9911796707
TMI Blog1976 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Ernakulam. The facts of the case are, in short, as follows : The applicant-bank is a company registered under the Indian Companies Act, having its registered office at Trichur. The Imperial Chit Funds (P.) Ltd., 1st respondent in the application, is also a company registered under the Indian Companies Act. This company is now under liquidation. This company was carrying on business of conducting kuries with head office at Ernakulam. This company had fixed deposits in certain branches of the applicant-bank. The details of the deposits are given in paragraph 4 of the application. The total amount of the deposits comes to Rs. 1,40,000. There are in all five such deposits. Each of these fixed deposits was offered as security in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act along with the other creditors of the company. It is stated that by filing a suit and obtaining a decree against the said company, the applicant-bank cannot claim preference over the other creditors. The official liquidator has taken a further contention that the second charge created in favour of the applicant-company has not been registered as required under the provisions of section 125 of the Companies Act, 1956, and, therefore the charge is not enforceable. The charge in favour of the respective kuri creditors have been registered. The 4th respondent, one of the directors, has filed a counter-affidavit resisting the application for leave. According to him, leave has to be refused since a suit is redundant. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be permitted to withhold the plaintiff's property simply because it is in liquidation. Differently stated, when property not available for division among the general creditors is the subject-matter of the suit, the persons entitled to it stand outside the winding up proceedings and possess rights which they can enforce independently of the liquidation proceedings. However, where the claim is in respect of what is no more than a simple contract which can be submitted to proof in the ordinary way, leave is almost invariably refused. In G.S. Setty Sons v. Y.C.W. S. Mills Co. Ltd. [1970] 1 Comp. L J 184 (Mys.) the Mysore High Court had to consider the jurisdiction of the company court under section 446. In that case an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the court may impose. The object of the section is to save "the company which is being wound up from unnecessary litigation and to protect its assets for equitable distribution amongst its creditors and its shareholders. The consequence of the winding up order, therefore, is that no suit can be filed against the company without obtaining the leave of the court. An application for such leave is, therefore, made necessary by the order for winding up. In dealing with such an application, the court has necessarily to consider the interest of the company and to see that its assets are not wasted in frivolous and unnecessary litigation. An order or decision on such an application is, therefore, clearly an order or decision in the matter of win ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile a suit. In this case the applicant made a demand on April 10, 1973, for payment of the amount. Time runs against the applicant and the suit for the enforcement of the personal liability, at any rate, will have to be filed before April 10, 1976. If the official liquidator was in a position to tell the applicant that "I have the statements of affairs. The directors have made available to me the details. I want only this much amount in the fixed deposit. You are entitled to Rs. 15,000. Here it is. Take it." Then leave can be refused. But here the official liquidator is not in a position to tell the applicant precisely as to the state of the company's affairs. The balance of convenience is, therefore, in favour of the applicant, since if ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
