C K PATEL AND S S TAMBE OFFICIAL LIQUIDATORS BARODA BATTERIES CO LTD Vs. REGISTRAR OF COMPANIES AHMEDABAD

JUDGEMENT

(1.) This appeal is directed against the order of the learned District Judge Baroda rejecting the application made by the applicants for granting relief fore the default under sec. 244(b)(7) read with sec. 281 of the Indian Companies Act 1913 hereinafter referred to as the old Act.

(2.) The facts giving rise to this appeal briefly stated are as under. The Baroda Batteries Limited which was registered as a Company under the Indian Companies Act was ordered to be wound up under the supervision of the court before the Indian Companies Act 1956 (hereinafter referred to as the New Act) came into force. M/s. S. S. Tambe and C. K. Patel practising Advocates in Baroda Courts were appointed Official Liquidators. In the statement of accounts submitted for the year 1962-63 to the Registrar of Companies it was found that Rs. 892-73 were lying on hand of the Official Liquidators. According to the Registrar this amount being in excess of Rs. 500.00 the Liquidators had contravened the provisions of sec. 244(a) of the old Act. He therefore demanded penalty interest at the rate of 20% from 31-3-1963 to 17-1-1964 from the Liquidators. The Registrar of Companies also alleged that a breach of the provisions under sec. 244(B) of the old Act was committed by the Liquidators inasmuch as unclaimed amount of dividend amounting to Rs. 952-84 was not deposited by them in the Reserve Bank of India. According to the Registrar the aforesaid sum of Rs. 952-84 should have been deposited by the Liquidators immediately after expiry of six months from 20-2-1961 that is after 20-8-1961 according to sec. 244 (B) of the old Act and therefore under sub-sec. (7) of sec. 244B of the old Act the liquidators had become liable to pay penal interest on the aforesaid sum from 21-8-1961 to 17-1-1964 at the rate of 20% per annum. The applicants therefore preferred an application under sec. 281 of the old Act for relieving them from the penalty imposed by the Registrar of Companies. The grounds stated in the application inter alia were that the Liquidators were not conversant with the correct position in law and that on many occasions their own money was spent for the purpose of winding up of the company. It was pointed out by them that under sec. 244-A of the old Act the liquidators were required to pay money received by them into the schedule bank as defined in clause (c) of sec. 2 of the Reserve Bank of India Act 1924 Their contention was that the amount of Rs. 892-73 was kept by them on hand because they had to pay Rs. 700.00 to M/s. Vakil Shah and company the auditors and Mr. P. H. Thakore the accountant. As they could not obtain the order of the court the money had remained with them. However they slated that they had also spent money form their own pocket which would be clear that in all they had spent about Rs. 1000.00 which they got back from the company after a very long time without any interest. They also contended that though by an order of the court they were entitled to-a remuneration of Rs. 488.00 since the company had no balance they could receive only Rs. 280.00 towards their remuneration. They stated that they paid Rs. 15.00 to the Registrar of Companies as filing fee from their own pocket. They therefore contended that by returning the balance they had not made any profit out of the aforesaid amount and they had not committed any breach of the provisions of sec. 244-A of the old Act and if at all they had committed the breach it should be condoned.

(3.) So far as the second objection raised by the Registrar about the amount of unclaimed dividend not being deposited in the Reserve Bank within six months after the expiry of six months from 20-2-1961 they stated that they were under the bona fide impression of law that the amount of unclaimed dividend had to be deposited at the time of disso- lution of the company. They had tried their best for a long to trace and contact the creditors or claimants under the directions of the court to make their dues available to them. They admitted that they have acted wrongly but they contended that they had acted honestly and reasonably in both the matters complained of. Notice was issued to the Registrar of Companies who resisted the said application. It was contended by the Registrar that the old Act was repealed and therefore sec. 281 of the old Act does not survive and the application given by the applicants under sec. 281 of the old Act was misconceived and not tenable in law. In the alternative it was urged that assuming that sec. 281 of the old Act applied no relief under that section should be granted to the liquidators because the Official liquidator cannot be said to be the officer of the company and therefore no relief should be granted. The learned Judge accepted the contentions of the applicants so far as retention of the amount in their hands and condoned breach of the provisions of sec. 244-A of the old Act. The learned Judge however with regard to the breach committed under sec. 244 of the old Act came to the conclusion that the official liquidator was not the officer of the company and therefore sec. 281 of the old Act under which they claimed relief would not apply. The learned Judge therefore dismissed the application so far as relief for default under sec. 244 of the Old Act was concerned. Against that order rejecting the relief for default under sec. 344 B(7) of the old Act the Liquidators have preferred the present appeal.