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1973 Supreme(Cal) 238

HIGH COURT OF CALCUTTA
SABYASACHI MUKHERJI
UNITED BANK OF INDIA - Appellant
Versus
TATANAGAR FOUNDRY CO. LTD. - Respondent
Suit 463  Of  1971
Decided On : AUGUST 27, 1973

Notice under Section 80 of the Code of Civil Procedure is not necessary in a suit against the Official Liquidator of a company in liquidation, as the suit is against the company and not against the Official Liquidator in respect of an act done by him in his official capacity.

Headnote:

COMPANIES ACT, 1956 - SECTION 80 OF THE CODE OF CIVIL PROCEDURE - SUIT AGAINST OFFICIAL LIQUIDATOR - NOTICE UNDER SECTION 80 - WHETHER NECESSARY - WHETHER OFFICIAL LIQUIDATOR IS A PUBLIC OFFICER - WHETHER SUIT IS IN RESPECT OF ACT DONE BY OFFICIAL LIQUIDATOR IN HIS OFFICIAL CAPACITY.

Fact of the Case:

The United Bank of India filed a suit against Tatanagar Foundry Co. Ltd. (in liquidation) for a decree against the company for a sum of Rs. 15,43,437.79, interest at the agreed rate, and a declaration that all plant and machinery, goods, and movable assets mentioned in Part I and their book debts and bills mentioned in Part II of annexure-E of the plaint are charged and hypothecated in favor of the plaintiff bank. The plaintiff also filed an application for the appointment of a Receiver in respect of the charged and hypothecated properties.

Finding of the Court:

The court held that notice under Section 80 of the Code of Civil Procedure was not necessary in this case as the suit was not against the Official Liquidator in respect of any act done by him in his official capacity. The court also held that the Official Liquidator was a public officer, but the suit was against the company in liquidation and not against the Official Liquidator as such.

Issues: 1. Whether notice under Section 80 of the Code of Civil Procedure is necessary in a suit against the Official Liquidator of a company in liquidation? 2. Whether the Official Liquidator is a public officer within the meaning of Section 80 of the Code of Civil Procedure? 3. Whether the suit is in respect of an act done by the Official Liquidator in his official capacity?

Ratio Decidendi: 1. Section 80 of the Code of Civil Procedure is mandatory and requires that no suit shall be instituted against Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months' notice, as mentioned in the section. 2. The Official Liquidator of a company in liquidation is a public officer within the meaning of Section 80 of the Code of Civil Procedure. 3. A suit against a company in liquidation, represented through the Official Liquidator, is not a suit against the Official Liquidator in respect of an act done by him in his official capacity.

Final Decision: The court dismissed the application for the appointment of a Receiver. The court also directed the Official Liquidator to make an inventory of the plants and machinery, goods, movable assets mentioned in Part I of Annexure E and the properties mentioned in part II of Schedule C.

SABYASACHI MUKHARJI, J.

( 1 ) THIS is a suit filed on 8th November, 1971 by the United Bank of India. This application is an application for appointment of Receiver in respect of properties alleged to be charged and hypothecated in favour of the plaintiff bank by Tatanagar Foundry Co. Ltd. prior to its liquidation. Tatanagar Foundry Co. Ltd. is now in liquidation and has been sued through the Official Liquidator. The plaintiff claims in this suit a decree against the said company for a sum of Rs. 15,43,437. 79, interest at the agreed rate and declaration that all plant and machinery, goods and movable assets mentioned in Part I and their book debts and bills mentioned in Part II of annexure-E of the plaint are charged and hypothecated in favour of the plaintiff bank and certain other incidental reliefs. As mentioned hereinbefore, this is an application for appointment of receiver and sale of these goods. There are several defendants to whom reference need not be made except the added defendant viz. defendant No. 17 being National Iron and Steel Co. who claims to be the owner of the leasehold property in which the plants and machinery, which are alleged to be charged in favour of the plaintiff bank, are situate. The application was resisted on various grounds. The first ground of opposition to this application was that there has been non-compliance of Section 453 of the Companies Act, 1956. The said section states that the receiver shall not be appointed on any assets in the hands of liquidator except by or with the leave of the Court. I am unable to sustain this objection. As this is an application to the Court which appointed the liquidator, this application, in my opinion, for appointment of receiver by this Court is a competent one.

( 2 ) THE next objection raised by counsel on behalf of respondent No. 17 was that this suit was incompetent inasmuch as no notice under Section 80 of the Code of Civil Procedure had been given prior to the institution of this suit. Section 80 of the Code of Civil Procedure is explicit and mandatory in its terms and provides that no suit shall be instituted against Government or against a public officer in respect of any act purporting to be done by such public officer in hit official capacity, until the expiration of two months notice, as mentioned in the section. Counsel for the respondent No. 17 contended that the suit was against the Official Liquidator and was also in respect of act done by him in his official capacity. Therefore, notice under Section 80 was mandatory and imperative in this case. Reliance was placed on provisions of Sections 488, 451, 452, 457 and 445 (3) and 446 of the Companies Act, 1956 for the proposition that the Official Liquidator was a public officer and the property of the company being in his custody as custodian and the suit being in respect of that property this is in respect of the acts done by him in his official capacity. It was further submitted that even in respect of future acts notice under Section 80 of the Code of Civil Procedure was necessary and reliance was placed on the decision in the case of Union of India v. Baijnath. In support of that proposition, counsel for respondent No. 17 drew my attention to several decisions to which I shall briefly refer. It, how-ever, appears to me that Official Liquidator can legitimately be described as a public officer as contemplated under Section 80 of the Code of Civil Procedure in terms of Section 2 (17) (d) as well as Sub-section (17) (h) of the said section. But the Official Liquidator is in custody of the property of the company and the suit of this nature in its true perspective, in my opinion, is a suit against the company and is not against the Official Liquidator as such. That would be clear by a reference to Section 446 of the Companies Act, 1956 and the relevant rules of the Company Court Rules being Rules 115 and 118. Therefore, though it is true that the Official Liquidator is a public officer the s




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