up was presented and that they would have recovered their money before the date of presentation if the managing agents of the company had not by various means delayed execution. The fact, however, remains that Messrs. Nariman & Co., were ordinary creditors under a decree at the date of the presentation of the petition and I can see no reason why they should get preference over other creditors. It is possible that there may be other credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating any transaction, I am not prepared to validate it. Ram Kishen Das Khanna was an employee at the head office of the company in Allahabad. It must be explained that there was an agreement between the company and its managing agents, Messrs. P.L. Jaitly & Co., that the latter would receive a fixed monthly payment from the company towards the expenses of the head office and would in its turn supply such clerks and accommodation and so forth as was necessary. It is quite clear that the result of this arrangement was that clerks employed in the head office were the employees of Messrs. P.L. Jaitly & Co., who were responsible for making payment of their salaries. The company had no contract with these employees because it paid a fixed sum t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ram Kishen Das Khanna worked as an accountant in the head office of the company and he must have known very well, as indeed he admits, that he was paid by Messrs. P.L. Jaitly & Co. No payments made to him passed through the books of the company which he himself kept. I hold that he was not an employee of the company and that the decision of the official liquidators to disallow his claim was correct. Messrs. P.L. Jaitly & Co., paid part of the amount due under the decree and the official liquidators have applied that Ram Kishen Das Khanna should be directed to refund this sum. For the reasons I have already given I hold that the court has no jurisdiction to pass such an order. As for validating the claim there was no reason why Ram Kishen D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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