P C POTHEN Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) These are applications for relief brought under S.633(2) of the Companies Act, 1956, the first by the voluntary liquidator of a banking company, the last by the Official Liquidator as liquidator of an ordinary company, and the remaining five by the same person in his capacity as Court Liquidator in charge of the liquidation of five banking companies. The liability they have incurred and from which they want relief is that in sub-s.9 of S.555 of the Act for breach of sub-s.(1) of the section.

(2.) The unclaimed dividends have all been paid by now into the Companies Liquidation Account but not within the time allowed by sub-s.(1) of S.555. Meanwhile, in the case of the voluntary liquidator the money was lying in a bank to the credit of the company concerned earning interest for it, and, in the case of the Court Liquidator, in the public account so that the default in the case of the Court Liquidator was merely the omission to transfer the money from one account to another. In the case of the Official Liquidator, the money was lying to the credit of the company in a dividend account opened in a bank as required by the rules. In none of the cases did the liquidators derive any benefit from the money retained, or retain it for any time with themselves, so that there can be no question but that they acted honestly. On the question whether they acted reasonably, I am satisfied that their default was due to mere inadvertence It is no doubt a matter for regret that they were not more vigilant in the discharge of their duties, and the default is not the more commendable because they are professional men, both of them being lawyers. But the Companies Act is by no means a short or simple enactment. Its provisions are numerous and complicated, and there is so much that a liquidator has to do that I think it is quite possible for a liquidator, even if he exercises reasonable care, to commit a default like the present through sheer oversight; especially so since it prejudices nobody and results in no benefit to himself. The position taken by the Registrar who opposes these applications, that every default in respect of a statutory duty, whatever be the circumstances of the case, necessarily means that the person concerned has not acted reasonably, seems to me very extreme and I do not regard Alexander Thomson Montgomery v. The Registrar of Joint Stock Companies, West Bengal, ILR 1955 (2) Calcutta 439, as authority for the proposition. To say so would be to defeat the very object of S.633. I think these cases are cases where I should, if I could, excuse the petitioners and leave them with nothing more than the admonition implied in these very proceedings.

(3.) The Registrar has taken the objection that a liquidator is not an officer of the company that is being wound up, and that therefore S.633 can have no application to him. My attention is drawn to the definition of, officer in S.2(30) of the Act, and it is pointed out that a liquidator finds no mention there. But then the definition is an inclusive definition, so that, if according to the ordinary meaning of the term a liquidator can be regarded as an officer of the company, the definition cannot have the effect of excluding him. My attention is next drawn to S.192(7), 485(2) and 501(2) of the Act which expressly provide that for certain purposes a liquidator shall be deemed to be an officer of the company. But the argument that this implies that he is not an officer for any other purpose is a kind of argument that has always been viewed with caution. If we turn to S.493(3), we find it saying, every officer of the company (including every liquidator or continuing liquidator) who is in default which certainly implies that a liquidator is an officer of the company in the ordinary sense of the term. And in S.621(3) we find the express disclaimer, A liquidator of a company shall not be deemed to be an officer of the company within the meaning of sub-s.(1). If the contention based on the deeming provision in S.192(7), 485(2) and 501(2) is to be accepted, then by parity of reasoning, the disclaimer in S.621(3) should mean that for all purposes other than that of S.621(1), a liquidator is an officer of the company.