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In Re: Indo Burma Wood Products (P) Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberApplication in Company matter
Judge
Reported inAIR1968Cal198
ActsCompanies Act, 1956 - Sections 137, 448, 449, 456, 456(1A) and 456(1B) and 463; ;Companies (Court) Rules - Rule 233
AppellantIn Re: Indo Burma Wood Products (P) Ltd.
Advocates:S.B. Mukherjee, amicus curie
Cases ReferredDr. Sailendra Nath Sinha v. The State
Excerpt:
- p.b. mukharji, j.1. a very important question arises on this application for direction by the official liquidator in the company matter re indo burma wood products (p) ltd.2. before setting out the point for determination, it will be appropriate to give the context of facts. by an order dated february 3, 1965, this company was directed to be wound up and the official liquidator of this court was appointed the liquidator. this company is a tenant in respect of premises nos. 20-a and 20-b, jora bagan street and no. 42, haralal das lane, calcutta. the registered office of the company was situated at 42 haralal das lane. by a conveyance dated june 16, 1965 the owners of premises no. 42 haralal das lane sold and conveyed the said premises to sm. chandra devi daga, sm. mohini devi daga and sm......
Judgment:

P.B. Mukharji, J.

1. A very important question arises on this application for direction by the Official Liquidator in the company matter Re Indo Burma Wood Products (P) Ltd.

2. Before setting out the point for determination, it will be appropriate to give the context of facts. By an order dated February 3, 1965, this company was directed to be wound up and the Official Liquidator of this Court was appointed the Liquidator. This company is a tenant in respect of premises Nos. 20-A and 20-B, Jora Bagan Street and No. 42, Haralal Das Lane, Calcutta. The registered office of the company was situated at 42 Haralal Das Lane. By a conveyance dated June 16, 1965 the owners of premises No. 42 Haralal Das Lane sold and conveyed the said premises to Sm. Chandra Devi Daga, Sm. Mohini Devi Daga and Sm. Radhadevi Kothari of No. 2A Netai Halder Street, Calcutta. Out of these three premises the Official Liquidator, after several attempts, obtained possession of one room only in premises No. 42, Haralal Das Lane, Calcutta as also the entire premises of 20B, Jorabagan Street, Calcutta. The Official Liquidator states that by reason of pendency of a stay application he could not take possession of premises No. 20A, Jorabagan Street, Calcutta and the remaining portion of premises No. 42, Haralal Das Lane, Calcutta. The said application, was subsequently dismissed by this Court by an order dated December 12, 1966. By an order dated September 7, 1965, leave was granted to the Liquidator to surrender the tenancy standing in the name of the company in respect of these three premises. In terms of that order the Official Liquidator made over possession of the said room in premises No.42 Haralal Das Lane. Calcutta to the persons mentioned above. The Official Liquidator has since been informed by these persons, viz. the ladies mentioned above, that Sri Mohabir Prosad Jalan, a shareholder of the company who was occupying a number of rooms in the said premises No. 42 Haralal Das Lane, Calcutta, had put the said rooms under lock and key after removing all the belonings therefrom except a telephone apperatus.

3. The Official Liqudator by his letter dated March 13, 1967 under registered post wrote calling upon Sri Mohabir Prosad Jalan of Nos. 1A and 1B, Baishnab Sen Street, Calcutta to make over the said roomsand the telephone within 7 days from the date of the letter and also warned him that in the event of non-compliance, the Official Liquidator would take steps. This registered letter of the Official Liquidator was acknowledged by Mohabir Prosad Jalan but he has failed to comply with the requisition contained therein.

4. The present application by the Official Liquidator is to obtain an order from this Court to break open the padlocks for taking over possession of the rooms at 42 Haralal Das Lane, Calcutta.

5. The Assistant Registrar of Companies of this Court in his office note has drawn attention to the provision of Section 456 of the Companies Act and has expressed the view that there should be no order on this application in view of that section.

6. I asked the Official Liquidator whether any order has been made previously on this point by the Companies Court explaining the position in law. Except an order of U.C. Law J. without any judgment and dated 19th July, 1960, the Official Liquidator could not find any other order made by this Court. The order of U. C. Law does not help it, the matter because that was made before the amendment is sub-sections (1-A) and (1-B) had been introduced in Section 456 of the Companies Act.

7. The significant point for determination in this application is whether this Court should grant leave to the Official Liquidator to break open the locks put in the rooms of premises No. 42 Haralal Das Lane, Calcutta for taking over possession thereof in view of Section 456 of the Companies Act and specially in view of Sub-sections (1-A) & (1-B) thereof.

8. The real short point is whether an order, for use of force, to break open the lock should be made by the Presidency Magistrate or the District Magistrate as provided in sub-sections. (1-A) and (1-B) of Section 456 of the Companies Act or by this Court. The main debate is confined to the controversy that where a statute prescribes a particular procedure and a particular remedy, for an institution like the Official Liquidator who is entirely a creature of statute, then is he confined only to the remedy and procedure which the Statute creates or can he even that invoke the general powers of the Court. In other words does the residual jurisdiction of the Court yield to the express specific remedy prescribed by the statute. This question, therefore, leads to the consideration and interpretation of the previsions of Section 456 and its amendments in Sub-sections (1-A) and (1-B).

9. Section 456(1) of the Companies Act provides that where a winding up order has been made, the Liquidator shall take into his custody or under his control all the properties, effects and actionable claims to which the company is or appears to be entitled. There to no dispute that the liquidator in such a case shall take into his custody or under his control all the properties, affects and actionable claims of the company under order of liquidation.

10. The controversy, however, begins with Sub-sections (1-A) and (1-B) of Section 456 of the Companies Act which were introduced by the 1960 Amendment Act and they are as follows:

'(1-A). For the purpose of enabling the Liquidator, or the Provisional Liquidator, as the case may be, to take into his custody or under his control, any property, affects or actionable claims to which the company is or appears to be entitled, the Liquidator or the Provisional Liquidator, as the case may be, may by writing request the Chief Presidency Magistrate or the District Magistrate within whose jurisdiction such property, effects or actionable claims or any books of account or other documents of the company may be found, to take possession thereof and the Chief Presidency Magistrate or the District Magistrate may thereupon after such notice as he may think fit to give to any party, take possession of such property, effects and actionable claims, books of account end other documents and deliver possession thereof to the Liquidator or the Provisional Liquidator.'

'(1-B). For the purpose of securing compliance with the provisions of sub-section (1-A), the Chief Presidency Magistrate or the District Magistrate may take or cause to be taken such steps and use or cause to be used such force as may in his opinion be necessary.'

11. These are the amendments which were introduced to the Companies Act by Clause 156 of the Amending Bill of 1960.

12. I shall also refer to Sub-section (2) of Section 456 of the Companies Act which provides as follows:

'All the property and effects of the Company shall be deemed to be in the custody of the Court as from the date of the order for the winding up of the company.'

13. The reason for my drawing attention to Sub-section (2) of Section 456 of the Companies Act is that it has been argued on this point that the Liquidation Court is the ultimate Court of custody and control and therefore, has all the residuary and ancillary jurisdiction to deal with any matter dealing with liquidation of the company concerned. On that basis it has been argued that even though there is an express provision in the statute for giving to Magistrate's Court powers for using force, that does not mean or take away or qualify this Court's right to order the Liquidator to use force and break open the padlock in the process of the Liquidator's obtaining possession under the orders of this Court.

14. Actually there is no decision on this particular statutory provision in Section 456(1-A) and (1-B) of the Companies Act. The words'custody and control' and its corresponding sections under the previous Companies Act have come up for consideration. In Re. Maha Laxmi Cotton Mills Ltd. reported in : (1960)ILLJ468Cal , I had occasion to discuss at pages 33 and 34 of that report (Cal WN) = (at pp. 200 of AIR) the nature of a Liquidator's custody where I was considering Section 178(2) of the old Companies Act (corresponding to Section 456(2) of the Companies Act 1956). I expressed the view there as follows.

'A liquidator is a statutory custodian of the property and effects of the company directed by an order of the Court to be wound up under the Companies Act............ This provision means that the Official Liquidator is the statutory custodian although Sub-section (2) of Section 178 (corresponding to Section 456(2) of the Companies Act 1956) provides that such property and effects shall be deemed to be in the custody of the Court. That is only a notional interest. That notional interest in jurisprudence begins from the date of the order of winding up. But the actual custody or control under Section 178(1) of the old Companies Act (or Section 456(1) of the Companies Act 1956) is given to the Official Liquidator and he is directed to take into his custody or control the property and effects and actionable claims of the company. No doubt, the Court exercises control over the Liquidator; but that is only a supervisory control, but the actual executive and the custodian remains the liquidator............'

15. The Privy Council also had occasion to decide the matter in Ripon Press and Sugar Mill Co. Ltd v. Gopal Chetti, reported in . There, Lord Blanesburgh at p. 11 observed as follows:

'In point of law, under Section 178(2) of the Act, the Company's assets were then constructively in the custody of the Court, and it is quite clear that no disposition of them by the contributories could be regular '

16. The possession of the Court, therefore, was described by the Privy Council as 'constructive possession '

17. Form 52 under the Company Rules, 1959, under Company Rule 111 in clause (2) directs in so many words: 'That the Official Liquidator do, as Liquidator of the Company aforesaid forthwith take charge of all the property and effects of the said company'. To the same effect is Company Rule 114 which provides:--

'On a winding up order being made, the Official Liquidator attached to the Court shall forthwith take into his custody or under his control all the property and effects and the books and papers of the company, and it shall be the duty of all persons having custody of any of the properties books and papers of the company, to deliver possession thereof to the Official Liquidator.'

18. It will thus be seen that both the order for winding as wall as the Forms and Rules prescribe the same duty and give the tame direction.

19. Mr. H. K. Ganguli, the Official Liquidator, therefore, submits that these orders of the Court are executable as decrees because in Section 482 of the Companies Act it is expressly said:--

'Any order made by a Court for, or in the course of winding up a company shall be enforceable at any place in India other than that over which such Court has jurisdiction, by the Court which would have had jurisdiction in respect of the company if its registered office had been situate at such other place, and in the same manner in all respects as if the order had been made by that Court'

It is, therefore, submitted by him that an order for winding up with a direction for taking over possession is enforceable and executable as such. Section 634 of the Act provides in addition that- 'Any order made by a Court under this Act may be enforced in the same manner as a decree made by the Court in a suit pending therein.'

20. The next step in the arguments of Mr. Ganguli, the Official Liquidator, is that these liquidation orders being enforceable as decrees under the C. P. C use of force can necessarily be invoked under such provisions in the Civil Procedure Code as Order 21. Rule 35(3) where in connection with the decree for immoveable property it is laid down:

'Where possession of any building or enclosure is to be delivered and the person in possession being bound by the decree, does not afford free access, the Court, through its officers, may, after giving reasonable warning and facility to any woman not appearing in public according to the customs of the country to withdraw remove or open any lock or bolt or break open any door or do any other act necessary for putting the decree-holder in possession.'

21. By virtue of these provisions in Sections 634 and 482 of the Companies Act read with Order 21 Rule 35(3) of the Civil Procedure Code and on the strength of the reasons mentioned above the Official Liquidator submits that this Court can order the liquidator to break open the door and the padlock pursuant to the order of this Court directing him to take possession and in implementation thereof The Official Liquidator in support of his argument also marshalls in support of his arguments, Rule HA of Chapter 17 of the Original Side Rules which says:--

'A decree-holder, praying for police help in execution of a decree, shall apply before a Judge in Chambers by petition, supported by an affidavit, stating therein whether such help is required--

(i) because of apprehension of violence or obstruction from the judgment-debtor himself; or

(ii) because of conditions of general character such as the locality where execution will have to be levied, being in a disturbed state or a class of people similarly situated being likely to make a common cause with the judgment-debtor and resist execution.'

22. The arguments put forward by the Official Liquidator have great force. Mr. 8. B. Mukherjee, learned counsel who appeared as amicus curiae in this matter raising the question of the liquidator's right to use force and break open doors and padlocks and enter into private houses, has very ably placed the relevant authorities and law on the goint. Mr. Mukherjee has mentioned the upreme Court decision in Manohar Lal Chopra v. Hiralal : AIR1962SC527 to which it would not be necessary to make any detailed reference

23. Mr. Mukheriee has, however, drawn my attention to the origin and history of how sub-sections (1-A) and (1-B) of Section 456 of the Companies Act and how they came into the Statute Book. According to him the first recognition of a similar principle was made in the Banking Companies Ordinance, later incorporated in Section 45E of the Banking Companies (Amendment) Act, 1950 and subsequently enshrined in Section 45S of the Banking Companies Act. No doubt sub-section (3) of Section 45S introduced by the Banking Law Miscellaneous Provisions Act, 1963 (Act 55 of 1963) has almost an identical ring as in sub-sections (1-A) and (1-B) of Section 456 of the Companies Act with some variations because it says there:- 'For the purpose of securing compliance with the provisions of Sub-section (1-A) the Chief Presidency Magistrate or the District Magistrate may take or cause to be taken such steps and use or cause to be used such force as may in his opinion be necessary'. Sub-section (2) of that Act also is comparable to sub-section (1-A) of Section 456 of the Companies Act. Mr. Mukherjee also has placed before me the Rules under the Banking Companies Act, made by this Court, specially Rule 64 in Appendix 7A of the Original Side Rules of this Court where it is expressly provided as follows-

'Whenever the Liquidator of any Banking Company wants to make a request to the Chief Presidency Magistrate or any District Magistrate under the provisions of Section 45S of the Act and in doing so he finds it necessary to send such letter through the Registrar he shall submit the same together with a duplicate thereof to the Registrar The Registrar may thereupon countersign the original and forward the same to the District Magistrate at the cost of the Bank and shall keep the duplicate with the records of the proceeding of trip bank '

24. It is noteworthy that no similar rule has been made under the Companies Act in connection with the Official Liquidator. The whole point of Mr. Mukherjee's argument in this branch has been that originally the Companies Act, 1956 did not have the provisions like sub-sections (1-A) and (1-B) of Section 456 of the Companies Act, but they were introduced later on by amendment in 1960 which followed in the wake and pattern of the banking Companies Statutory provisions.

25. In this connection Mr. Mukherjee relied on a decision of the Punjab High Court at Delhi in S. Raghuvir Singh v. District Magistrate, Delhi, reported in (1964) 34 Com Cos 25 (Punj) which lays down that:

'The object of Section 45S of the Banking Companies Act, 1949, is to enable the District Magistrates to assist the liquidators in taking charge of the property of a banking company in liquidation and its very terms appear to indicate that it is only intended to be applied in the case of movable property.' This case, however, does not touch the point that I have to decide. Besides the provision of the Banking Companies Act are in some respect different from that of Section 456 of the Companies Act in so far as it uses the words 'shall forward them to the official Liquidator or the special officer.'

26. The main difficulty in this case in accepting without qualification the argument advanced on behalf of the liquidator is that if the liquidator in such a case after the introduction of sub-sections (1-A) and (1-B) in Section 456 of the Companies Act is allowed to come to this Court for using force and breaking open locks of closed doors then these two sub-sections providing access to the Magistrate's Court will become complete dead letter. If this Court in overall charge of liquidation has to deal with such applications, then no liquidator will conceivably go to the Magistrate's Court under subsections (1-A) and (1-B) of Section 45R of the Companies Act.

27. The principle is well recognised and settled. 1 shall now consider some of these basic principles. No doubt Section 456 in Sub-sections (1-A) & (1-B) of the Companies Act uses the word 'may' which should normally be construed as permissive, yet 'may' is sometimes considered as 'must' and the question, therefore, is whether it should be so done in these sub-sections (1-A) and (1-B). To construe them as purely permissive would certainly make them dead letter as I have already indicated. Where there is statutory procedure for a statutory creature like the Official Liquidator the word 'may1 can appropriately be construed as a little more compelling and in appropriate context the word 'may' in such circumstances can be read as 'must' or near 'must'.

28. In this connection the Report of the Companies Act Amendment Committee published by the Government of India. New-Delhi 1957 shows the origin of these sub-lections (1-A) and (J-B) of Section 456 of theCompanies Act This report in its paragraph 168 says:

'It was represented by an official liquidator that considerable difficulty was experienced by him in reducing to his possession the books, papers, properties and assets of the Company. Sub-section (2) might be numbered as Sub-section (3) and the following might be inserted as Sub-section (2).' What followed thereafter is the exact replica or a reproduction of the present sub-sections (1-A) & (1-B) of Section 456 of the Companies Act. The report says that because one official liquidator in the whole of India had represented that 'considerable difficulty' was experienced, therefore, it suggested the amendment. The report does not say what those difficulties were and is wholly silent about them. On the contrary, the Official Liquidator here before me in this Court has argued that there is usually considerable delay in the Magistrate's Court for the very simple reason that the Magistrate is busy with hundreds of other criminal cases and that this Court always is speedier because this liquidation Court is exclusively assigned to be in charge of liquidation of companies, and matters in connection therewith. This is one of the examples what hasty legislation does on a point which should have required much more thought than what has been given to it by these amendments.

29. The problem has become acute, complex and perplexing. The debate is, who has the jurisdiction - the Magistrate's Court or this Liquidation Court. Are such Courts concurrent in their power or jurisdiction on this point and in case they are, what is going to be the solution in case of conflict; are Magistrate's orders reversible by the Criminal Court in revision in this High Court and if so, this High Court's criminal revision Court may be in conflict with this High Court's liquidation Court. These are extremely difficult questions of great legal niceties and technicalities.

30. The other principle of law is clear that where in such a statute creating a dtay no special remedy is prescribed for enforcing performance of such duty or punishing its neglect, the Court certainly as a general rule will presume that ordinary remedies were intended to be applied. It has been said in Craies on Statute (6th Edn. p. 230):

'The general rule of law' (or rather of construction) 'is that where a general obligation is provided by statute and a specific statutory remedy is provided, that slatutory remedy is the only remedy.'

The leading decision is on Taylor v. Taylor where Jessel. M. R made his celebrated observation in 1876-l Ch D 426 at p. 431. The principle of 1R76-1 Ch D 426 was recognised and approved by the Privy Council in Nazir Ahmed v. King Emperor reported In 83 Tnd App 372-(AIR 1938 PC 253 (2)) where Lord Roche enunciated the same principle at page 381 of that report (Ind App)-(at p. WT ofAIR). Other high authorities are also quoted in Crales on Statute Law, Sixth Edition at page 230 such as the Institute of Patent Agents v. Joseph Lockwood, 1894 AC 347 and Bairaclough v. Brown, (1897) AC 615. The Supreme Court in India has also followed the similar view as in State of Uttar Pradesh v. Singhara Singh reported in : [1964]4SCR485 .

31. Whether the statutory procedure to use force and to implement the process of the Official Liquidator's taking possession, 'as laid down under Section 456 (1-A) and (1-B) of the Companies Act, is the only remedy or whether the Official Liquidator can still come to this Liquidation Court under the residuary jurisdiction, conferred by sub-section (2) of Section 456 of the Companies Act providing that all the property and effects of the company shall be deemed to be in the custody of the Court as from the date of the winding up order of the company depends on the construction of the relevant sections of the Companies Act quoted above and also on the nature and character of liquidator's function and duties, which It will be necessary now to examine.

32. I shall clear a preliminary misconception that the Official Liquidator is exactly like a receiver appointed by the Court. This analogy stems from Rule 233 of the Companies (Court) Rule which is as follows:

'For the discharge by the Official Liquidator of the duties imposed by sub-section (1) of Section 467 and the last preceding rule (Rule 232), the Official Liquidator shall, for the purpose of acquiring and retaining possession of the property of the company be in the same position as if he were a receiver of the property appointed by the Court, and the Court may on his application enforce, such acquisition or retention accordingly.'

33. The preceding Rule 232 of the Companies (Court) Rule lays down that the duties imposed on the Court by Section 4!i7(l) with regard to the collection of the assets of the company and the application of the assets in the discharge of the company's liabilities shall be discharged by the Official Liquidator and officer of the Court, subject to the control of the Court and to the proviso in Section 643(2) of the Companies Act. The position of the Official Liquidator and that of the Receiver of a Court may be analogous but it will be wrong to assume that they are exactly similar in the first place, a Receiver is appointed by the Court and is removable by the Court. There is option in the Court to appoint the personal of the Receiver. The Official Liquidator's position under the Companies Act is materially different in this respect. There is no specific provision in the Companies Act for the removal of the Official Liquidator by the Court The Official Liquidator apparently can be removed only tinder Section 463 and that removal is also not by the Court but by the Central Government. Analysing the provisions of the Companies Act I do not find any provision or any section which gives the Court power to remove the Official Liquidator. It is also significant that in Section 449 of the Companies Act the Statute provides that: 'On a winding up order being made in respect of a company, the Official Liquidator shall, by virtue of his office, become the liquidator of the company ' That indicates that whenever a winding up order is made the Court has no option in the choice of the liquidator as it used to have formerly under the old Companies Law or as it still has in the appointment of a receiver in an ordinary suit. Here by a Statute it is expressly provided that the Official Liquidator shall by virtue of his office alone become the liquidator of a company. Tins Official Liquidator is appointed under Section 448 of the Act by the Central Government and attached to each High Court.

34. On behalf of the Official Liquidator it has been contended on this point that under Section 460(4) of the Companies Act the liquidator may apply to the Court in the manner prescribed, if any for directions in relation to any particular matter arising in the winding up. By virtue of this provision and on the strength of it, the Official Liquidator argues that this Court can always order breaking open of a lock to help the liquidator to secure possession which has already been directed in the order for wind-Log up. There is a great deal of force in this argument. But the point again is whether this general right of a liquidator to apply to the Court for direction covers the exact field mentioned in Section 456 (1-A) and (IB) of the Act. On the doctrine of generatia specialibus non derogant, if a specific field is covered by a specific provision in the Statute that should normally override a general power which does not express this specific power covered by this specific provision. Although this doctrine applies as between different Statutes the principle applies to the construction of the different sections and their scope in the same Statute. If that were not so, the sections in a Statute will be not only overlapping but conflicting and sometime difficult to apply and administer.

35. Section 457 of the Companies Act describes the powers of the liquidator in sub-section (1) it describes the liquidator's powers which can be exercised only with the sanction of the Court. Among such powers is the power to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the- name and on behalf of the company. This again I consider has to be read subject to Section 456(1-A 1 and (1-B) of the Companies Act where the Statute straightaway gives power of the liquidator to apply in writing to the magistrate in cases mentioned there Sub-section (2) of section 457 describes the liquidators power which need not he with the sactuib of the Court to begin with. However, by Sub-section (3) of Section 457 a general provision is made station that the exercise by the liquidator in a winding up by the Court of any of the power conferred by Sub-section (1) or (2) of section 457 shall be subject to the control of the Court. A new right is given in section 457(3) of the Companies Act to any creditor or contributory to apply to the Court in respect of the exercise or the proposed exercise of any of the powers by the liquidator conferred by this section. Section 458 of the Act also ansures that even if the Court permits exercise of any of the powers referred to in Section 457(1) of the Act without the sanction or intervention of the Court, there also the exercise of such powers by the liquidator shall be subject to the control of the Court. It is to these ultimate powers and residuary control in the Liquidation Court that an appeal is made to justify this application and to seek the order to break open the lock in the present case

36. The entire process of winding up of a company by the Court is provided by Part VII of the Companies Act and in particular by Chapter II thereof. The Official Liquidator, his powers, scope and functions are described in a series of sections from 448 to 463 in this Chapter II of Part VII of the Companies Act. These are followed by what are called 'general powers of Court in case of winding up by Court' and covered by sections 466 to 481. In this last group of sections there is the section 480 of the Companies Act providing 'any powers conferred on the Court by this Act shall be in addition to, and not in derogation of any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums,' This saving of existing powers does not expressly or impliedly refer to any power in this Court to override the express provision of section 456 (1-A) and (1-B) of the Companies Act.

37. The question, therefore, still persists, namely, whether the new amendment introduced by sub-sections (1-A) and (1-B) of section 456 of the Companies Act prescribes that the only court where the Official Liquidator can apply is the court of the magistrate mentioned there for the purpose of enabling the liquidator to take into custody or under his control any property of a company The Courts are jealous of their powers and jurisdictions and are reluctant to part with their control and jurisdiction over the liquidator who is also an officer of this court and who works under the control and direction of the Liquidation Court. To permit other Courts to interfere in the process of winding up may be to introduce a division of responsibility and function not conducive to proper and efficient administration of the winding up of a company At the same time for reasons good or bad Parliament has thought fit on a report which I have quoted above to introduce that amendment in the Statute and effect must have to be given to this amendment. No construction should, therefore be put upon this amendment as to make It a dead latter. If the liquidator being an officer working under the control of the Liquidation Court is given the choice to come to this Court always for using force or for helping him to take possession then the whole of the amendment embodied in sub-sections (1A) and (IB) of section 456 of the Companies Act will become an absolute dead letter. Some harmony in construction is, therefore, a desirable course. The question is what is that harmony in construction in the present case.

38. No doubt the principle after the Privy Council decision in 63 Ind App 372 at p. 381 - (AIR 1936 PC 253 (2) at p. 257) is well settled that:

'Where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all.' Judicial decisions have sought to put a rider on this principle. One is that this principle is applicable only where one power Is given and has no application were more powers than one are conferred. On that basis of reason it has been held that if a statute contains provisions giving more than one power, then the rule in (1876) 1 Ch D 428 cannot be applied so as to take away the powers conferred by anyone of these provisions. In other words this rider in interpretation upon the principle enumerated by the Privy Council in Nazir Ahmed's case, 63 Ind App 372= (AIR 1936 PC 253 (2)) is that, unless a statute in express words or by necessary implication lays down that one power is to the exclusion of the other then both the remedies are open to the authorities and they could resort to anyone of them at their option. The support for this view can be had from the two Supreme Court decisions in Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority. Aurangabad : [1960]3SCR177 and in the State of Kerala v. C. M Francis & Co. : [1961]3SCR181 .

39. There are two decisions of the Court of Appeal here to which I was a party and to which attention has been drawn by the arguments at the bar. One is HemanRa Coomar Mukherjee v. M. C. Chakravarty, reported in : AIR1952Cal732 under the Banking Companies Act and the other is Dr. Sailendra Nath Sinha v. The State : AIR1955Cal29 under the old Companies Act, where at pages 41, 42 I had occasion to observe as follows:--

'In my opinion Ss. 179 (a) and 237(1) of the Companies Act are not exclusive of each other in respect of persons against whom prosecution can be launched and the one is not to be considered with reference to the other in respect of persons who can be prosecuted. They belong to different levels of statutory powers operating in different fields. In Section 179(a) of the Companies Act the liquidator shall have the power to prosecute with the sanction of the Court where as in Section 237(1) it is the Court winding up the Company who can direct the liquidator to prosecute. One is the liquidator's power which may be exercisable with the sanction of the Court and the other is the Court's power to direct the liquidator to do a particular act. Therefore the fact that under Section 237(1) of the Act the Court can direct the liquidator to prosecute a Director, manager officer or member of a Company cannot mean that the liquidator cannot prosecute them under Section 179(a) of the Companies Act independently of Section 137(11) thereof'

On the basis of the Supreme Court's decision quoted above and the decision of the Court of appeal here it is possible, therefore, to hold in certain exceptional cases that concurrent remedies are available before different authorities for the same purposes. It is not a construction which is to be lightly adopted. But it can be done in an appropriate case. That is the law as I understand it in the light of the decisions which I have discussed above.

40. In the light of the above reasons and authorities, I shall now endeavour to Eormulate my conclusion. My interpretation is as follows: The liquidator must normally follow the procedure prescribed in section 456 of the Companies Act in reducing the property of the company to hl' custody or control. For these purposes the Official Liquidator may by writing request the Magistrate mentioned in Sub-section (1-A) of Section 456. The Magistrate under sub-section (1-A) of Section 456 is under express statutory obligation to assist the liquidator. He is also expected to follow the procedure of giving notice as he may think fit to any Darty. This provision requiring the Magistrate to give notice is a guarantee that such order is made after appropriate consideration of affected interests, a procedure which is not normally adopted in the iquidator's application for directions before this Court where such orders are usually obtained ex parte. The next normal procedure for the liquidator is provided in subsection (1-B) of Section 456 of the Companies Act which authorises the Magistrate for the purpose of securing compliance with the provisions of Sub-section (1-A) to take or cause to be taken such steps and use or cause to be used such force as may in Magistrate's opinion be necessary Obviously breaking open of a lock comes within the use of 'force' mentioned in Sub-section (1-B) of Section 456 of the Companies Act. Now that is the normal procedure. To the Court of this Magistrate therefore, the official liquladator should normally repair and not comtstraightaway to this Court as a liquidation Court for breaking open locks of closed doors.

41. The next part of my interpretation is this. That this normal procedure prescribed under sub-sections (1-A) & (1-B) of Section 456 of the Companies Act does not completely override the residual and the jurisdictional control of this Liquidation Court under the Companies Act, not only as the Court in legal custody of all the property, effects and processes of administration for winding up but also as being the Court in overall and overriding supervisory authority to use that the winding up of the company is properly administered and that the possession, custody, control and the administration of the property and assets of the company are truly and effectively carried out. I therefore adopt the construction which will preserve the final access to this Court even in the matter where the liquidator faces any difficulty for taking possession due to closed doors

42. But then if the liquidator wants the assistance of this Court in such a matter which is covered by sub-sections (1-A) and (1-B) of Section 456 of the Companies Act he should give special reasons circumstances and grounds for not approaching the Magistrate and for not following the procedure laid down and prescribed by Sub-sections (1-A) and (1-B) of Section 456 of the Companies Act.

43. Such a construction in my judgment leads to harmony. It gives effect to the amendment introduced in sub-sections (1-A) and (1-B) of Section 456 of the Companies Act, and at the same time does not take away the ultimate right of this Court as the liquidation court, to see that its order for possession under the winding up order is not nullified by any extraneous process or authority.

44. I would, therefore, direct the official liquidator in ordinary and normal cases to follow the procedure prescribed in Section 456(1-A) of the Companies Act and in special and extraordinary cases with stated special reasons to come to this court for help and assistance. As there is no special ground made in this case why the liquidator should not RO to the Magistrate under Section 456(1-A), I make no order on this application and direct the official liquidator to follow the procedure prescribed by statute in Sub-section (1-A) of Section 456 of the Companies Act in the facts of this case.

45. The Official Liquidator will retain the coats of this proceeding out of theassets in his hand.


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