Allahabad High Court
British India Corporation Ltd vs Official Liquidator And Another on 11 February, 2025
Author: Piyush Agrawal
Bench: Piyush Agrawal
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Neutral Citation No. - 2025:AHC:19952 Court No. - 2 Case :- COMPANY APPEAL No. - 2 of 2024 Appellant :- British India Corporation Ltd Respondent :- Official Liquidator And Another Counsel for Appellant :- Sanjay Kumar Om Counsel for Respondent :- Himanshu Pandey Hon'ble Piyush Agrawal,J.
1. Heard Mr. Shashi Prakash Singh, learned ASGI assisted by Mr. Sanjay Kumar Om for the appellant and Mr. Prashant Kumar Tripathi for the Official Liquidator.
2. The present company appeal has been filed against the order dated 28.6.2024 whereby the claim of the appellant has been rejected.
3. Before proceeding further, certain facts will be relevant for deciding the present controversy. Elgin Mills Company Limited (EMCL) is subsidiary company of British India Corporation Limited, under Section 617 of Companies Act, 1956 and when the company was being sick, the matter was referred to the BIFR under Section 15 of SICA. Thereafter, the AAIFR confirmed the order of BIFR and referred the matter to this Court for its winding up and this Court vide order dated 29.9.1999 directed the winding up of the company. In the meantime, Kotak Mahindra Bank filed Company Petition no. 2 of 1995 for winding up the Cawnpore Textiles Ltd.Elgin Mills Company Limited in which this Court vide order dated on 29.9.1999 has directed for winding up of EMCL.
4. Thereafter recall application for recalling the winding up order dated 29.9.1999 was filed on 6.7.2001 and vide order dated 30.8.2001 passed by Company Court and in compliance thereof, the Official Liquidator not to take possession of the company and accorded the opportunity to rehabilitate and revive the company and also to repay the schedule to its debtors and in pursuance thereof, the appellant negotiated with the secured creditors including Kotak Mahindra Bank and made their payments out of the bridge loan taken from the National Textile Corporation. However the record shows that no proposal for rehabilitation / revival of the company in liquidation was filed and the company in liquidation could not be revived. The record further shows that appellant filed a claim of Rs. 25,95,77,836/-, which has been rejected by the impugned order. Hence the present appeal.
5. Learned Senior counsel for the appellant has submitted that his claim has solely been rejected on the ground that beyond the date of winding up, the payment has been made which cannot be considered. He further submitted that under the Companies Act and Rules, there is no prohibition for not taking into consideration of the amount of post winding up. He further submitted that admittedly winding up order was passed on 25.10.2010 and payment as claimed is beyond the said period but payments made are not in dispute as clearly mentioned in the chart. He further submitted that once it is admitted that certain amount has been disbursed by the appellant, it was duty of the Official Liquidator to accept the claim made by the appellant instead of rejecting the same.
6. In support of his submission, learned Senior Counsel appearing on behalf of appellant has relied upon the decision of Calcutta High Court in Ujjain Nagar Palika Nigam Vs. Official Liquidator and others, 2009(149) Comp Case 433, IISCO Ujjain Pipe and Foundry Co. Ltd. Official Liquidator Vs. Ujjain Nagar Palika Nigam and others, 2009 Supreme (Cal) 69 which has been affirmed by the Apex Court in Official Liquidator Vs. Ujjain Nagar Palika Nigam and others (Civil Appeal No. 8015 of 2010) decided on 4.5.2023.
7. Per contra, Mr. Prashant Kumar Tripathi, learned counsel for the official liquidator has supported the impugned order and submitted that Rule 154 of the Company(Court) Rules, 1959 does not empowers for accepting the claim of post winding up. He further submitted that the appellant has voluntarily paid the dues to the secured creditors without any authority of law. In turn, he submitted that payment have been made without leave of the Company Court and the appellant have failed to bring on record any such order. He further submitted that in the present case, the appellant has not purchased any property sold by the Official Liquidator on which some tax or fee was required to be paid. He submitted that there was neither any conditions nor any terms which was not clearly disclosed by the Official Liquidator for which the payments made by the appellant on its own, due to which the they suffered. He further submitted that it is not a case of the appellant that some statutory provisions were there under which the company in liquidation was required to pay but paid by the appellant on some direction of this Court, therefore, the judgements as relied upon by the counsel for the appellant is of no aid to the appellant as in that case under the statutory law, the tax which was payable by the company in liquidation, was claimed by Nagar Nigam, after the date of purchase, therefore, in view of the facts of that case, the Court has made observation in favour of the buyer. He further submitted that in the present case, the appellant has not brought on record any such condition or agreement or order. He further submitted that any observation made in the aforesaid judgements has to be looked into with reference to the context in which it has been made. He further submits that in the identical set of facts Company Appeal No. 1 of 2024 (British India Corporation Ltd. vs. Official Liquidator and another) has already been dismissed. Therefore, he has prayed for dismissal of the present appeal.
8. After hearing learned counsel for the parties, the Court has perused the records.
9. It is admitted between the parties that there is no order of the Court for post winding up payment to be settled by the appellant with the creditors. The appellant could not show any such order. Further the record reveals that the appellant in its own sweet will has come forward and cleared the dues of the creditors. Once there is no such order of the Court for post winding up payment, the payment made by the appellant could not be considered in terms of Section 530 of the Companies Act, 1956 read with Rule 154 of the Company (Court) Rules, 1959.
10. It is not the case of the appellant that after due advertisement of the terms and conditions of auction or any other mode payment to be made. The appellant has made certain payments to which clear picture was not given. Once it is not such a case of sale or any payment made without permission granted by the Court, the claim of post winding up has rightly been rejected by the impugned order.
11. The case law relied upon by the learned senior counsel for the appellant of the Calcutta High Court, which was affirmed by the Apex Court, is based upon different facts all together. The parties therein purchased some property, which has been put to auction on the conditions mentioned therein and the Court after considering the conditions mentioned in the auction notice held that the clear picture was not given to the prospective buyers that the post winding up also taxes will be born by the prospective buyer. On the said pretext, the Apex Court as well as Calcutta High Court passed the order, holding any amount paid post winding up will also be taken into account by the Official Liquidator, whereas in the present case, the appellant has miserably failed to bring on record any such condition or agreement or order of the Court which compel the appellant to clear the dues of the company in liquidation. Once the appellant has failed to bring on record any such conditions or agreement or order, the post winding up amount paid by the appellant on its own could not be claimed to be cover under Section 530 of the Act 1956 read with Rule 1959 of the Company (Court) Rules.
12. The record further shows that the appellant has failed to prove its claim, as only ledger account, without any supporting material was filed before the Official Liquidator so same could not be scrutinized by the claim committee and therefore, no interference in the impugned order is warranted by this Court.
13. Accordingly, the company appeal is dismissed.
Order Date :- 11.2.2025 samz