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1967 Supreme(Cal) 75

HIGH COURT OF CALCUTTA
P. B. Mukharji
INDO BURMA WOOD PRODUCTS (P) LTD. - Appellant
Versus
STATE OF WEST BENGAL - Respondent
Application In Company Matter .   Of  .
Decided On : APRIL 24, 1967

Advocates Appeared:
S.B.Mukherji

The liquidator should normally 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.

Headnote:

COMPANIES ACT - WINDING UP - POSSESSION OF COMPANY'S PROPERTY - PROCEDURE FOR TAKING POSSESSION - SECTIONS 456(1-A) AND (1-B) OF THE COMPANIES ACT, 1956 - INTERPRETATION - WHETHER THE LIQUIDATOR CAN APPLY TO THE COURT FOR DIRECTIONS TO BREAK OPEN LOCKS OR WHETHER HE SHOULD FOLLOW THE PROCEDURE PRESCRIBED IN SECTIONS 456(1-A) AND (1-B) - HELD, THE LIQUIDATOR SHOULD NORMALLY FOLLOW THE PROCEDURE PRESCRIBED IN SECTIONS 456(1-A) AND (1-B) BUT IN SPECIAL AND EXTRAORDINARY CASES WITH STATED SPECIAL REASONS, HE CAN COME TO THE COURT FOR HELP AND ASSISTANCE.

Fact of the Case:

The Official Liquidator of a company sought an order from the court to break open the padlocks for taking over possession of the rooms at 42 Haralal Das Lane, Calcutta. The Assistant Registrar of Companies had drawn attention to the provision of Section 456 of the Companies Act and had expressed the view that there should be no order on this application in view of that section.

Finding of the Court:

The court held that the liquidator should normally 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.

Issues: Whether the liquidator can apply to the court for directions to break open locks or whether he should follow the procedure prescribed in Sections 456(1-A) and (1-B) of the Companies Act, 1956.

Ratio Decidendi: The court interpreted Sections 456(1-A) and (1-B) of the Companies Act, 1956 and held that the liquidator must normally follow the procedure prescribed in Section 456 of the Companies Act in reducing the property of the company to his 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. However, this normal procedure does not completely override the residual and the jurisdictional control of the Liquidation Court under the Companies Act.

Final Decision: The court directed 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.

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 rooms and 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) and (1-B) thereof.

( 8 ) THE real short point is whether an order






































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