Personal liability of liquidator: agency for the company means no personal liability absent a clear personal undertaking.
Whether a court appointed liquidator is personally liable for contracts he performs or varies is addressed by treating the liquidator as agent of the company; the analysis finds no personal undertaking or credit to the liquidator personally, and distinguishes liquidators from receivers and managers who act for debenture holders. Statutory construction of section 267 of the Companies Act, 1929 is held to confer a right of disclaimer affecting the company rather than creating personal liability for the liquidator. Operative effect: a liquidator is not personally liable on company contracts absent clear personal undertaking.
Issues: Whether the liquidator of a company appointed by the Court is personally liable for the company's contract which he performed or varied (including whether a letter of June 20, 1930 constituted a personal undertaking), and whether section 267 of the Companies Act, 1929 renders the liquidator personally liable for contracts not disclaimed.
Analysis: The Court examined the correspondence and conduct of the parties, finding no evidence that the liquidator intended to assume personal liability or that the plaintiffs gave him credit personally; all dealings and documents were with the company or with the liquidator as such. The Court distinguished the position of a liquidator from that of a receiver and manager, noting that a liquidator acts for and in the interests of the company whereas a receiver and manager acts for debenture holders; consequently the label "liquidator" indicates agency for the company and does not itself create personal liability. The Court further analysed section 267 of the Companies Act, 1929, observing that unlike section 54 of the Bankruptcy Act, 1914 (which refers to personal liability of a trustee), section 267 grants a right of disclaimer without any express words creating personal liability of the liquidator, and subsection (2) of section 267 indicates the disclaimer affects the company and not the personal rights or liabilities of others.
Conclusion: The liquidator is not personally liable; the action against him personally is dismissed.
TaxTMI 
• Category-wise results to explore all relevant documents on TaxTMI
Help Us Improve - by giving the rating with each AI Result:
TaxTMI 
TaxTMI 
