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TMI Blog1982 (9) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act, 1956. In or about July, 1979, there was a fire in the vicinity of the said galas and gala Nos. 16 and 17 were damaged in that fire. The suit, however, was defended by the official liquidator by engaging an advocate. The suit was decreed on July 14, 1982, and the company in liquidation was directed to deliver vacant and peaceful possession of the suit premises to the landlords, viz., M/s. Janata Industries, on or before August 16, 1982. The question of preferring an appeal against the said decree arose and the official liquidator was advised that if any appeal was to be preferred, he will have to deposit the arrears of rent for the period from September, 1977, to June, 1982, amounting to Rs. 87,000. This the official liquidator found it impossible to do as the company had no funds whatsoever to its credit. The official liquidator, therefore, sought directions of the court by his report dated August 10, 1982, whether he should hand over possession of the said gala Nos. 16 to 19 to the landlord. On that report, the official liquidator was directed to give notice to the petitioning creditor. In his resubmitted report dated September 1, 1982, the official liquidator has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the liquidator may call a meeting of the committee as and when necessary (section 465(3)). Section 464 provides that at the time of the passing of the winding-up order or any time thereafter the court may appoint a committee of inspection to act with the liquidator. It is through the committee of inspection that the body of creditors have a right of audience in matters in respect of a company in liquidation. There is no committee of inspection appointed in this case and there is no proper application before the court for appointment of the committee of inspection. Shri Zaiwala orally stated that the judge's summons may be treated as a summons for appointment of a committee of inspection which I did not allow. If an appointment of the committee of inspection is to be made, section 464 read with rules 140 and 141 of the Companies (Court) Rules, 1959, provides for the procedure to be followed for appointment of a committee of inspection. Rule 11 of the said Rules states that the applications mentioned in r. 11 (a) shall be made by petition and rule 11 (b) states that all other applications under the Act or under the Rules shall be made by judge's summons. Section 464 does not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the landlord, leave was granted in second appeal to execute the decree. In construing section 171, the Supreme Court observed (p. 24): "It is intended to ensure that the assets of a company ordered to be wound up by the court shall be administered for the benefit of all the creditors, and that some creditors only shall not obtain an advantage over others by instituting or prosecuting proceedings against the company. The section is intended to maintain control of the court which has made an order for winding up on proceedings which may be pending against the company or may be initiated after the order of winding up, and the court may remain seized of all those matters so that its affairs are administered equitably and in an orderly fashion." It was further held (p. 24): "If sanction of the court under section 179 to prosecute the appeal before the High Court was obtained, and it must be so assumed, the contention raised on behalf of Bansidhar loses all significance, for, an execution application is only a continuation of the suit and the control of the High Court enures during the execution proceeding also. If the sanction of the court has been obtained for the prosecution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while section 537 is placed in Chapter V of Part VII under the sub-heading "Effect of winding-up on antecedent and other transactions". It is to the antecedent transaction of obtaining of the decree prior to winding-up and execution levied after winding-up that section 537 would apply. Therefore, even on this basis, once leave of the court is obtained by the plaintiff under section 446 to commence a suit after winding-up or to prosecute a suit already commenced prior to winding-up, no further leave is necessary for executing the decree. Therefore, it is an error to say that the landlords, M/s Janata Industries, should have obtained further leave of the court to execute the decree and that the landlords not having obtained the leave of the court to execute the decree, the execution levied by them and the consequent possession taken by them of the four galas is void. I have been referred to a decision of the Delhi High Court in the case of Tanwar Finance P. Ltd., In re [1979] 49 Comp. Cas. 827. In that case, the voluntary winding up became subject to the supervision of the court several years ago. There were several decree-holders who had taken out execution proceedings in the Subor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt having once granted permission to prosecute the suit, the court cannot deprive the plaintiffs of the fruits of the decree by refusing leave to execute the decree. In the present case, what is necessary to be considered is that there is a heavy liability of Rs. 87,000 by way of arrears of rent up to June, 1982, and a further liability of manse profits of Rs. 4,500 up to September, 1982, at the rate of Rs. 1,500 per month. If any offer for taking the galas on caretaker basis is received by the official liquidator, the official liquidator will first have to pay arrears of rent as well as the accruing rent of Rs. 1,500 per month, with a further payment of income-tax on the amount which he receives by way of compensation. Taking all these facts and circumstances into consideration, I see no reason to accept the baseless arguments advanced before me by the learned counsel. The company in liquidation will be put to a heavy liability merely because a creditor unfoundedly feels aggrieved. In order, however, to safeguard the interests of the company, I directed the official liquidator to negotiate with the landlord not merely to give up the heavy arrears of Rs. 87,000, but also to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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