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State Vs. Official Liquidator - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKerala High Court
Decided On
Case NumberCourt Fee Reference No. 1 of 1956
Judge
Reported inAIR1957Ker17
ActsBanking Companies Act, 1949 - Sections 45D; Code of Civil Procedure (CPC) , 1908 - Order 3, Rule 4
AppellantState
RespondentOfficial Liquidator
Appellant Advocate M.U. Issac, Govt. Pleader
Respondent Advocate K.N. Parameswaran Pillai, Asst. Liquidator; V.G. Bhaskaran Nair and;
Excerpt:
- .....to the company in liquidation including the prosecution of claims against debtors shown in the list filed in court under section 45-d and no separate vakkalathnama is issued by the liquidator in favour of such attorneys at any stage after the issue of such appointment letter.5. it follows therefore that the engagements concerned must be estimated with reference to the number of lists filed by the courtliquidator before the high court for purpose ofsettlement and no question of the number of debtors or claims comprised in the list can affect thematter. it must follow similarly that so far asthe debtor is concerned, the question must depend upon the number of lists in which he isincluded and not upon the number of claims madeagainst him under particular list. that is to say,just as no.....
Judgment:
ORDER

Varadaraja Iyengar, J.

1. The office has raised the question whether the various claims covered by a singel list of debtors of a Banking Company which is being wound up should not each be treated as a separate suit and separate Vakkalaths diretced to be filed by the Advocate appearing for the Court Liquidator and similarly whether an Advocate appearing for a debtor against whom several claims are made under a single list should not file separate Vakkalaths for each of the claims.

2. The office note relies upon Rule 18 of the Rules under the Banking Companies Act to say that each claim petition has to be treated as an 'expedited suit' and that each claim must therefore be taken as a separate suit, for which separate Vakkalath has to be filed. Learned Assistant Liquidator would take the other extreme and say that because there is only one Banking Company Liquidation list only one engagement by the Liquidator can toe held to be necessary.

3. But, in my judgment, neither view is correct. For, what the High Court is concerned with under Section 45 D Clause (1) of the Act is to settle a list of debtors however numerous the debtors comprised in the list may be, and such lists are front time to time to be settled on application made by the Official Liquidator. The number of claims covered by the list as against particular debtors and covered by the list is important only from the point of view of the issue of notices to the persons affected for the inquiry to toe conducted thereon. The ultimate order is only a single one passed under Clause (3) of the section settling the list of debtors. The matter is made further clear by Clause (4) which provides that at the time of settlement of any such list the High Court shall pass an order for payment of amount due by each debtor, it seams to me therefore that importance should not be attached to the facts that the individual claims are in the nature of suits against the debtors concerned or that a number of such claims are comprised in a single list and may necessitate large number of inquiries.

4. It would appear that the practice followed on the Original Side of the Calcutta High Court is that only one warrant of Attorney in respect of each list is required on the analogy of the application by a Bank for 'balance order' against the defaulting contributories, even though the application contains a number of claims of the Bank against the several contributories and prayer is made therein for payment orders against such contributories. The practice in Bombay would also appear to he that the firm of Solicitors appointed by the Liquidator with the sanction of the Company Judge appears before the Court to prosecute all proceedings in relation to the Company in liquidation including the prosecution of claims against debtors shown in the list filed in Court under Section 45-D and no separate Vakkalathnama is issued by the liquidator in favour of such Attorneys at any stage after the issue of such appointment letter.

5. It follows therefore that the engagements concerned must be estimated with reference to the number of lists filed by the CourtLiquidator before the High Court for purpose ofsettlement and no question of the number of debtors or claims comprised in the list can affect thematter. It must follow similarly that so far asthe debtor is concerned, the question must depend upon the number of lists in which he isincluded and not upon the number of claims madeagainst him under particular list. That is to say,just as no separate Vakkalath need be filed inrespect of each claim contained in a single list,separate Vakkalaths need not be filed by theAdvocate appearing for the defendant in each ofthe claims under the same list.


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