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TMI Blog2002 (7) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... M.C.As were dismissed as not maintainable. Before considering the reasoning of the Learned Company Judge, we will extract section 543(1) of the Companies Act below : "543. Power of Court to assess damages against delinquent directors, etc. (1) If in the course of winding up a company, it appears that any person who has taken part in the promotion or formation of the company, or any past or present director, manager, liquidator or officer of the company ( a )has misapplied, or retained, or become liable or accountable for, any money or property of the company; or ( b )has been guilty of any misfeasance or breach of trust in relation to the company; the Court may, on the application of the Official Liquidator, of the liquidator, or of any creditor or contributory, made within the time specified in that behalf in sub-section (2), examine into the conduct of the person, director, manager, liquidator or officer aforesaid, and compel him to repay or restore the money or property or any part thereof, respectively, with interest at such rate as the Court thinks just or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on a special footing and official liquidator should be differentially treated than the liquidator . With regard to the contention that even if official liquidator is not specifically included in the first and last parts of definition, he will come in the category of officer, the learned Judge found that the liquidator, officer etc. are specifically mentioned in the section and therefore under the term officer official liquidator will not come especially considering the inclusive definition of officer under section 2( 30 ) of the Companies Act. 3. We may now consider how the official liquidator is appointed. Section 448 of the Companies Act provides how the official liquidator is appointed. Section 448(1)( a ) reads as follows : "448. Appointment of Official Liquidator. (1) For the purposes of this Act, so far as it relates to the winding up of companies by the Court, ( a )there shall be attached to each High Court, an Official Liquidator appointed by the Central Government, who shall be whole-time officer, unless the Central Government considers that there will not be sufficient work for a whole-time officer in which case a part-time officer may be appointed;" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general powers under the Companies Act. 5. Under the third part of section 543(1), the term liquidator contemplates a liquidator of a particular company which is in the process of winding up. It can be an official liquidator appointed as liquidator in a court winding up or a liquidator in voluntary winding up. But the second part uses the terms official liquidator and liquidator separately because an official liquidator apart from his capacity as liquidator of a company under winding up by court, can file a petition under the above section in his official capacity. It enables the official liquidator to file a complaint against the liquidator of a company in voluntary winding up or any other officer as mentioned in the section. In other words, even if that company is under voluntary winding up and he is not appointed as a liquidator to that company, official liquidator can file a petition. That is why in the second part of the definition official liquidator is specifically mentioned. In the first part and the last part, the term liquidator is mentioned as a liquidator of a particular company in winding up and as regards a company ordered to be wound up as per the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody corporate, any director or manager of the body corporate; but, save in sections 477, 478, 539, 543, 545, 621, 625 and 633 does not include an auditor;" The above section is only an inclusive definition. Certain officers are specifically mentioned as officers of the company. In P.C. Pothen, Liquidator of the Common Wealth Bank Ltd. (in liquidation) (1966) (1) I.L.R. Ker. 1 Justice Raman Nayar has very clearly considered the matter in paragraphs 3 and 4 of the above decision. Since the matter cannot be explained in a more clear language, we extract below the paragraphs 3 and 4 : "3. The Registrar has taken the objection that a liquidator is not an officer of the company that is being wound up, and that therefore section 633 can have no application to him. My attention is drawn to the definition of officer in section 2( 30 ) of the Act, and it is pointed out that a liquidator finds no mention there. But then the definition is an inclusive definition, so that, if according to the ordinary meaning of the term a liquidator can be regarded as an officer of the company, the definition cannot have the effect of excluding him. My attention is next drawn to sections 192(7), 485( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive definition, manager is also specifically included as an officer. Therefore, we are of the view that the application cannot be dismissed as not maintainable merely because official liquidator is the respondent and the finding of the learned Judge that application against official liquidator under section 543 is not maintainable at all cannot be accepted. Official liquidator is a liquidator of a company ordered to be wound up. 8. Merely because a petition is maintainable under section 543 against the official liquidator, Company Court need not always proceed with the case unless the court is satisfied that there is prima facie case. There may be cases where the particular action challenged is specifically approved by the court and court has earlier considered the allegations now raised and found that nothing wrong therein, there is no necessity to proceed with the case. Therefore the Company Court can proceed with the matter only if there is a prima facie case and there is substance in the allegations. Official Liquidator is entitled to protection under section 635A. If the act is done in good faith, official liquidator cannot be proceeded as he is protected und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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