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TMI Blog1964 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... scribes capital of the company 788, equity shares of The 100 each and 14265 equity shares to ₹ 10 each stand is the name of Narayanalal Bansilal who is the chairman of the Board of the Directors of he company. Narayanalal Bansilal is also the karta and manager of joint Hindu family consisting of himself his sons and daughters and the shares standing intake name of Narayanalal Bansilal were purchased in out of the funds belonging to the joint family. According to the Court Receiver who was appointed Receiver High Court suit No. 224 a of 1961and who presented the petition for winding, up a large also o number of other shares of the company were also purchased out the fund belonging to the joint family and wee taken in the names of kishanlal Murlidhar Jayakrishans Gangadas and sevaram Ranchhoddas as the Benamidars for the joint family. (2a) It appears that prior to the 8th of March 1956 the joint family of Narayanlal Bansilal owned a sugar farm at Harinagar in the state of Bihar. On 8th March 1956 by a registered conveyances made between Narayanlal Bansilal and his sons Balkrishna Narayanalal Narayanalal on the hand and the company on the other, the said sugarcanes farm with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce proceeding for winding-up of the company will be adopted without any further intimation. On 17th July 1962 the company sent a reapply of the Court Receiver raising several contention. In was contend that a sum of Rupees twenty - five lakhs and odd was not but that a per the company balance - sheet the said amount was due and payable to Narayanlal bansilal and his three sons who were the vendors under the conveyed that the conveyances dated 8th July 1956 . It was further contend that in the installment due under the registered conveyances court not be paid by the company on accept of a notice of attachment dated 24th July 1956 that had been issued and served upon the company be the Additional Income - tax officer, section v. Central Bombay under section 46 (5 -A) of the Indian Income - tax officer Act 1922. The company further contended that in any event the claim for the Rupees twenty - five lakhs had become barred by the law of limitation. In view of the these contentions the accompany pointed out that the there was no question of payment of the said amount of Rupees twenty - five lakhs to Additional Collector of Bombay as required to by the Court Receiver and the company furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and if had been filed mala fide. Mr. Banaji further urged that the company was perfectly solvent and therefore the petition ought not to have been admitted and the direction not to have been given y the learned judge. We shall deal with the these points one after the others presently. (5) In support of his contention that the Court Receiver had no power to present a winding had up petition in this case, Mr. Banaji relied upon the provisions of Order XL Rule 1 clause (d) of the civil Procedure Code and also on the order that had been made by the this court while appointing Court Receiver as the Receiver of the joint family properties. The relevant provision or Order XL Rule 1 run as follows: 1 (1) Where is appears to the court to be just convenient, the court may be order:- (a) appoint a receiver of any property whether and before of after decree: (b) X X X X X (c) X X X X X and (d) Confer upon the receiver all such powers as to bringing and defending suits and the for the realization management of protection preservation and improvement of the property the collection of the rent and profits thereof, the application and disposal o such rent profits and the exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... really unnecessary to consider this argument of Mr. Banaji for the simple reason that the clause (d) of sub - rule (1) or Order XL R.1 of the code Receiver for the purposes of filing a suit but the with all powers for the purposes of the realization management protection preservation and improvement of the property in the case under the order dated 20th October 1961 the Court Receiver was clothed not only with a power to file a suit but with all necessary and power for realization, management protection and preservation of the property under clause (d) mentioned above. The old question that need therefore be considered is as to whether a proceedings which is initialed by filing a winding-up petition which is proceedings for the realization management protection of preservation of the prepay or not. Mr. Banaji urged that ordinarily a winding-up petitioner is not the normal mode for realizing a debt due to a creditor and that the suit would be the proper remedy for realization of such by a creditor. According to Mr. Banaji, a winding-up petition was a process by which the court achieves the objects of equitable distribution of debtors property. In support to his contention Mr. Banaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the winding-up petition. It is not doubt true that the dominate object of suit o realize a particular debt, while that of winding-up petition is the equitable distribution of the debtors property amongst his creditors of he debtors property amounts must necessarily be preceded by the getting in of all such debtors property and realization of all such property. It cannot be disputed that the necessary is consequence of filing a winding-up petition is the realization of the all the property of debtor and thereafter the process of equitable distribution thereof commences. In this view of the matter it is clear that a proceeding which is commenced by filing a winding-up petition s proceeding for realization of the property and therefore when the Court Receiver was clothed with the all the court power under Order XL R 1(1) (d) of the code of civil procedure it must be file a winding-up petition for he purpose to realizing the property the benefit of the which would endure to all the creditors of the company. We are, therefore, unable of accept Mr. Banaji contention that the court the Receiver in the present case has no power to present a winding-up petition. (7) The next contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order for the delivery of goods or payment of money to him by a party to the action. There may no doubt be exceptional cases in which a receiver can bring an action in his own name when for instance he is the hold of a bill of exchange. In that case he can maintain an action, not because he is receiver but because he is he holder of the bill It would thus appeal that according to the above maintain decision under English law a receiver except cannot maintain an action in his own name except in special cases. We may point out that the decision by (1882) 22 QBD, 179 came to be considered by the English court in later decision and the general observation made by Lord Esker have been dissented from the have been regard as being dissented from and later decision of In Re Macon 1904 2 KB 700. In this later case the court of Appeal held that the Receiver who had obtained the assignment of the judgment debt over the creditor could present a bankruptcy petition and if was further held that the decision in 1888 2 QBD 179, only decide that the receiver who cannot sue in his own name cannot be a good petitioning creditor. The relevant observations of Vaughan Williamns L.J. Appear at p. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions and for it realization management, protection preservation and improvement o f the property. It is well settled that one a receiver is appointed in by a court under O. XL r. 1 of the code of Civil Procedure with all the power mentioned is clause (d) of subtle (1) the property in respect whereof such a receiver is appointed in is custody legislature and party to the litigation except where of such receiver is appointed in he custody receiver is entitled to deal with the property of which he is entitled to file suit inches own name. If necessary we may refer to the decision of the supreme court reported In vendetta Mallayya v. Ramaswami and co. AIR1964SC818 where their Lord ships of the supreme court have pointed out that a receiver authors to collect the debt is empowered to institute suit therefore and a suit instituted by the Receiver in his own name is perfectly competent. A decision of out court reported in Achut, v. Shivajirao 39 Bom LR 224: AIR 1937 Bom 224 has also taken the same view. Though it is true that the same time it is clear that the receiver s appointed is entitled to maintain action in his own name. In this view of the matter it is clear that the though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of to you, take proceeding for the winding-up of he company. Incidentally it may be stated that a large amount by way of Income - tax arrears nd pentacle and tune of the Rupees Thirty five Lakhs and odd was due to and payable by Narayanlal Bansilal to Income - tax authorities and I respect of the said due the Additional Income -tax officer. Section v. Central Bombay, has served a notice date 24th July 1956 on the company under section 46 (5 - A) of the Indian income - tax Act 1922 where by the additional Income - tax act 1922, where by called upon the company to pay on account of Narayanalal Bansilal in Liquidation of the said Income - tax dues. The Additional Income - tax officer had pointed out to the company that any payment that would be made by the company to him pursuance's of his notice would in law company liability to Narayanlal Bansilal and the officer has further pointed out to the company that if the after service of this notice the company de any payment to Narayanalal Bansilal, the company would be held personally liable to the income - tax authorities to the extent to which such payment would be made by the company to Narayanlal Bansilal. In other word s unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what we find is that the company by its reply, dated 17the July 1962 raised various disputed with regard to their liability of the said debt or containing that debt was not due to the joint family or Narayanalal and others but that it was due and payable to the four individuals from whom the company and purchased a sugarcane farm. Significantly enough, we may point out by Mr. Banaji has not even has-been stated b the 17th July 1962. In has nowhere been stated by the company in its reply that because of the manner in which the had notice has been given the company had been deprived of its right to the company to secure to compound for the debtors the reasonable satisfaction of the Court Receiver. It clear onto facts of the case that the under the conveyances a sum of Rs. Twenty - five lakh and odd was payable by the company to Narayanlal Bansilal and his sons. There is no dispute that the income tax lakhs of rupees were due and payable of Narayanalal Bansilal to the income tax authorities and in the at behalf debt in the thanes to the company had been attached by the Additional Income = tax officer. This fact is even referred to byte Court Receiver in this statutory notice. After re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yanalal Bansilal and the statement made by him in that affidavit would be relevant and by him it in that a taken into consideration by us. It cannot be forgotten that Narayanlal Bansilal was a chairman on the Board of Directors of the Harinagar sugar Mill Ltd. And was also he Karta and Manager of joint Hindu family consisting of himself, his sons and daughters. In view of the this dual position which Narayanalal Bansilal occupied at the material time the admission may by Narayanalal Bansilal in this affidavit which we have the quoted above would clearly which go to show that the amount of ₹ 25,00,000/- being the balance of purchase price and was payable by the company to the joint family of Narayanlal Bansilal and his sons and this admission of Narayanalal would go a long way to indicate of that the dispute raised by the company in its that behalf was not bona fide. On the other hand the contention raised by the company to say to lest was frivolous. (12) Mr. Banaji the urged that because of the prohibitory order and the attachment that had been levied by the Additional Income - tax officer on the debt claimed by the Court Receiver in his statutory notice the company was un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order had been issued on the company the company did not make any payment and therefore the presumption, will regard to the inability note part of the company to do duty would not arise because there was no neglect on the part of the company to make payment of the sum due. (13) In this benefit Mr. Banaji referred us to a decision of the English court in re European Banking Co. (1886) 2 Eq. 521. In that case several petition has been presented that for winding-up of the company and when all the other petitions had been dismissed the question was as to whether the petition which had been presented by a creditors who had only to recover pounce 65 from the Banking company should have bee accepted and winding-up order be made on the petition. The petitioning creditor was a creditor of banking company for the only pounds 65 and the debt and has been attached in Lord Mayors court and the question arose as to whether the petition on behalf of such creditor whose the petition or dismissed and the court dismissed the same Mr. Banaji relied upon the observation of Sir. R.T. Kindersley, V.C. which run as follows: The question then is, whether if there were no other petition then this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Bansilal and his sons. Further the most important distinguishing feature, the most important distinguishing feather statutory notice issued under section 434 the Court Receiver had in fact called upon the company to make payment to the income tax authorities for the purpose of liquidating the income -tax dues for non - payment of which the debt had been attached. If by statutory notice the Court Receiver had called upon the company to make payment of dues himself in spitted he attachment on that debt, the company would intuit case have been unable to comply with such requisition because of the attachment levied on that debt., due to the additional Collectors the Bombay for the purposes of liquidating the income - tax dues forth pose non = payment of which the attachment had been levied. In these circumstances it is difficult to accept Mr. Banaji contention it that because of subsisting attachment on the debt at the insane of the income tax authorities, the company was unable to comply with the requisitions contained in the statutory notice issued byte Court Receiver. On the other hand direct, compliances of the statutory notice would have resulted in the payment of the Income - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of share - holding in the company. But quite apart from this position, there could be no dispute that the company has failed and neglected to pay the debt that was claimed by the Receiver under a statutory notice during the preside period of 21 days and therefore a right undoubtedly accrued to the Court Receiver a creditor to a file winding-up petition against the company. Even apart from this debt, in the winding-up petition the Court Receiver has referred t several other debts which are due and payable by the company to the third parties. For instance there is a reference to debt to the tune of ₹ 8,00,000/- owned by the company to the Bank of India in respect whereof the Bank of India in had obtained a decree against the company and amongst several ground that have been forward be the Court Receiver in his winding-up petitioner there are principally two on which the petitioner was pressed, first that the company was unable to pay its debts and secondly it was just and equitable that the company should be wound. In this regard it would justice shaggy to the observations of chief Justice Chalga to in Bachharaj Factories Ltd v. Hirjee Mills Ltd. AIR1955Bom355 where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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