Kerala High Court
Prof. O. Narayanan Kutty vs Official Liquidator, High Court Of ... on 16 February, 1998
Equivalent citations: AIR1998KER278, AIR 1998 KERALA 278, (1998) ILR(KER) 2 KER 441, (1998) 1 KER LJ 656, (1998) 1 KER LT 525, (1998) 30 CORLA 146, (1999) 96 COMCAS 418
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan
JUDGMENT Ar. Lakshmanan, J.
1. Heard both sides. The appeal is directed against the order of the learned Company Judge dated 27-6-1997 vacating the stay order passed by this Court in C. A. No. 144/95. In the said C. A. this Court stayed the arrest warrant issued by the Consumer Disputes Redressal Forum, Kozhikodc against the appellant herein in his capacity as the Managing Director of the Sai Chakra Studies (P) Ltd. (in liquidation). The official liquidator filed M.C.A. 53/96 to vacate the above order. Annexure-E was produced before the learned Judge. In Annexure-E the appellant has been described as Prof. P. Narayanankutty M/s. Sai Chakra, Aradhana, Kallai Road, Calicut - 2. The learned Judge was of the view that the proceedings can be stayed only if the legal proceedings wherein individual capacity and not as Managing Director of Sai Chakra Studies (P) Ltd. will not in any way alter the status of the appellant as the Managing Director of the said company in liquidation and that C. P. No. 32/95 was filed by the appellant under Sections 433 and 439 of the Act and this Court on going through the formalities relating to winding up passed an order of winding up of the company. It is on this basis the stay of further proceedings including arrest warrant issued by the Consumer Disputes Redressal Forum against the appellant in his capacity as the Managing Director of Sai Chakra Studies (P) Ltd. was granted. Our attention was invited to Section 446 of the Act. Section 446 of the Act deals with suits stayed on winding up order. When a winding up order has been made or an official liquidator is appointed as provisional official liquidator, no suit or other legal proceedings shall be commenced or if pending on the date of the winding up order, shall be proceeded with against the above, except by a leave of the Court and subject to such terms as the Court impose. The Court which is winding up the company, shall have the jurisdiction to entertain or dispose of any suit or proceeding by or against the company, or any claim made by or against the company, or any application made under Section 391 by or in respect of any company and also decide any question of priorities or any other question whatsoever, which may relate to or arise in the course of winding up of the company whether such a suit or proceeding has been instituted or is instituted or such suit or claim has arisen or arises such application has been made or is made before or after the commencement of the companies. In this case the winding up order has been made by this Court and the official liquidator is appointed as provisional official liquidator and the proceedings have been initiated by third parties, namely, the students before and after the commencement of the company proceedings. Under such circumstances, the company Court, which has ordered winding up of the company, in our view have the jurisdiction to entertain or dispose of the matters which are listed above. It is the case of the appellant that as long as the company is in liquidation and proceedings are pending before this Court, no action can be brought against the company or its Directors, etc. or in any other Court of law and that the mere fact that the third parties choose to address the appellant in his individual capacity will not in any way affect the protection granted under Section 446 of the Act to the appellant in his capacity as Managing Director, since the firm Sai Chakra Studies (P) Ltd. existed prior to the registration of the company under the Act has not conducted any course or any such matter before the formation of any forum including Consumer Disputes Redressal Forum, Calicut. It is also averred that the appellant has not performed any Act in his personal capacity, since he has functioned only as the promoter of the company and its Managing Director alter it was incorporated.
2. We see substance and merit in the contention of the appellant. It is his specific case that the firm Sai Chakra Studies (P) Ltd., which existed prior to the registration of the company, never conducted any course or any such matter before the formation of any forum including Consumer Disputes Redressal Forum, Calicut. It is also stated that he has acted only as the promoter of the company and its Managing Director after it was incorporated and therefore the cases which are filed before and after the winding up order relate only to the company namely. M/s. Sai Chakra Studies (P) Ltd. We therefore permit the appellant herein to make out an application under Section 446 of the Act and prosecute the same by placing all the materials before the Company Judge. Till the company petition is disposed of, there will be a stay of arrest of the appellant, Prof. P. Narayanankutty in his capacity as the Managing Director of M/s. Sai Chakra Studies (P) Ltd.
Mr. K. Moni appearing for the official liquidator is also at liberty to file an application for dissolution of the company if he so desires. Both the applications shall be disposed of by the Company Court on merits. The appeal is partly allowed. No costs.