PRABHU Vs. AMEERUL MILLATH

JUDGEMENT

(1.) Whether an Official Liquidator appointed as liquidator of a particular Company in winding up proceedings can be proceeded under S.543(1) of the Companies Act is the main question to be decided in this case. The first respondent in this case who was the Official Liquidator, High Court of Kerala was the liquidator of M/s. Mittal Steels Perolling Industries (P) Ltd. which was a company in liquidation as per the court order. M.C.A. Nos. 94/95 and 29/96 were filed by the appellant herein against the respondents under S.543(1) of the Companies Act. The learned Company Judge found that the applications against the first respondent who is the Official Liquidator will not lie and the applications are not maintainable. Therefore preliminary objections were upheld and M.C.As were dismissed as not maintainable. Before considering the reasoning of the Learned Company Judge, we will extract S.543(1) of the Companies Act below:

(2.) The above section provides that in the course of winding up if any person who has taken part in the promotion or formation of the company or any past or present director, manager, liquidator or officer of the company has misapplied any money or property of the company or has been guilty of any misfeasance or breach of trust, then such persons can be proceeded upon for misapplication, retainer, misfeasance or breach of trust. The next part of the section provides who are competent to file application under the above section. Application can be filed by the Official Liquidator or Liquidator or any creditor or contributory, made within the time specified in sub-s. (2). Therefore, it is clear that an Official Liquidator or Liquidator or any creditor or contributory can file an application under the section. The last part of the section indicates that on such application court can take action against such director, manager, liquidator or officer aforesaid and take action against them in respect of misapplication, retainer, misfeasance or breach of trust. The learned Judge found that in the first part and the last part only the word liquidator is mentioned, whereas for filing an application, in the second part Official Liquidator was specifically mentioned. Therefore, Official Liquidator can file an application under the section. But complaint cannot be filed against the Official Liquidator, but only against a liquidator and it is also held that specifically the name of Official Liquidator is not mentioned in the first part or the last part. But that is only used for enabling an Official Liquidator to file an application and therefore no action can be taken against the Official Liquidator. Only a liquidator other than the Official Liquidator can be proceeded under the section. Learned Judge also noticed that under S.457 of the Companies Act complaints can be filed against the Official Liquidator and therefore if there is any complaint against the Official Liquidator proper remedy is to file an application under S.457(3) of the Companies Act and not under S.543. It was also noticed by the learned Judge that Official Liquidator is acting under the supervision and control of the Court and he is appointed by the Central Government for the High Court and he is standing on a special footing and Official Liquidator should be differentially treated than the liquidator. With regard to the contention that even if Official Liquidator is not specifically included in the 1st and last parts of definition, he will come in the category of officer, the learned Judge found that the liquidator, officer etc. are specifically mentioned in the section and therefore under the term officer. Official Liquidator will not come especially considering the inclusive definition of officer under S.2(30) of the Companies Act.

(3.) We may now consider how the Official Liquidator is appointed. S.448 of the Companies Act provides how the Official Liquidator is appointed. S.448(1)(a) reads as follows: