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S.P. Subbiah Vs. Pr. Pr. Sp. Periakaruppan Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Case NumberCompany Application No. 28 of 1966
Judge
Reported in[1967]37CompCas270(Mad)
ActsIndian Companies Act, 1913 - Sections 156; Companies Act, 1956 - Sections 426; Companies (Court) Rules, 1959 - Rules 239, 240 and 241
AppellantS.P. Subbiah
RespondentPr. Pr. Sp. Periakaruppan Chettiar and ors.
Advocates:G. Vasantha Pai, Adv. for the third party-mortgagee;S.M. Amjad Nainar, Adv.
Cases ReferredPars Ram Brij Kishore v. Jagraon Trading Syndicate. No
Excerpt:
.....from date of order - as per rules 240 and 241 liquidator not entitle to any interest prior to order of court giving leave to him to make call - held, direction to pay interest on unpaid calls can arise only with order made by court enabling official liquidator to call for such unpaid calls. - - this is the rule of law which has been precisely laid down by the division bench of the lahore high court in pars ram brij kishore v......that each contributory do, on or before the.........dayof.................. 19....... pay to the official liquidator............the amount duefrom such contributory in respect of such call.' 9. it is only after such an order is made by the company court that the official liquidator has the power to enforce the call and ask for an order for payment of the call amount due from the contributory. forms nos. 106 and 108 appended to the companies (court) rules, 1959, read with rules 240 and 241 make it very clear that the liquidator is not entitled to any interest prior to the order of this court giving leave to him to make a call. this is the rule of law which has been precisely laid down by the division bench of the lahore high court in pars ram brij kishore v. jagraon trading syndicate......
Judgment:
ORDER

ED that leave be given to the official liquidator to makea call of Rs.................. per share on all the contributories of the saidcompany............

And it is ordered that each contributory do, on or before the.........dayof.................. 19....... pay to the official liquidator............the amount duefrom such contributory in respect of such call.'

9. It is only after such an order is made by the company court that the official liquidator has the power to enforce the call and ask for an order for payment of the call amount due from the contributory. Forms Nos. 106 and 108 appended to the Companies (Court) Rules, 1959, read with rules 240 and 241 make it very clear that the liquidator is not entitled to any interest prior to the order of this court giving leave to him to make a call. This is the rule of law which has been precisely laid down by the Division Bench of the Lahore High Court in Pars Ram Brij Kishore v. Jagraon Trading Syndicate. No doubt, this was under the Indian Companies Act, 1913 (VII of 1913). But I do not see any reason why this principle of law as laid down by the learned judges of the Lahore High Court be not made applicable even under the provisions of the (Indian) Companies Act, 1956 (I of 1956).

10. I am therefore of the view that a direction to pay interest on unpaid calls can arise simultaneously and concurrently only with the order to be made by this court enabling the official liquidator to call for such unpaid calls. Such a liability being a new one created by statute, it is reasonable that interest should also be made payable only from such date when the court directs the liquidator to make a call; otherwise it would lead to an anomaly. In fact, it is because of the statute that a liability which has become barred is resurrected. If interest were to be allowed from any date earlier than the date of this court, as company court, authorising the official liquidator to make a call, then it would virtually mean that interest would be payable on a debt which is barred and which is not enforceable in the eye of law ; but the principal alone would be due by virtue of the supervening winding up proceedings. It will lead to an absurdity if the claim of the liquidator for interest, as in this case, were to be upheld. In order to harmoniously interpret the intention of the legislature in creating a new statutory liability, it is but proper and indeed compelling that interest should be allowed only from the date when the order for call is issued to the liquidator.

11. I, therefore, direct that that the liquidator be entitled to make a call for the payment of the unpaid call money from all the respondents to this application together with interest at 4 per cent, per annum from the date of this order till the date of realisation.

12. In view of the undertaking given in the mortgage suit, O. S. No. 38 of 1958, on the file of the court of the subordinate judge of Chingleput by the erstwhile directors of the company and in view of the present applicant's averment in the reply affidavit that he has no objection to collect the money and deposit the same in this court and for the third party mortgagee herein being paid out the same, I also direct that as and when the moneys are so collected by the liquidator and paid to the credit of this application, the moneys so collected and deposited by the liquidator may be paid out to the third party mortgagee and in part satisfaction of the mortgage decree obtained by the third party mortgagee in O.S. No. 38 of 1958 on the file of the court of the subordinate judge, Chingleput.


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