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TMI Blog1964 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... e published by the respondents in the Decent Chronicle. The material facts which are not in dispute may be shortly stated. The company was incorporated under the provisions of the Hyderabad Companies Act with an authorised capital of Rs. 2,80,000, the Government of the erstwhile Hyderabad State owning eighty per cent, of the shares. Among the several objects set out in the memorandum of association of the company, one was the promotion of visual education by means of exhibiting documentary films. For the exhibition of these films, a building belonging to the erstwhile Hyderabad Government was taken on lease in March, 1952, on a monthly rental of O.S. Rs. 500 for a period of 15 years. The company abandoned the exhibition of pictures as it was not profitable to continue it. So, in April, 1958, the theatre with the equipment and the furniture was leased out to one Gyan Sagar for a period of two years on a monthly rental of I.G. Rs. 600. That document contained a clause giving option to the lessee to renew the lease for a further period of one year. After the formation of Andhra Pradesh, the Government appeared to have made a demand on the company for payment of a sum of Rs. 26,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly as the provisions of section 530 are clear and the Government pleader appearing for the respondents does not contest the proposition that |rent due to the Government by a company does not fall within the ambit of section 530. Notwithstanding this, does section 537 enable the Government to recover the amount as laid down in the order under appeal ? We have here to consider the impact of section 537 of the Act on a debt like this. That section postulates : "(1) Where any company is being wound up by or subject to the supervision of the court ( a )any attchment, distress or execution put in force, without leave of the court, against the estate or effects of the company, after the commencement of the winding up; or ( b )any sale held, without leave of the court, of any of the properties or effects of the company after such commencement; shall be void. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government." It may be mentioned here that the last clause in sub-section (2), viz., "or any dues payable to the Government" was added by an amendment to this section introduced by Act 65 of 1960. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force against the estate or effects of the company after the commencement of the winding up. (3) An application under sub-section (2) shall be made ( a ) If the attachment, distress or execution is levied or put into force by a High Court, to such High Court ; and ( b ) if the attachment, distress or execution is levied or put into force by any other court, to the court having jurisdiction to wind up the company" It is manifest that sub-section (2) can be resorted to only in cases contemplated by sub-section (3). In other words, it is only when the attachment, etc., is levied or put into force either in a High Court or in any other court, the stay would be applied for in the High Court or in the other court having jurisdiction to wind up the company. Shri Anantha Babu, learned counsel for the appellants, contends that this is not the effect of that section, that sub-section (2) is independent of sub-section (3), that the width of the amplitude of the powers contemplated by sub-section (2) cannot be cut down by sub-section (3), that sub-section (3) is only illustrative of the powers vested in the court by sub-Section (2) and is not exhaustive thereof, and that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riations. For the first time in section 216 that restrictions now found in section 518 in the form of clause (3) was incorporated. Section 216 is the predecessor of section 518. Of course, sub-section (5) was not present in section 216, while sub-section (4) corresponds to sub-section (3) of section 216. That being so, the rulings called in aid by the learned counsel for the appellant do not give any assistance to him. Shri Anantha Babu then fell back upon the argument that the word "court" occurring in clause ( b ) of sub-section (3) is comprehensive enough to take in a District Collector functioning under section 52 of the Revenue Recovery Act. The learned counsel urges that unless we give a wide meaning to the term "court" as used in sub-sections (2) and (3), it would be frustrating the intendment of the Indian Companies Act for securing, a distribution of the effects of the company pari passu and that courts should not adopt a construction which would retard this distribution. Learned counsel draws our attention to section 2(11) of the Companies Act which defines the word "court", and also section 10 of the Act, which deals with the jurisdiction of courts, as vouching his p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting his duties under section 52 of the Revenue Recovery Act. So the learned counsel cannot derive any support from section 2(11) and section 10 of the Act. Nor is the case of Dhanalakshmi Ammal v. Income-tax Officer [1957] 31 ITR 460 , relied on by him, is of any help to the appellant. All that was laid down there was that, when the Collector purports to act as a civil court for purposes of realising the amount under a decree under the proviso to section 46(2) of the Indian Income-tax Act and proceeds to attach properties standing ostensibly in the name of somebody as belonging to the assessee, he is bound to entertain a claim, under Order 21, rule 58, and dispose it of in the same way a court would do it in the course of execution of a decree. We do not think that it has any analogy here. It is to be remembered that under the proviso to sub-section (2) of section 46 of the Indian Income-tax Act, the Collector is invested with all the powers of a civil court for the purposes of recovering an amount due under a decree. So, when he exercises that function in that capacity, he has also to exercise the functions of a civil court in the execution of a decree. Consequently, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an it be said that he has any trappings of a court. It is also difficult to predicate that he is required to act judicially under section 52. It was further observed by their Lordships in that case that where the executive or administrative bodies are not required to act judicially and are competent to deal with issues referred to them administratively, their conclusions cannot be treated as quasi-judicial conclusions. This pronouncement clearly indicates that an executive or administrative officer like a Collector cannot answer the description of a court within the connotation of sub-sections (2) and (3) of section 518. In Jagannath Prasad v. State of U.P. [1963] 2 SCR 850 ; 14 STC 536, the Supreme Court held that a Sales-tax Officer functioning under the U.P. Sales-tax Act is not a court within the meaning of section 195, Criminal Procedure Code. In Lalji Haridas v. State of Maharashtra (not reported) Since reported in [1964] 52 ITR 423 (SC), it was observed in the majority judgment of the Supreme Court that in the absence of section 37(4) which said that a proceeding before an Income-tax Officer shall be deemed to be a judicial proceeding within the meaning of sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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