9911796707
TMI Blog1967 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... of these three premises the official liquidator, after several attempts, obtained possession of one room only in premises No. 42, Haralal Das Lane, Calcutta, as also the entire premises of 20B, Jora-bagan Street, Calcutta. The official liquidator states that by reason of pendency of a stay application he could not take possession of premises No. 20A, Jorabagan Street, Calcutta, and remaining portion of premises No. 42, Haralal Das Lane, Calcutta. The said application was subsequently dismissed by this court by an order dated December 12, 1966. By an order dated September 7, 1965, leave was granted to the liquidator to surrender the tenancy standing in the name of the company in respect of these three premises. In terms of that order the official liquidator made over possession of the said room in premises No. 42, Haralal Das Lane, Calcutta, to the persons mentioned above. The official liquidator has since been informed by these persons, viz ., the ladies mentioned above, that Sri Mohabir Prosad Jalan, a shareholder of the company who was occupying a number of rooms in the said premises No. 42, Haralal Das Lane, Calcutta, had put the said rooms under lock and key after removing all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or can he even then invoke the general powers of the court. In other words does the residual jurisdiction of the court yield to the express specific remedy prescribed by the statute. This question, therefore, leads to the consideration and interpretation of the provisions of section 456 and its amendments in sub-sections (1A) and (1B). Section 456(1) of Companies Act provides that where a winding-up order has been made, the liquidator shall take into his custody or under his control all the properties, effects and actionable claims to which the company is or appears to be entitled. There is no dispute that the liquidator in such a case shall take into his custody or under his control all the properties, effects and actionable claims of the company under order of liquidation. The controversy, however, begins with sub-sections (1A) and (1B) of section 456 of the Companies Act which were introduced by the 1960 Amendment Act and they are as follows : "(1A)For the purpose of enabling the liquidator or the provisional liquidator, as the case may be, to take into his custody or under his control, any property, effects or actionable claims to which the company is or appears to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that report (C. W.N.) the nature of a liquidator's custody where I was considering section 178(2) of the old Companies Act (corresponding to section 456(2) of the Companies Act, 1956). I expressed the view there as follows : "A liquidator is a statutory custodian of the property and effects of the company directed by an order of the court to be wound up under the Companies Act . . . This provision means that the official liquidator is the statutory custodian although sub-section (2) of section 178 (corresponding to section 456(2) of the Companies Act, 1956) provides that such property and effects ' shall be deemed to be in the custody of the court'. That is only the notional custody. That notional custody in jurisprudence begins from the date of the order of the winding-up. But the actual custody or control under section 178(1) of the old Companies Act (or section 456(1) of the Companies Act, 1956), is given to the official liquidator and he is directed to take into his custody or control the property and effects and actionable claims of the company . . . No doubt the court exercises control over the liquidator ; but that is only a supervisory control, but the actual executive a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anguli, the official liquidator, is that these liquidation orders being enforceable as decrees under the Civil Procedure Code use of force can necessarily be invoked under such provisions in the Civil Procedure Code as Order 21, rule 35(3) where in connection with the decree for immovable property it is laid down: "Where possession of any building or enclosure is to be delivered and the person in possession, being bound by the decree, does not afford free access, the court, through its officers, may, after giving reasonable warning and facility to any woman not appearing in public according to the customs of the country to withdraw, remove or open any lock or bolt or break open any door or do any other act necessary for putting the decree-holder in possession". By virtue of these provisions in sections 634 and 482 of the Companies Act read with Order 21, rule 35(3) of the Civil Procedure Code and on the strength of the reasons mentioned above the official liquidator submits that this court can order the liquidator to break open the door and the padlock pursuant to the order of this court directing him to take possession and in implementation thereof. The official liquidator als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal Side Rules of this court where it is expressly provided as follows : "Whenever the liquidator of any banking company wants to make a request to the Chief Presidency Magistrate or any District Magistrate under the provisions of section 45S of the Act and in doing so he finds it necessary to send such letter through the Registrar he shall submit the same together with a duplicate thereof to the Registrar. The Registrar may thereupon countersign the original and forward the same to the District Magistrate at the cost of the bank and shall keep the duplicate with the records of the proceedings of the bank". It is noteworthy that no similar rule has been made under the Companies Act in connection with the official liquidator. The whole point of Mr. Mukherjee's argument in this branch has been that originally the Companies Act, 1956, did not have the provisions like sub-sections (1A) and (1B) of sections 456 of the Companies Act, but they were introduced later on by amendment in 1960, which followed in the wake and pattern of the banking companies' statutory provisions. In this connection Mr. Mukherjee relied on a decision of the Punjab High Court at Delhi in S. Raghbir Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial liquidator that considerable difficulty was experienced by him in reducing to his possession the books, papers, properties and assets of the company. Sub-section (2) might be numbered as sub-section (3) and the following might be inserted as subsection (2)". What followed thereafter is the exact replication or a reproduction of the present sub-sections (1A) and (1B) of section 456 of the Companies Act. The report says that because one official liquidator in the whole of India had represented that "considerable difficulty" was experienced, therefore, it suggested the amendment. The report does not say what those difficulties were and is wholly silent about them. On the contrary, the official liquidator here before me in this court has argued that there is usually considerable delay in the Magistrate's court for the very simple reason that the Magistrate is busy with hundreds of other criminal cases and that this court always is speedier because this liquidation court is exclusively assigned to be in charge of liquidation of companies, and matters in connection therewith. This is one of the examples of what hasty legislation does on a point which should have required much more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... custody of the court as from the date of the winding-up order of the company depends on the construction of the relevant sections of the Companies Act quoted above and also on the nature and character of liquidator's function and duties, which it will be necessary now to examine. I shall clear a preliminary misconception that the official liquidator is exactly like a receiver appointed by the court. This analogy stems from rule 233 of the Companies (Court) Rules which is as follows : "For the discharge by the official liquidator of the duties imposed by sub-section (1) of section 467 and the last preceding rule (rule 232) the official liquidator shall, for the purpose of acquiring and retaining possession of the property of the company, be in the same position as if he were a receiver of the property appointed by the court, and the court may on his application enforce such acquisition or retention accordingly". The preceding rule 232 of the Companies (Court) Rules lays down that the duties imposed on the court by section 467(1) with regard to the collection of the assets of the company and the application of the assets in the discharge of the company's liabilities shall be di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for direction covers the exact field mentioned in section 456(1A) and (1B) of the Act. On the doctrine of generalia specialibus non derogant, if a specific field is covered by a specific provision in the statute that should normally override a general power which does not express this specific power covered by this specific provision. Although this doctrine applies as between different statutes the principle applies to the construction of the different sections and their scope in the same statute. If that were not so, the sections in a statute will be not only overlapping but conflicting and sometimes difficult to apply and administer. Section 457 of the Companies Act describes the powers of the liquidator. In sub-section (1) it describes the liquidator's powers which can be exercised only with the sanction of the court. Among such powers is the power to institute or defend any suit, prosecution or other legal proceedings, civil or criminal in the name and on behalf of the company. This again I consider has to be read subject to section 456(1A) and (1B) of the Companies Act where the statute straightaway gives power to the liquidator to apply in writing to the Magistrate in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of enabling the liquidator to take into custody or under his control any property of a company. The courts are jealous of their powers and jurisdictions and are reluctant to part with their control and jurisdiction over the liquidator who is also an officer of this court and who works under the control and direction of the liquidation court. To permit other courts to interfere in the process of winding-up may be to introduce a division of responsibility and function not conducive to proper and efficient administration of the winding-up of a company. At the same time for reasons good or bad, Parliament has thought fit on a report which I have quoted above to introduce this amendment in the statute and effect must have to be given to this amendment. No construction should, therefore, be put upon this amendment as to make it a dead-letter. If the liquidator being an officer working under the control of the liquidation courts is given the choice to come to this court always for using force or for helping him to take possession then the whole of the amendment embodied in sub-sections (1A) and (1B) of section 456 of the Companies Act will become an absolute dead-letter. Some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sanction of the court whereas in section 23 7(1) it is the court winding-up the company who can direct the liquidator to prosecute. One is the liquidator's power which may be exercisable with the sanction of the court and th3 other is the court's power to direct the liquidator to do a particular act. Therefore, the fact that under section 23 7(1) of the Act the court can direct the liquidator to prosecute a director, manager, officer or member of a company cannot mean that the liquidator cannot prosecute them under section 179( a ) of the Indian Companies Act independently of section 237(1) thereof". On the basis of the Supreme Court's decision quoted above and the decision of the court of appeal here it is possible, therefore, to hold in certain exceptional cases that concurrent remedies are available before different authorities for the same purposes. It is not a construction which is to be lightly adopted. But it can be done in an appropriate case. That is the law as I understand it in the light of the decisions which I have discussed above. In the light of the above reasons and authorities, I shall now endeavour to formulate my conclusion. My interpretation is as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But then if the liquidator wants the assistance of this court in such a matter which is covered by sub-sections (1A) and (1B) of section 456 of the Companies Act he should give special reasons, circumstances and grounds for not approaching the Magistrate and for not following the procedure laid down and prescribed by sub-sections (1A) and (1B) of section 456 of the Companies Act. Such a construction in my judgment leads to harmony. It gives effect to the amendment introduced in sub-sections (1A) and (1B) of section 456 of the Companies Act and at the same does not take away the ultimate right of this court as the liquidation court, to see that its order for possession under the winding up order is not nullified by any extraneous process or authority. I would, therefore, direct the official liquidator in ordinary and normal cases to follow the procedure prescribed in section 456(1A) of the Companies Act and in special and extraordinary cases with stated special reasons to come to this court for help and assistance. As there is no special ground made in this case why the liquidator should not go to the Magistrate under section 456(1A), I make no order on this application and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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