9911796707
TMI Blog1974 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of Rs. 6,156.25, against M/s. Hindustan Lever Ltd., as on 8th July, 1966. The official liquidator had sent a notice on 9th June, 1969, to the first respondent which was replied to on 26th June, 1969, the reply being annexure "C" to the petition. In the reply, the first respondent stated that nothing was due to the company as the bills had been settled in full. The official liquidator claims that a sum of Rs. 6,156.25, shown in the books of the company, carries interest at the rate of 12 per cent, per annum and the amount due from M/s. Hindustan Lever Ltd. now stood at Rs. 11,199.25 This is the claim qua respondent No. 1. As regards respondents Nos. 2 and 3, who are directors of the company, it is claimed that they had failed in their duty to effect recovery of the amount from the first respondent. The case against these respondents is that they did not do anything to make any recovery of the amounts from 2nd July, 1966, to 5th February, 1968, when the winding-up proceedings were commenced. It is claimed that they were guilty of culpable negligence with regard to the amount due from M/s. Hindustan Lever Ltd. The application alleged that the reply of respondent No. 1 showed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent is not amenable to the jurisdiction of this court under section 543 of the Act. There is no limitation of period prescribed in the Act for applications under section 477. The application, cannot, therefore, be treated as being barred by time. On the other hand, there is a difficulty in proceeding under section 477 in respect of M/s. Hindustan Lever Ltd. This difficulty arises because of the language used in section 477. The power of the court to summon a witness is set out in sub-section (1) of section 477 of the Act. That sub-section reads as follows: "477. Power to summon persons suspected of having property of company, etc. (1) The court may, at any time after the appointment of a provisional liquidator or the making of a winding-up order, summon before it any officer of the company or person known or suspected to have in his possession any property or books or papers, of the company, or known or suspected to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers, or affairs of the company". This power to summon is restricted to the particular perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Hindustan Lever Ltd., in the form in which the application has been instituted. Another alternative has been urged on behalf of the applicant as an answer to the above objection. It is urged that even if the company cannot be examined on the ground that it is incapable of being examined on oath, some officer or director or other official connected with the working of the first respondent can be examined in its place and on its behalf. This submission needs even closer examination. It is to be noted that the three categories, I have mentioned above, include persons who can give information concerning the promotion, formation, trade, dealings, documents, papers or affairs of the company. The counsel for the official liquidator urges that this means that a person connected with the affairs, etc ., of the allegedly indebted company can also be examined. Such a construction of section 477(1) is not possible. Reference to the "company" contained in that sub-section means a company which is being wound up by the court and not the company which is claimed to be the debtor. Although the section does not specifically say which company is being referred to in the sub-section I do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before me in this type of cases as to whether the limitation period prescribed by the Limitation Act can apply to cases under section 477(5) of the Companies Act, 1956. I, however, do not propose to deal with the question of limitation, at least, in this judgment, as it is not necessary for this case. The result of the above analysis of the situation would show that an order directing the examination of any officer of M/s. Hindustan Lever Ltd. would be completely ineffectual. It would lead to no positive result and would be mere information in the hands of the official liquidator and such information could at most lead the official liquidator to institute other proceedings against M/s. Hindustan Lever Ltd. for the recovery of the alleged debt. But those proceedings can be instituted even without this information. The facts stated above show that the official liquidator is already in possession of information showing that M/s. Hindustan Lever Ltd. is indebted to the company in liquidation; that information is in the form of entries in the books of account of the company being wound up. That information could have been used by the official liquidator to institute appropriate procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs are the persons, who are solely able to depose about the transactions in dispute. The official liquidator being placed in an impossible position, is not able to get the requisite information from these delinquent directors, and often, these very directors are responsible for mishandling the affairs of the company. The ex-employees of the company are another class of persons, whom the official liquidator may turn to, but these persons also have, by the time the official liquidator comes on the scene, left the employment of the company being wound up and have gone elsewhere, or have become untraceable. This means that the official liquidator has no means to get the necessary evidence for proceeding against the debtors of the company. For this purpose, section 477 is available to him, for it enables the court to examine the alleged debtors and also to get information concerning the company's transactions. If the official liquidator wanted to get such information from Messrs. Hindustan Lever Ltd., he could have moved an application seeking to summon some of the directors or officials of the company and thus got the necessary information. As it happens, he has got the information in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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