Court-appointed liquidator not personally liable on company contract absent clear words or express personal undertaking.
A court-appointed liquidator is treated as the company's agent, so personal liability on a company contract cannot be inferred merely because he has not disclaimed it. The liquidator's letter and conduct showed no express undertaking to contract personally, and the description of him as liquidator pointed against personal liability. Section 267 of the Companies Act, 1929, was held to confer only a power to disclaim onerous contracts and not to create personal liability by implication. The contrast with the Bankruptcy Act confirmed that clear words would be needed to alter the liquidator's liability. The claim therefore failed.
Issues: Whether a court-appointed liquidator was personally liable on a company contract which he had not disclaimed, and whether the statutory power of disclaimer under section 267 of the Companies Act, 1929, created such personal liability.
Analysis: The liquidator's letter and subsequent conduct did not show an intention to assume personal liability. The contract and the correspondence were throughout treated as dealings with the company through its liquidator. A liquidator appointed by the Court acts as agent of the company, unlike a receiver and manager, who acts for debenture holders and not as the company's agent. The description "liquidator" therefore negatives, rather than supports, an inference of personal contracting. Section 267 of the Companies Act, 1929, merely confers a power to disclaim onerous contracts and contains no clear words imposing personal liability on the liquidator. The contrast with section 54 of the Bankruptcy Act, 1914, reinforced the conclusion that the statutory disclaimer power was not intended to alter the liquidator's personal liabilities.
Conclusion: The liquidator was not personally liable on the contract, and the claim failed.
Final Conclusion: Personal liability could not be inferred against a court-appointed liquidator merely because he had not disclaimed the company's contract, and the statutory disclaimer provision did not convert his representative capacity into personal liability.
Ratio Decidendi: A court-appointed liquidator is the agent of the company, and absent clear statutory words or an express personal undertaking, the mere existence of a power to disclaim an onerous contract does not make the liquidator personally liable on that contract.
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AI Drafter ✕
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