GIAN DEVI Vs. BACHAN MOTOR FINANCIERS PVT LTD

JUDGEMENT

(1.) THIS order will dispose of three petitions (Company Petitions Nos. 59, 60 and 61 of 1986) which involve a common question of law.

(2.) THE petitioners have filed these petitions under Section 446 of the Companies Act, 1956 (hereinafter called "the Act"), for the recovery of the amounts of debts together with interest alleged to be due to them from the company which is in liquidation. A preliminary objection has been raised by the official liquidator that no petition under Section 446 ( 1 ) (b) is competent and the only remedy available to the petitioners was to prove their debts before the official liquidator under Section 528 of the Act in accordance with the procedure provided in the Companies (Court) Rules, 1959 (hereinafter called " the Rules " ). Section 528 of the Act provides that in every winding up, all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company. A detailed procedure as to how the debts are to be proved is provided in the rules from Rule 147 onwards. Against the decision of the liquidator, an appeal is competent to the court under Rule 164. After the dismissal of the claims, the official liquidator is required to settle a list of the creditors under Rule 167 which is submitted to the court for approval. The list of the creditors once settled cannot be varied except under the order of the court. It is, therefore, evident that a special procedure has been provided in the Act and the Rules for proof of the debt against the company by the creditors. The general provision under Section 446 of the Act, obviously, would be excluded and available only in cases where the remedy of proof of a debt before the liquidator is not available, such as in the case of a secured creditor.

(3.) A Full Bench decision in Jaimal Singh Makin v. Official Liquidator, Majestic Financiers (P.) Ltd. [1978] 48 Comp Cas 419 (Delhi) [fb]; AIR 1978 Delhi 169, and a single Bench decision of this court in Punjab Finance P. Ltd. v. Malhara Singh (No. 2) [1975] 45 Comp Cas 261; [1975] Tax LR 1670 were relied upon by learned counsel for the petitioners in support of his contention that a petition under Section 446 (2) (b) of the Act would be competent against the company by a creditor. In none of these decisions, this point was specifically debated or dealt with. The question before the court in both these cases was as to whether an application was competent by the official liquidator under the said provision and what would be the court fee payable thereon. If the official liquidator is to file a claim against a third party on behalf of the company, obviously, the only remedy available is under Section 446 of the Act. These decisions, therefore, lend no support to the contention of the petitioners that both the remedies are open to them to enforce their claim and they can choose any one of them. I am, therefore, of the considered view that a petition by an unsecured creditor against the company would not be competent under Section 446 (2) (b) of the Act and his remedy is only to prove his debt before the official liquidator in accordance with the provisions of Section 528 of the Act and the Rules referred to above. These petitions are, consequently, dismissed but without any order as to costs.