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TMI Blog1928 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... between them should be settled by a private arbitration of two gentlemen, one nominated by each of the parties and mentioned in the application. 3. The first question that arises is whether the Companies Act permits such a reference to arbitration by official liquidators, even with the sanction of the Court. I heard Sir Tej Bahadur Sapru representing the Allahabad Bank, Ltd., and Mr. Asthana, one of the official liquidators, in support of the application. Both the learned gentlemen expressed their view and submitted certain arguments that a reference to private arbitration was permissible under Section 179, Clauses (a) and (i), Companies Act. I deferred passing orders till I had carefully considered the matter, with the help of the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business carried on by the company. His knowledge and information of men and things is not likely to be co-extensive with similar knowledge of the directors. It, therefore, does not follow that because a living company is allowed to refer matters in difference to arbitration in a particular way that an official liquidator is allowed to make a reference to private arbitration. 7. A reference to Section 234, Companies Act, will show that the liquidator, with the sanction of the Court, may compromise certain claims, against the company and outstanding in favour of the company. It is, therefore, significant that while the Act deals with a power of compromise in the arbitrator, it makes no mention of his power to make a reference to arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is therefore not open to us to suppose that it was a matter of pure omission through inadvertence, that reference to arbitration was not one of the powers granted to the liquidator. 8. It has been held that suits instituted under Section 92, Civil P.C. cannot very well be made the subject-matter of private arbitration. The principle on which this conclusion was arrived at equally applies to a case of this nature. 9. I asked Sir Tej Bahadur Sapru if he could cite any authority, English or Indian, establishing the power of an official liquidator to refer a matter in dispute to private arbitration with the sanction of the Court. He frankly admitted that he did not come across any such authority. He also assured me that he did not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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