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N. Dharmalingam Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Case NumberO.S. Appeal Nos. 55 and 56 of 1976
Judge
Reported in[1979]49CompCas567(Mad); [1979]119ITR171(Mad)
ActsCompanies Act, 1956 - Sections 555(3) and 555(7)
AppellantN. Dharmalingam
RespondentUnion of India (Uoi) and ors.
Appellant AdvocateM.R. Krishnan, Adv.
Respondent AdvocateA.N. Rangaswami, ;Nalini Chidambaram and ;K. Swamidurai, Advs.
DispositionApplication dismissed
Cases ReferredUnion of India v. Hindu Bank Karur Ltd.
Excerpt:
company - liquidation - sections 555 (3) and 555 (7) of companies act, 1956 - company went into liquidation - proceedings for assessing company commenced - regional director passed order sanctioning payment of rs. 20542 to appellants - whether income-tax department entitled to have order of regional director as nullity - for payment of amount person can approach either court under section 555 (7) (a) or central government under section 555 (7) (b) - regional director under section 555 (7) (b) satisfied that when he passed order no application preferred by appellant to court under section 555 (7) (a) was pending - order passed by regional director valid - income-tax department not entitled to relief. - - 461/73 will have to fail. 8. the regional director, who was the 3rd respondent,.....ismail, j. 1. osa no. 55/76 arises out of company application no. 461/73, while osa no. 56/76 arises out of company application no. 421/74. the short facts which gave rise to these applications may now be stated :2. the hindu bank karur ltd., karur, went into voluntary liquidation and was taken up for winding-up on october 28, 1963. there were certain proceedings under the i.t. act for assessing the company and for the assessment year 1963-64, a sum of rs. 10,853.55 was assessed to be payable by the company by way of income-tax and super-tax. this liability became final till the stage of the income-tax appellate tribunal's order dated april 24, 1971. however, at the instance of the assessee, a reference was made to this court and the same was tc no. 6/73 [hindu bank karur ltd. v. addl......
Judgment:

Ismail, J.

1. OSA No. 55/76 arises out of Company Application No. 461/73, while OSA No. 56/76 arises out of Company Application No. 421/74. The short facts which gave rise to these applications may now be stated :

2. The Hindu Bank Karur Ltd., Karur, went into voluntary liquidation and was taken up for winding-up on October 28, 1963. There were certain proceedings under the I.T. Act for assessing the company and for the assessment year 1963-64, a sum of Rs. 10,853.55 was assessed to be payable by the company by way of income-tax and super-tax. This liability became final till the stage of the Income-tax Appellate Tribunal's order dated April 24, 1971. However, at the instance of the assessee, a reference was made to this court and the same was TC No. 6/73 [Hindu Bank Karur Ltd. v. Addl. CIT : [1976]103ITR553(Mad) ], and that ended against the assessee on April 25, 1975.

3. Meanwhile on August 18, 1964, the liquidator of the company filed in the office of the Registrar of Companies, a statement as required under the provisions of Section 555(3) of the Companies Act, 1956 (hereinafter referred to as 'the Act') stating that a sum of Rs. 20,542'50 was payable to one L. A. Lakshmanan Chettiaf, whose legal representative is the appellant before us, as surplus assets refundable to him in respect of 250 shares held by him in the bank. On November 30, 1973, the Regional Director of the Company Law Board (hereinafter referred to as the 'Regional Director'), passed an order sanctioning payment of Rs. 20,542.50 to the appellant herein. The Union of India represented by the CIT (Recovery), Madras, filed Company Application No. 461/73, purporting to be under Section 555(7)(a) of the Act for payment of a sum of Rs. 10,853.55 from out of the sum of Rs. 20,542.50 which was deposited by the liquidator of the company on August 18, 1964. Simultaneously, another application No. 462/73 was filed to restrain the Regional Director by interim injunction from sanctioning payment to the claimant of the whole or any part of the sum of Rs. 20,542.50 referred to already. It is not necessary to elaborately refer to the averments contained in the affidavit and the counter-affidavit of the parties in these applications and it is enough to point out that these applications were heard and orders were reserved. At the time of hearing of these applications, it would appear that a contention was advanced that so long as the order dated November 30, 1973, of the Regional Director stood, the income-tax department could not claim payment of the amount. In view of this, the income-tax department filed another application No. 421/74, purporting to be under Section 518(1)(a) of the Act for a declaration that the order dated November 30, 1973, of the Regional Director was a nullity. All these three applications finally came to be disposed of by Mohan J. [Union of India v. Hindu Bank Karur Ltd. : [1977]106ITR836(Mad) by the order dated August 5, 1975. The learned judge allowed Company Application No. 421/74 and set aside the order dated November 30, 1973, of the Regional Director and simultaneously allowed Company Application No. 461/73 for payment of the sum of Rs. 10,853'55 to the income-tax department, and directed payment of the balance of the amount to the claimant. It is against these orders, the two appeals have been filed before us by the claimant, namely, the person in whose favour the order dated November 30, 1973, was passed by the Regional Director.

4. It is admitted before us that the only amount that was available in the company liquidation account in the present case was the sum of Rs. 20,542.50 and, therefore, the income-tax department would be entitled to any payment out of that amount only if the order dated November 30, 1973, of the Regional Director directing payment of Rs. 20,542.50 in favour of the appellant is declared to be a nullity. In other words, only if the income-tax department succeeds in Company Application No. 421/74, any question will arise as to Company Application No. 461/73, and if the department fails in Company Application No. 421/74, admittedly Company Application No. 461/73 will have to fail. Consequently, we first take up the question as to whether the income-tax department was entitled to have the order dated November 30, 1973, of the Regional Director declared as a nullity in Company Application No. 421/74.

5. In the affidavit filed in support of this application it was stated by the TRO (Headquarters), Madras, that Application No. 461/73 was filed before this court on November 27, 1973, and as on the date of the said application, the application filed by the claimant before the Regional Director was pending and since the deponent of the affidavit was aware of the pendency of the application, he sent his inspector to both the Regional Director and the Registrar of Companies, Madras, to inform them personally of the filing by the department of the Company Application No. 461/73, before this court and the inspector informed them accordingly on the very same day, namely, November 27, 1973, and that the deponent of the affidavit confirmed this by a letter addressed to the Registrar of Companies with a copy marked to the Regional Director bearing the same date, which were despatched on November 28, 1973, by ordinary post and which in the regular course would have reached the 2nd and 3rd respondents (the Registrar of Companies & the Regional Director) on the same or the next day and there was no communication in reply from the Regional Director to the information conveyed by the inspector as aforesaid or his follow up letter. In para. 6 of the affidavit, the TRO put forward his case as follows :

'It subsequently transpired that on 30-11-1973, the 3rd respondent (Regional Director) had passed an order on the application of the 4th respondent (appellant) directing payment out to the 4th respondent of the whole of the amount of Rs. 20,542.50 in the company liquidation account. The said order was not passed either in the presence of, or after notice to the applicant, after calling for objections. Quite apart from any notice to the applicant, the 3rd respondent had passed the said order without verifying whether there was, even then, any Company Application pending before this honourable court under Section 555(7)(a) of the Companies Act with respect to the self same amount. If he had cared to make any such inquiry, he would have known about the filing of Company Application Nos. 461 and 462/73, by the applicant. But even without his having to make any inquiry himself, my inspector, as aforesaid had already informed the 3rd respondent in person about the matter as early as 27-11-1973 '.

6. In para. 11. of the affidavit, the deponent further stated that the Regional Director was under duty, himself, to ascertain from this court whether any application was pending at that time in this court under Section 555(7)(a) and the Regional Director had not cared to ascertain or satisfy himself about the pendency of any application pending in this court before proceeding to pass the impugned order dated November 30, 1973, in favour of the appellant.

7. The Registrar of Companies, Madras, filed a counter-affidavit in which he stated that from the extract filed by the liquidator before him under Rule 7 of the Companies Liquidation Account Rules, 1965, it was speci-fically stated therein that a sum of Rs. 20,542.50 was paid into companies liquidation account in the name of the contributory, namely, L.A. Lakshmanan Chettiar, and, therefore, the sum of money claimed by the income-tax department was not one available with the company in voluntary liquidation but the said amount was part of the amount kept in deposit with the Reserve Bank as being payable to the contributories who had not claimed the same in time.

8. The Regional Director, who was the 3rd respondent, filed an elaborate counter-affidavit putting forward several contentions on facts as well as law disputing the right of the department to claim the amount and to claim a declaration that his order dated November 30, 1973, was null and void. With regard to the specific case put forward by the income-tax department, the Regional Director stated in para. 6 of his counter-affidavit as follows t

' The petitioner who was made aware of the fact of the 4th respondent's application to me under Section 555(7)(b) of the Companies Act, 1956, had never made, any claim to me in respect of this amount and the question of my considering his claim did not arise. In fact, as early, as 23rd February, 1973, I caused a detailed letter to be written to the Commissioner of Income-tax, Madras-II, Nungambakkam, Madras-34, the facts about this claim pending before me. This was followed by 2 reminders on 10-4-1973 and 14-6-1973. Far from raising any objections by the income-tax department there was no response at all. I had, therefore, caused another detailed letter dated 30-7-1973, to be written to the Income-tax Officer, Company Circle, Trichy-1. In reply to this letter, the Income-tax Officer, Trichy, sent his letter dated 7-8-1973, to my office in which the attitude was as if the income-tax department never objected to the payment of this money to the claimant. The allegations in the circumstances in para. 4 of the affidavit are denied as false and incorrect. The petitioner was informed as early as 23-2-1973, about the pendency of the claim by the 4th respondent. Though there were subsequent reminders about the said claim, the petitioner never raised any objection regarding the claim made by the 4th respondent. The alleged oral representation said to have been made by the inspector of the petitioner to this respondent is purely imaginary and the alleged letter dated 27-11-1973, did not reach the office of this respondent before orders were passed in the claim petition made by the 4th respondent. The said allegation as to the oral representation made by the Inspector of the petitioner and also the despatch of the alleged letter dated 27-11-1973, appear to have been made with a view to lay the basis for assailing the order dated 30-11-1973, as if the same was passed after the claim of the petitioner was brought to the notice of this respondent. As already stated, no such thing was ever brought to this respondent nor can such a claim be made to the amount in question as the same, as already stated, has been impressed with the character of the money as being payable to the contributories.'

9. The income-tax department did not file any reply affidavit nor did it file any document nor was there examination of any witnesses. Consequently, the applications were proceeded with before the learned judge on the basis of affidavits and counter-affidavits only. Before the learned judge, it would appear that several points have been urged, such as (i) the amount in the company liquidation account did not form part of the asset of the company, but was earmarked to the particular contributory and, therefore, the income-tax department cannot lay a claim to that amount; (ii) the Regional Director was not aware of the pendency of any application before this court at the instance of the income-tax department and, therefore, the order of the Regional Director cannot be assailed.

10. As far as these appeals are concerned, it is not necessary to consider the first point urged before the learned judge for the simple reason that the appellant is entitled to succeed and the income-tax department has to fail on other grounds. In view of the fact that the averment contained in the affidavit filed on behalf of the income-tax department was disputed in the counter-affidavit of the Regional Director it was the duty of the income-tax department to make out its case, by examining witnesses or producing documents or summoning the Regional Director to submit himself to cross-examination with reference to the averments contained in the counter-affidavit. None of these things was done before the learned judge. As we have pointed out already, no reply affidavit was also filed on behalf of the department. With regard to the oral information said to have been conveyed through the inspector of the department, the inspector himself had not filed any affidavit and all that the TRO stated in his affidavit was that he sent his inspector to both the Registrar of Companies and the Regional Director to inform them personally of the filing of Company Application No. 461/73 and the inspector informed them accordingly. Company Application No, 461/73 itself was presented to this court on November 27, 1973, and was taken on file and numbered on November 29, 1973, and the court issued notice to the 3rd respondent only on November 30, 1973. Under these circumstances, we have to proceed on the basis that the Regional Director did not know that Company Application No. 461/73 was pending on the file of this court when he passed orders on November 30, 1973. Let us now refer to the relevant statutory provisions against the background of which the controversy in this case has to be decided. It is Section 555 of the Act which deals with payment of unclaimed dividends and undistributed assets to be made into the Companies Liquidation Account. Section 555(1) reads:

' (1) Where any company is being wound up, if the liquidator has in his hands or under his control any money representing --

(a) dividends payable to any creditor which had remained unpaid for six months after the date on which they were declared, or

(b) assets refundable to any contributory which have remained undistributed for six months after the date on which they became refundable, the liquidator shall forthwith pay the said money into the public account of India in the Reserve Bank of India in a separate account to be known as the Companies Liquidation Account.'

11. Sub-section (2) of Section 555 makes a similar provision for payment into the said account any money representing unpaid dividends or undistributed assets in his hands at the date of dissolution. Sub-section (3) is important and it states :

' (3) The liquidator shall, when making any payment referred to in Sub-sections (1) and (2), furnish to such officer as the Central Government may appoint in this behalf, a statement in the prescribed form, setting forth, in respect of all sums included in such payment, the nature of the sums, the names and last known addresses of the persons entitled to participate therein, the amount to which each is entitled and the nature of his claim thereto, and such other particulars as may be prescribed.'

12. The form itself has been prescribed under the Companies (Court) Rules, 1959, and the form is No. 159. The heading of the form is 'Statement of unclaimed dividends or undistributed assets, paid under Section 555(1) and (2) into the Companies Liquidation Account in the Reserve Bank of India (to be furnished under Section 555(3))', The form prescribes particulars separately for unclaimed dividends paid into the Companies Liquidation Account in the Reserve Bank of India and undistributed assets paid into the Companies Liquidation Account in the Reserve Bank of India. With regard to the particulars of unclaimed dividends, the form provides for the number on list of creditor, name of the creditor, last known address of the creditors date of declaration of dividends, rate of dividend, amount of dividend payable, last date when payable and the amount paid into the account. With regard to the particulars of undistributed assets, the form provides for all the above details in respect of a contributory.

13. Sub-section (7) of Section 555 is in two parts. Clause (a) of that sub-section provides :

' Any person claiming to be entitled to any money paid into the Companies Liquidation Account (whether paid in pursuance of this section or under the provisions of any previous companies law) may apply to the court for an order for payment thereof, and the court, if satisfied that the person claiming is entitled, may make an order for the payment to that person of the sum due :

Provided that before making such an order, the court shall cause a notice to be served on such officer as the Central Government may apppint in this behalf, calling on the officer to show cause within one month from the date of the service of the notice why the order should not be made.'

14. Clause (b) reads :

' Any person claiming as aforesaid may, instead of applying to the court, apply to the Central Government for an order for payment of the money claimed ; and the Central Government may, if satisfied whether on a certificate by the liquidator or the official liquidator or. otherwise, that such person is entitled to the whole or any part of the money claimed and that no application made in pursuance of clause (a) is pending in the court, make an order for the payment to that person of the sum due to him, after taking such security from him as it may think fit. '

15. Section 637 of the Act enables the Central Government to delegate any of its powers or functions under the Act to the Company Law Board, subject to certain limitations mentioned therein. Under GSR No. 71 dated January 1, 1966 and published in the Gazette of India dated January 8, 1966, in exercise of the powers conferred under Section 637 the Government delegated the power under Clause .(b) of Sub-section (7) of Section 555 to the Regional Directors of the Company Law Board at Bombay, Calcutta, Madras and Kanpur. It is only in view of this that the claimant applied for payment of the amount to the Regional Director and the Regional Director passed the order on November 30, 1973. The Regional Director before passing the order has to satisfy himself that such person is entitled to the whole or any part of the amount claimed and that no application made in pursuance of Clause (a) was pending in court. In this case, we have already referred to the counter-affidavit filed by the Registrar of Companies stating that when the Regional Director made a reference to him he had intimated to him about the statement made by the liquidator and the amount in question being due to L. A. Lakshmanan Chettiar. Therefore, the Regional Director satisfied himself that the amount in question was due to the claimant in the case. With regard to his satisfaction that no application made in pursuance of Clause (a) was pending in the court, we have already referred to the averments of the Regional Director contained in his counter-affidavit to the effect that from February, 1973, onwards, he had been writing to the CIT as well as the ITO as to the claim that has been preferred before him and his not having any response from them, but on the other hand, his having received a letter from the ITO, Tiruchirapalli, on August 7, 1973, in which the attitude was as if the income-tax department never objected to the payment of the money to the claimant. Even according to the income-tax department there was no application pending before the court under Section 555(7)(a) except Application No. 461/73 which the department presented before this court on November 27, 1973, which was numbered and taken on file on November 29, 1973, and we have already dealt with the controversy whether the Regional Director has notice of the same or not, when he passed the order in question, on November 30, 1973. Under these circumstances, it cannot be contended that the Regional Director acted in violation of the requirements of Section 555(7)(b).

16. Mr. A. N. Rangaswami, the learned counsel for the income-tax department, contended that it was the duty of the Regional Director to have ascertained from this court whether any application was pending on the file of this court or not. However, to a specific question put by us, the learned counsel had to admit that the statute itself had not imposed any such obligation on the Regional Director but stated that prudence would have dictated to him to have ascertained from this court whether any application was pending or not. We are unable to accept any such suggestion. The Regional Director was functioning under a statute and he was expected to dischage only those obligations which the statute imposed on him. If the officers in the income-tax department were not prudent enough to make their claim earlier or to file an application earlier in spite of the communication of the Regional Director sent to the CIT and the ITO, we are unable to appreciate how the department can contend that as a matter of prudence the Regional Director should have taken the initiative and written to this court to find out whether any application was pending or not.

17. Mr. Rangaswami placed considerable stress on the extract from the counter-affidavit of the appellant filed in Company Application No. 461/73 referred to by the learned judge himself in his order. The said extract is as follows : [1977]106ITR836(Mad) :

' On 21-11-1970, the 2nd respondent (Registrar of Companies) sent another reminder to the liquidator of the 1st respondent-bank that settlement of my claim is pending and the liquidator may furnish the necessary certificate for payment out from the company's liquidation account. On 25-11-1970, the liquidator sent a reply stating that the appeal proceedings in respect of income-tax relating to the bank was still pending and hence he was unable to comply with the direction. After several reminders, the 3rd respondent (Regional Director) sent a communication to me dated 10-8-1971, enclosing a copy of the letter written by the liquidator of the 1st respondent-bank to the effect that the appeal was dismissed by the Income-tax Appellate Tribunal and the Appellate Tribunal itself referred the matter by way of further reference to the High Court on 24-7-1971, and until matters reached a finality in the High Court, the certificate called for cannot be furnished.

On 20-10-1971, I wrote to the 2nd respondent that since the liquidator was not in a position to issue the certificate, at least 80% of the value of the shares may be paid over to me. On 28-16-1971, the 2nd respondent sent a reply stating that unless the necessary certificate was issued by the liquidator no payment could be made and the liquidator in his communication dated 27-9-1971 stated that the income-tax proceedings have not reached a finality.'

18. We are of the opinion that the above statement contained in the counter-affidavit of the claimant did not in any way affect the order of the Regional Director dated November 30, 1973. Section 555(7)(b) states that the Central Government can be satisfied either 'on a certificate by the liquidator or the official liquidator or otherwise' thereby making it clear that the satisfaction of the Central Government need not necessarily be on the basis of a certificate to be granted by the liquidator and can be 'otherwise' also. From the extract in the counter-affidavit of the appellant all that could be stated was that the liquidator refused to give a certificate on the ground that the income-tax liability had not yet been finally determined. That may merely put the Regional Director on notice of an income-tax liability remaining outstanding, if at all, but certainly that cannot prevent the Regional Director from satisfying himself that the particular amount in question was due to the appellant. Mr. Rangaswami repeatedly contended that in view of his reference to the income-tax proceeding it was the duty of the Regional Director to have written to the income-tax department to find out whether they proposed to file an application for payment under Section 555(7)(a) or not. We are unable to appreciate this argument because no such duty has been cast upon the Central Government under Section 555(7)(b) of the Act. Consequently, in this case, the requirement that the Regional Director should satisfy himself that the claimant was entitled to the amount in question and that no application made in pursuance of Clause (a) was pending in court, has been complied with. As a matter of fact, there was no controversy that the appellant was entitled to the amount in question and the entire argument proceeded only with reference to the other requirement--that the Regional Director should satisfy himself that no application made in pursuance of Clause (a) of Section 555(7) was pending in court. It is only with regard to that requirement we have held, with reference to the averments contained in the affidavit and counter-affidavits, that the Regional Director was satisfied that no application made in pursuance of Clause (a) was pending in court.

19. Independent of the above conclusion, we are of the opinion that the income-tax department has to fail on another ground also. The entire argument before the learned judge and the arguments advanced before us on behalf of the income-tax department proceeded on the basis that the reference to an application made under Section 555(7)(a) of the Act pending in a court contained under Section 555(7)(b) was, on the facts of this case, to Company Application No. 461/73 filed by the income-tax department under Section 555(7)(a) of the Act. In our view, on a proper construction of Section 555(7), such a contention is not warranted. A reading of Section 555(7)(a) and (b) will lead to the conclusion that they are alternative, in the sense that a person can approach the court for payment of the amount under Section 555(7)(a) or he can approach the Central Government under Section 555(7)(b) for the same relief. The proviso to Section 555(7)(a) makes it clear that even when a person makes an application to the court, notice must issue to the officer appointed by the Central Government and he must be heard. In order to give a simpler remedy to a person who claims the money, Parliament alternatively enabled him to straightaway approach the Central Government for payment of the amount. It is only against this background, we have to find out what was contemplated by the expression in Section 555(7)(b), namely, 'no application made in pursuance of clause (a) is pending in the court '. The question for consideration is whether that expression refers to any application made by anybody to the court or it refers to an application made to the court by the person who has made the application to the Central Government. Simply, as a matter of understanding, the purpose for which the above provision has been made, we do not see any purpose being served in holding that the expression refers to 'any application by anybody made to. a court under section 555(7)(a)'. On the other hand, the object of this provision is that the same person simultaneously should not pursue two remedies--one before the court under Section 555(7)(a) and the other before the Central Government under Section 555(7)(b). It must be remembered that the amounts paid into the companies liquidation account represent unclaimed dividends and undistributed assets, that is, amounts already declared payable to particular persons as dividends and amounts already became refundable as assets to particular con-tributories and not yet actually paid. If the amount constituted the common fund of the company in liquidation, distributable among several persons, pro rata or in accordance with some scheme of preference, different considerations will come into play as all these claims against the company may have to be pooled and satisfied out of the common fund. In such a case, the satisfaction of the claim of one, without ascertaining what the other claims are, may adversely affect the persons having such other claims and, therefore, the authority sanctioning the payment must satisfy itself that no other claim is pending. But the position is entirely different with regard to the. claims against the amount in the companies liquidation account because each can be paid the amount due to Mm independently, without in any way affecting the right of others to receive the amounts due to them and the only precaution that has to be observed is that a person does not make a double claim, one before the court and the other before the Company Law Board, the delegate of the Central Government. Consequently, what the Central Government has to satisfy itself under Section 555(7)(b) is that the person who made the application for payment to the Central Government had not already made an application for the same purpose to a court under Section 555(7)(a) and such application was not pending. We reach this conclusion simply as a matter of construction of Section 555(7) as well as the intendment of the statutory provision.

20. We are fortified in this conclusion by the rules made by the Central Government themselves. The Central Government have made rules called the 'Companies Liquidation Accounts Rules, 1965' in exercise of the powers conferred by Sub-section (3) of Section 555 read with Sub-section (1) of Section 642 of the Act, These rules provide for, among other things, the procedure to be followed when an application is made to the Central Government under Section 555(7)(b). Rule 9(3) states:

' The application received by the Central Government shall be sent to the Registrar of Companies concerned who shall verify from his records and certify whether the claimant is entitled to the money claimed by him and whether, according to the records with the. Registrar, no application from the claimant is pending in any court for payment of the money.' (Underlining ours).

Thus, in our opinion, this rule correctly gives effect to the intention of Parliament as contained in Section 555(7)(b).

There is another form which also leads to the same conclusion. It would be seen that under Section 555(7)(b) there is a provision for the Central Government taking such security from the claimant as it may think fit. Pro forma of an indemnity bond in this behalf has been prescribed by the Central Government and one of the recitals therein states :

' And whereas the principal party or any other person on his behalf has not made an application in any court for any order for payment of the said sum of Rs..........and no such application is pending in any court of law in the Union of India.'

21. From all these circumstances, we are clearly of the opinion that the duty cast upon the Regional Director under Section 555(7)(b) of the Act in this case was to satisfy himself that at the time when he passed the order on November 30, 1973, no application preferred by the appellant to a court under Section 555(7)(a) was pending. In this case, it was nobody's case that the appellant had filed any application under Section 555(7)(a) before any court for payment of the amount in question.

22. Under these circumstances, there is absolutely no justification for holding that the order dated November 30, 1973, of the Regional Director was a nullify. In view of this, we allow O.S.A. No. 56/76 and set aside the order of the learned judge dated August 5, 1975, and dismiss Company Application No. 421/74. As pointed out already, once the income-tax department loses in Company Application No. 421/74 it has no case in Company Application No. 461/73 because admittedly the only amount available with the Regional Director was Rs. 20,542.50 and if the order of the Regional Director dated November 30, 1973, directing payment of that amount to the appellant stands, there will be no amount available with the Regional Director to pay the income-tax department. Consequently, the income-tax department will not be entitled to an order in its favour in Company Application No. 461/73. Therefore, O.S.A. No. 55/76 is also allowed and Company Application No. 461/73 also will stand dismissed. There will be no order as to costs.


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